Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2020shares | |
Cover [Abstract] | |
Entity Registrant Name | TRIPLE-S MANAGEMENT CORP |
Entity Central Index Key | 0001171662 |
Current Fiscal Year End Date | --12-31 |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Shell Company | false |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Common Stock, Shares Outstanding | 23,430,222 |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Sep. 30, 2020 |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | Q3 |
Document Quarterly Report | true |
Document Transition Report | false |
Entity File Number | 001-33865 |
Entity Tax Identification Number | 66-0555678 |
Entity Incorporation, State or Country Code | PR |
Entity Address, Address Line One | 1441 F.D. Roosevelt Avenue |
Entity Address, City or Town | San Juan |
Entity Address, Country | PR |
Entity Address, Postal Zip Code | 00920 |
City Area Code | 787 |
Local Phone Number | 749-4949 |
Title of 12(b) Security | Common Stock Class B, $1.00 par value |
Trading Symbol | GTS |
Security Exchange Name | NYSE |
Condensed Consolidated Interim
Condensed Consolidated Interim Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Investments and cash: | ||
Fixed maturities available for sale, at fair value | $ 1,362,000 | $ 1,242,883 |
Fixed maturities held to maturity, at amortized cost | 1,867 | 1,860 |
Equity investments, at fair value | 389,078 | 287,525 |
Other invested assets, at net asset value | 110,765 | 100,508 |
Policy loans | 10,621 | 10,861 |
Cash and cash equivalents | 129,603 | 109,837 |
Total investments and cash | 2,003,934 | 1,753,474 |
Premiums and other receivables, net | 546,959 | 567,692 |
Deferred policy acquisition costs and value of business acquired | 243,663 | 234,885 |
Property and equipment, net | 130,220 | 88,588 |
Deferred tax asset | 68,637 | 77,294 |
Goodwill | 28,614 | 28,599 |
Other assets | 98,260 | 68,294 |
Total assets | 3,120,287 | 2,818,826 |
Liabilities and Stockholders' Equity | ||
Claim liabilities | 786,920 | 709,258 |
Liability for future policy benefits | 408,116 | 386,017 |
Unearned premiums | 95,608 | 93,301 |
Policyholder deposits | 202,663 | 189,120 |
Liability to Federal Employees' Health Benefits and Federal Employees' Programs | 57,874 | 47,781 |
Accounts payable and accrued liabilities | 387,465 | 325,761 |
Deferred tax liability | 12,254 | 10,257 |
Short-term borrowings | 82,500 | 54,000 |
Long-term borrowings | 53,836 | 25,694 |
Liability for pension benefits | 23,364 | 34,465 |
Total liabilities | 2,110,600 | 1,875,654 |
Triple-S Management Corporation stockholders' equity | ||
Common stock Class B, $1 par value. Authorized 100,000,000 shares; issued and outstanding 23,430,222 and 23,799,633 shares at September 30, 2020 and December 31, 2019, respectively | 23,430 | 23,800 |
Additional paid-in capital | 53,964 | 60,504 |
Retained earnings | 871,067 | 830,198 |
Accumulated other comprehensive income | 61,939 | 29,363 |
Total Triple-S Management Corporation stockholders' equity | 1,010,400 | 943,865 |
Non-controlling interest in consolidated subsidiary | (713) | (693) |
Total stockholders' equity | 1,009,687 | 943,172 |
Total liabilities and stockholders' equity | $ 3,120,287 | $ 2,818,826 |
Condensed Consolidated Interi_2
Condensed Consolidated Interim Balance Sheets (Unaudited) (Parenthetical) - Class B Common Stock [Member] - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
Triple-S Management Corporation stockholders' equity | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, issued (in shares) | 23,430,222 | 23,799,633 |
Common stock, outstanding (in shares) | 23,430,222 | 23,799,633 |
Condensed Consolidated Interi_3
Condensed Consolidated Interim Statements of Earnings (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenues: | ||||
Premiums, net | $ 922,934 | $ 815,021 | $ 2,657,366 | $ 2,442,516 |
Administrative service fees | 3,752 | 2,607 | 8,755 | 7,695 |
Net investment income | 14,168 | 15,176 | 42,294 | 45,614 |
Other operating revenues | 2,052 | 3,167 | 6,394 | 6,335 |
Total operating revenues | 942,906 | 835,971 | 2,714,809 | 2,502,160 |
Net realized investment gains (losses) | 507 | 1,087 | (180) | 4,766 |
Net unrealized investment gains (losses) on equity investments | 11,040 | 1,267 | (17,428) | 24,259 |
Other income, net | 1,811 | 485 | 6,217 | 3,359 |
Total revenues | 956,264 | 838,810 | 2,703,418 | 2,534,544 |
Benefits and expenses: | ||||
Claims incurred | 761,792 | 680,010 | 2,129,401 | 2,009,504 |
Operating expenses | 158,809 | 136,882 | 499,669 | 403,629 |
Total operating costs | 920,601 | 816,892 | 2,629,070 | 2,413,133 |
Interest expense | 2,096 | 2,062 | 5,813 | 5,681 |
Total benefits and expenses | 922,697 | 818,954 | 2,634,883 | 2,418,814 |
Income before taxes | 33,567 | 19,856 | 68,535 | 115,730 |
Income tax expense | 9,989 | 5,910 | 27,520 | 36,075 |
Net income | 23,578 | 13,946 | 41,015 | 79,655 |
Net loss attributable to non-controlling interest | (3) | (2) | (20) | (10) |
Net income attributable to Triple-S Management Corporation | $ 23,581 | $ 13,948 | $ 41,035 | $ 79,665 |
Earnings per share attributable to Triple-S Management Corporation | ||||
Basic net income per share (in dollars per share) | $ 1.02 | $ 0.59 | $ 1.77 | $ 3.44 |
Diluted net income per share (in dollars per share) | $ 1.02 | $ 0.58 | $ 1.76 | $ 3.43 |
Condensed Consolidated Interi_4
Condensed Consolidated Interim Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Condensed Consolidated Interim Statements of Comprehensive Income (Loss) (Unaudited) [Abstract] | ||||
Net income | $ 23,578 | $ 13,946 | $ 41,015 | $ 79,655 |
Other comprehensive income, net of tax: | ||||
Net unrealized change in fair value of available for sale securities, net of taxes | 4,743 | 9,290 | 32,023 | 37,660 |
Defined benefit pension plan: | ||||
Actuarial loss, net | 247 | 61 | 553 | 173 |
Total other comprehensive income, net of tax | 4,990 | 9,351 | 32,576 | 37,833 |
Comprehensive income | 28,568 | 23,297 | 73,591 | 117,488 |
Comprehensive loss attributable to non-controlling interest | (3) | (2) | (20) | (10) |
Comprehensive income attributable to Triple-S Management Corporation | $ 28,571 | $ 23,299 | $ 73,611 | $ 117,498 |
Condensed Consolidated Interi_5
Condensed Consolidated Interim 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 [Member] | Triple-S Management Corporation [Member] | Noncontrolling Interest in Consolidated Subsidiary [Member] | Total | Cumulative Effect, Period of Adoption, Adjustment [Member]Common Stock [Member]Class A Common Stock [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]Common Stock [Member]Class B Common Stock [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]Additional Paid-in Capital [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]Retained Earnings [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]Accumulated Other Comprehensive Income [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]Triple-S Management Corporation [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]Noncontrolling Interest in Consolidated Subsidiary [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] |
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 | ||||||||
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 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Share-based compensation | 0 | 1 | 2,816 | 0 | 0 | 2,817 | 0 | 2,817 | ||||||||
Issuance of Common Stock | 48 | 0 | 1,151 | 0 | 0 | 1,199 | 0 | 1,199 | ||||||||
Stock dividend | 0 | 1,133 | 23,522 | |||||||||||||
Stock dividend | (24,655) | 0 | 0 | 0 | 0 | |||||||||||
Dividend | 0 | 0 | 0 | (11) | 0 | (11) | 0 | (11) | ||||||||
Common Stock Class A conversion to Class B | (999) | |||||||||||||||
Common Stock Class A conversion to Class B | 999 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||
Comprehensive income (loss) | 0 | 0 | 0 | 13,948 | 9,351 | 23,299 | (2) | 23,297 | ||||||||
Balance at Sep. 30, 2019 | 0 | 24,333 | 67,180 | 816,969 | 40,895 | 949,377 | (686) | 948,691 | ||||||||
Balance at Dec. 31, 2019 | 0 | 23,800 | 60,504 | 830,198 | 29,363 | 943,865 | (693) | 943,172 | ||||||||
Balance (ASU 2016-13 [Member]) at Dec. 31, 2019 | $ 0 | $ 0 | $ 0 | $ (166) | $ 0 | $ (166) | $ 0 | $ (166) | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Share-based compensation | 0 | 590 | 1,769 | 0 | 0 | 2,359 | 0 | 2,359 | ||||||||
Repurchase and retirement of common stock | 0 | (584) | (8,511) | 0 | 0 | (9,095) | 0 | (9,095) | ||||||||
Comprehensive income (loss) | 0 | 0 | 0 | (26,145) | 16,032 | (10,113) | (7) | (10,120) | ||||||||
Balance at Mar. 31, 2020 | 0 | 23,806 | 53,762 | 803,887 | 45,395 | 926,850 | (700) | 926,150 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Share-based compensation | 0 | 7 | 4,228 | 0 | 0 | 4,235 | 0 | 4,235 | ||||||||
Repurchase and retirement of common stock | 0 | (375) | (5,618) | 0 | 0 | (5,993) | 0 | (5,993) | ||||||||
Comprehensive income (loss) | 0 | 0 | 0 | 43,599 | 11,554 | 55,153 | (10) | 55,143 | ||||||||
Balance at Jun. 30, 2020 | 0 | 23,438 | 52,372 | 847,486 | 56,949 | 980,245 | (710) | 979,535 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Share-based compensation | 0 | 7 | 1,842 | 0 | 0 | 1,849 | 0 | 1,849 | ||||||||
Repurchase and retirement of common stock | 0 | (15) | (250) | 0 | 0 | (265) | 0 | (265) | ||||||||
Comprehensive income (loss) | 0 | 0 | 0 | 23,581 | 4,990 | 28,571 | (3) | 28,568 | ||||||||
Balance at Sep. 30, 2020 | $ 0 | $ 23,430 | $ 53,964 | $ 871,067 | $ 61,939 | $ 1,010,400 | $ (713) | $ 1,009,687 |
Condensed Consolidated Interi_6
Condensed Consolidated Interim Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities: | ||
Net income | $ 41,015 | $ 79,655 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 10,855 | 10,729 |
Net amortization of investments | 2,151 | 1,484 |
Provision for doubtful receivables | 2,229 | 2,476 |
Deferred tax expense | 2,277 | 14,570 |
Net realized investment losses (gains) on sale of securities | 180 | (4,766) |
Net unrealized losses (gains) on equity investments | 17,428 | (24,259) |
Interest credited to policyholder deposits | 4,788 | 4,414 |
Share-based compensation | 8,443 | 8,723 |
Gain on sale of property and equipment | 154 | 0 |
Decrease (increase) in assets: | ||
Premium and other receivables, net | 26,038 | 17,663 |
Deferred policy acquisition costs and value of business acquired | (10,827) | (20,004) |
Deferred taxes | (109) | 114 |
Other assets | (29,831) | (12,428) |
Increase (decrease) in liabilities: | ||
Claim liabilities | 77,662 | (134,798) |
Liability for future policy benefits | 22,099 | 19,769 |
Unearned premiums | 2,307 | 5,291 |
Liability to Federal Employees' Health Benefits and Federal Employees' Programs | 10,093 | 21 |
Accounts payable and accrued liabilities | 36,729 | 27,891 |
Net cash provided by (used in) operating activities | 223,681 | (3,455) |
Securities available for sale: | ||
Fixed maturities sold | 94,557 | 365,383 |
Fixed maturities matured/called | 37,450 | 19,017 |
Securities held to maturity: | ||
Fixed maturities matured/called | 1,079 | 1,378 |
Equity investments sold | 80,152 | 126,134 |
Other invested assets sold | 13,231 | 3,379 |
Securities available for sale: | ||
Fixed maturities | (206,387) | (397,956) |
Securities held to maturity: | ||
Fixed maturities | (1,087) | (748) |
Equity investments | (201,324) | (88,945) |
Other invested assets | (25,442) | (24,233) |
Increase in other investments | (3,924) | (2,710) |
Net change in policy loans | 240 | (1,097) |
Net capital expenditures | (52,549) | (14,746) |
Capital contribution on equity method investees | (7,083) | 0 |
Net cash used in investing activities | (271,087) | (15,144) |
Cash flows from financing activities: | ||
Change in outstanding checks in excess of bank balances | 16,814 | 3,808 |
Net change in short-term borrowings | 28,500 | 0 |
Proceeds from long-term borrowings | 30,841 | 0 |
Repayments of long-term borrowings | (2,760) | (2,425) |
Repurchase and retirement of common stock | (14,980) | (1) |
Proceeds from policyholder deposits | 21,586 | 15,060 |
Surrenders of policyholder deposits | (12,829) | (16,455) |
Net cash provided by (used in) financing activities | 67,172 | (13) |
Net increase (decrease) in cash and cash equivalents | 19,766 | (18,612) |
Cash and cash equivalents: | ||
Beginning of period | 109,837 | 117,544 |
End of period | $ 129,603 | $ 98,932 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2020 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | (1) Basis of Presentation The accompanying condensed consolidated interim financial statements prepared by Triple-S Management Corporation and its subsidiaries are unaudited. In this filing, the “Corporation”, the “Company”, “TSM”, “we”, “us” and “our” refer to Triple-S Management Corporation and its subsidiaries. The condensed consolidated interim financial statements do not include all of the information and the footnotes required by accounting principles generally accepted in the 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). Accordingly, these condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. 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, 2020 are not necessarily indicative of the results for the full year ending December 31, 2020. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Significant Accounting Policies [Abstract] | |
Significant Accounting Policies | (2) Significant Accounting Policies Investments Fixed maturities Investment in debt securities at September 30, 2020 and December 31, 2019 consists mainly of obligations of government-sponsored enterprises, U.S. Treasury securities and obligations of U.S. government instrumentalities, municipal securities, corporate bonds, residential mortgage-backed securities, and collateralized mortgage obligations. The Company classifies its debt securities in one of two categories: available-for-sale or held-to-maturity. Securities classified as held-to-maturity are those securities in which the Company has the ability and intent to hold until maturity. All other securities not included in held-to-maturity are classified as available-for-sale. Available-for-sale securities are recorded at fair value. The fair values of debt securities (both available-for-sale and held-to-maturity investments) are based on quoted market prices for those or similar investments at the reporting date. Held-to-maturity debt securities are recorded at amortized cost, adjusted for the amortization or accretion of premiums and discounts, respectively. Unrealized holding gains and losses, net of the related tax effect, on available-for-sale securities are excluded from earnings and are reported as a separate component of other comprehensive income until realized. Realized gains and losses from the sale of available-for-sale securities are included in earnings and are determined on a specific identification basis. Transfers of securities between categories are recorded at fair value at the date of transfer. Unrealized holding gains or losses associated with transfers of securities from held-to-maturity to available-for-sale are recorded as a separate component of other comprehensive income. The unrealized holding gains or losses included in the separate component of other comprehensive income for securities transferred from available-for-sale to held-to-maturity, are maintained and amortized into earnings over the remaining life of the security as an adjustment to yield in a manner consistent with the amortization or accretion of premium or discount on the associated security. If a fixed maturity security is in an unrealized loss position and the Company does not have the intent to sell the fixed maturity security, or it is more likely than not that the Company will not have to sell the fixed maturity security before recovery of its amortized cost basis, the credit component of the impairment, if any, is recorded as an allowance for credit losses with an offsetting entry in the Company’s consolidated statements of earnings. The non-credit component of the impairment is recognized in other comprehensive income. Furthermore, unrealized losses entirely caused by non-credit related factors related to fixed maturity securities for which the Company expects to fully recover the amortized cost basis continue to be recognized in accumulated other comprehensive income. If a fixed maturity security is in an unrealized loss position and the Company has the intent to sell the fixed maturity security, or it is more likely than not that the Company will have to sell the fixed maturity security before recovery of its amortized cost basis, the Company will write off any previously recognized allowance for credit losses and will decrease the amortized cost basis of the security. If the allowance has been fully written off and the fair value is less than its amortized cost basis, the amortized cost basis is written down and an impairment loss is recognized in the Company’s consolidated statements of earnings. As of September 30, 2020, no allowance for credit losses was recorded in the condensed consolidated interim financial statements. The credit component of the impairment is determined by comparing the net present value of projected future cash flows with the amortized cost basis of the fixed maturity security. The net present value is calculated by discounting the Company’s best estimate of projected future cash flows at the effective interest rate implicit in the fixed maturity security at the date of acquisition. If there is an increase in the projected future cash flows of the fixed maturity security in subsequent periods, all or part of the allowance for credit losses may be reversed. In addition, the Company considers the following factors when evaluating whether a credit loss exist: the reasons for the impairment, the severity of the impairment, market conditions, changes in the security’s rating, changes in value subsequent to year-end, forecasted performance of the investee, and the general market condition in the geographic area or industry the investee operates in. Premiums and discounts are amortized or accreted over the life of the related held-to-maturity or available-for-sale security as an adjustment to yield using the effective interest method. Dividend and interest income are recognized when earned. The Company regularly invests in mortgaged-backed securities and other securities subject to prepayment and call risk. Significant changes in prevailing interest rates may adversely affect the timing and amount of cash flows on such securities. In addition, the amortization of market premium and accretion of market discount for mortgaged-backed securities is based on historical experience and estimates of future payment speeds on the underlying mortgage loans. Actual prepayment speeds may differ from original estimates and may result in material adjustments to amortization or accretion recorded in future periods. Equity investments Investment in equity securities at September 30, 2020 and December 31, 2019 consists of mutual funds whose underlying assets are comprised of domestic equity securities, international equity securities and higher risk fixed income instruments. Equity investments are recorded at fair value. The fair values of equity investments are mainly based on quoted market prices for those or similar investments at the reporting date. For a specific equity investment, the fair value is estimated using the net asset value (NAV) of the Company’s ownership interest in the partnership. Unrealized holding gains and losses on equity investments are included in earnings. Realized gains and losses from the sale of equity investments are included in earnings and are determined on a specific identification basis. Other invested assets Other invested assets at September 30, 2020 and December 31, 2019 consist mainly of alternative investments in partnerships that invest in several private debt and private equity funds. Portfolios are diversified by vintage year, stage, geography, business sectors and number of investments. These investments are not redeemable with the funds. Distributions from each fund are received as the underlying investments of the funds are liquidated. It is estimated that the underlying assets of the funds will be liquidated in the next 5 to 12 years. The fair value of the investments in this class have been estimated using the net asset value (NAV) of the Company’s ownership interest in the partnerships. Total unfunded capital commitments for these positions as of September 30, 2020 amounted to $57,762. The remaining average commitments period is approximately three years. Health Insurance Providers Fee The Patient Protection and Affordable Care Act (ACA) as amended by the Health Care and Education Reconciliation Act mandates an annual Health Insurance Providers Fee (HIP Fee). The annual HIP Fee becomes payable to the U.S. Treasury once the entity provides health insurance for any U.S. health risk each applicable calendar year. The initial estimated annual fee is accrued as of January 1, with a corresponding deferred cost that is amortized over 12 months on a straight-line basis. The fee payment is due on September 30 of each year. The deferred cost is included within the other asset line item and the accrued fee is included within the accounts payable and accrued liabilities line item in the accompanying condensed consolidated balance sheets. The fee is presented within operating expenses in the accompanying condensed consolidated statements of earnings. The HIP Fee was waived for all health insurance providers during the year ended December 31, 2019. The Taxpayer Certainty and Disaster Tax Relief Act of 2019 and the Further Consolidated Appropriations Act of 2020, signed into law on December 20, 2019, repealed the HIP Fee effective calendar years beginning after December 31, 2020. As of September 30, 2020, the HIP Fee deferred cost amounted to $12,139. During the quarter ended September 30, 2020, the Company made the corresponding payment amounting to $55,514. As of December 31, 2019, no balance was deferred or accrued for the HIP Fee. Recently Adopted Accounting Standards On June 16, 2016, the Financial Accounting Standards Board (FASB) issued guidance to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date by replacing the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. In addition, 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 amendments 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. The Company adopted the standard effective January 1, 2020 and recognized $166, net of deferred tax asset, as a cumulative effect adjustment to the opening balance of retained earnings on the adoption date. On January 26, 2017, the FASB issued guidance to simplify the manner in which an entity is required to evaluate goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. Instead, under the amendments in this guidance, an entity should (1) perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount, and (2) recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, with the understanding that the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, this guidance removes the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails such qualitative test, to perform Step 2 of the goodwill impairment test. For public companies, these amendments, which should be applied on a prospective basis, are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company adopted the standard effective January 1, 2020. Upon adoption of this standard, if the carrying amount of any of the reporting units exceeds its fair value, the Company will be required to record an impairment charge for the difference up to the amount of the goodwill. On August 27, 2018, the FASB issued guidance for Fair Value Measurement – Disclosure Framework – Changes to the Disclosure Requirement for Fair Value Measurement. This update focuses on improving the effectiveness of disclosures in the notes to the financial statements by facilitating clear communication of the information required by U.S. GAAP that is most important to users of each entity’s financial statements. Specifically, certain disclosure requirements are removed (the amount of, and reasons for, transfer between Level 1 and Level 2 of the fair value hierarchy; the policy for timing of transfers between levels; the valuation processes for Level 3 fair value measurements) while certain other disclosures are modified and added (changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period, and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements). The amendments regarding changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent period in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. For public companies, these amendments will be applied for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company adopted the standard effective January 1, 2020. The adoption of this guidance did not have a material impact on the presentation and disclosures of the Company’s condensed consolidated interim financial statements. On August 29, 2018, the FASB issued guidance for Intangibles – Goodwill and Other – Internal-Use Software. Guidance addresses customers’ accounting for implemented costs incurred in a cloud computing arrangement that is a service contract and aims to reduce complexity in the accounting for costs of implementing a cloud computing service arrangement. The amendments require a customer in a hosting arrangement that is a service contract to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. Additionally, it requires the customer to expense the capitalized implementation costs over the term of the hosting arrangement. For public companies, these amendments will be applied on a prospective basis, for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company adopted the standard effective January 1, 2020. The adoption of this guidance did not have a material impact on the results of the Company’s condensed consolidated interim financial statements. Future Adoption of Accounting Standards On March 12, 2020, the FASB issued ASU 2020-04: Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The ASU was issued to provide optional guidance, for a limited time, to ease the potential burden in accounting for or recognizing the effects of reference rate reform on financial reporting. The amendments, which are elective and apply to all entities, provide expedients and exceptions for applying U.S. GAAP to contract modifications and hedging relationships affected by reference rate reform if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference LIBOR or another reference rate that is expected to be discontinued due to reference rate reform. Because the guidance is intended to assist stakeholders during the global market-wide reference rate transition period, it is in effect for a limited time, from March 12, 2020 through December 31, 2022. The Company is currently in the process of identifying its LIBOR-based contracts that will be impacted by the phase-out of LIBOR and expects to utilize the optional expedients provided in this ASU. 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, 2020 that could have a material impact on the Company’s financial position, operating results or financials statement disclosures. |
Investment in Securities
Investment in Securities | 9 Months Ended |
Sep. 30, 2020 | |
Investment in Securities [Abstract] | |
Investment in Securities | (3) Investment in Securities The amortized cost for debt securities and cost for alternative investments, 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 September 30, 2020 and December 31, 2019, were as follows: September 30, 2020 Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value Fixed maturities available for sale Obligations of government- sponsored enterprises $ 36,762 $ 784 $ (29 ) $ 37,517 U.S. Treasury securities and obligations of U.S. government instrumentalities 103,483 8,747 - 112,230 Municipal securities 628,689 56,009 (126 ) 684,572 Corporate bonds 195,293 31,863 - 227,156 Residential mortgage-backed securities 263,715 17,230 (376 ) 280,569 Collateralized mortgage obligations 19,275 726 (45 ) 19,956 Total fixed maturities available for sale $ 1,247,217 $ 115,359 $ (576 ) $ 1,362,000 December 31, 2019 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Fixed maturities available for sale Obligations of government- sponsored enterprises $ 17,209 $ 477 $ - $ 17,686 U.S. Treasury securities and obligations of U.S. government instrumentalities 102,230 4,779 - 107,009 Municipal securities 595,051 34,735 (22 ) 629,764 Corporate bonds 187,096 21,721 (74 ) 208,743 Residential mortgage-backed securities 262,783 8,073 (320 ) 270,536 Collateralized mortgage obligations 8,674 471 - 9,145 Total fixed maturities available for sale $ 1,173,043 $ 70,256 $ (416 ) $ 1,242,883 September 30, 2020 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 $ 614 $ 217 $ - $ 831 Residential mortgage-backed securities 165 6 - 171 Certificates of deposit 1,088 - - 1,088 Total $ 1,867 $ 223 $ - $ 2,090 December 31, 2019 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 $ 615 $ 158 $ - $ 773 Residential mortgage-backed securities 165 1 - 166 Certificates of deposit 1,080 - - 1,080 Total $ 1,860 $ 159 $ - $ 2,019 September 30, 2020 Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value Other invested assets - Alternative investments $ 110,532 $ 3,795 $ (3,562 ) $ 110,765 December 31, 2019 Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value Other invested assets - Alternative investments $ 97,575 $ 3,721 $ (788 ) $ 100,508 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 September 30, 2020 and December 31, 2019 were as follows: September 30, 2020 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 $ 9,511 $ (29 ) 1 $ - $ - - $ 9,511 $ (29 ) 1 Municipal securities 21,832 (126 ) 4 - - - 21,832 (126 ) 4 Residential mortgage-backed securities 22,551 (376 ) 8 - - - 22,551 (376 ) 8 Collateralized mortgage obligations 8,847 (45 ) 2 - - - 8,847 (45 ) 2 Total fixed maturities $ 62,741 $ (576 ) 15 $ - $ - - $ 62,741 $ (576 ) 15 Other invested assets - Alternative investments $ 12,873 $ (1,933 ) 4 $ 16,308 $ (1,629 ) 6 $ 29,181 $ (3,562 ) 10 December 31, 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 Municipal securities $ 10,656 $ (22 ) 3 $ - $ - - $ 10,656 $ (22 ) 3 Corporate bonds 5,047 (74 ) 1 - - - 5,047 (74 ) 1 Residential mortgage-backed securities 79,902 (320 ) 16 - - - 79,902 (320 ) 16 Total fixed maturities $ 95,605 $ (416 ) 20 $ - $ - - $ 95,605 $ (416 ) 20 Other invested assets - Alternative investments $ 24,437 $ (605 ) 8 $ 10,580 $ (183 ) 1 $ 35,017 $ (788 ) 9 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 impairments and allowances may be recorded in future periods. The Corporation from time to time may sell investments as part of its asset/liability management process or to reposition its investment portfolio based on current and expected market conditions. Obligations of Government-Sponsored Enterprises and Municipal Securities: Residential mortgage-backed securities and Collateral mortgage obligations Alternative investments: Maturities of investment securities classified as available for sale and held to maturity were as follows: September 30, 2020 Amortized cost Estimated fair value Fixed maturities available for sale Due in one year or less $ 33,764 $ 34,244 Due after one year through five years 564,825 610,357 Due after five years through ten years 204,234 220,251 Due after ten years 161,404 196,623 Residential mortgage-backed securities 263,715 280,569 Collateralized mortgage obligations 19,275 19,956 $ 1,247,217 $ 1,362,000 Fixed maturities held to maturity Due in one year or less $ 1,088 $ 1,088 Due after ten years 614 831 Residential mortgage-backed securities 165 171 $ 1,867 $ 2,090 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. Investments with an amortized cost of $232,818 and $145,981 and a fair value of $252,601 and $152,916 at September 30, 2020 and December 31, 2019, respectively, were pledged with the Federal Home Loan Bank of New York (FHLBNY) to secure short-term borrowings. |
Realized and Unrealized Gains (
Realized and Unrealized Gains (Losses) | 9 Months Ended |
Sep. 30, 2020 | |
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: Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Realized gains (losses) Fixed maturity securities: Securities available for sale: Gross gains $ 402 $ 950 $ 1,953 $ 3,597 Gross losses (1 ) - (7 ) (319 ) Total fixed securities 401 950 1,946 3,278 Equity investments: Gross gains 67 401 1,057 2,532 Gross losses (479 ) (443 ) (3,249 ) (1,488 ) Gross losses from impaired securities - - (678 ) - Total equity investments (412 ) (42 ) (2,870 ) 1,044 Other invested assets: Gross gains 518 179 744 500 Gross losses - - - (56 ) Total other invested assets 518 179 744 444 Net realized investment gains (losses) $ 507 $ 1,087 $ (180 ) $ 4,766 The gross losses from impaired securities during the nine months ended September 30, 2020 is related to an equity method investment held by the Company. Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Changes in net unrealized gains (losses): Recognized in accumulated other comprehensive income (loss): Fixed maturities – available for sale $ 4,705 $ 11,544 $ 44,943 $ 48,095 Other invested assets 1,498 686 (2,700 ) 1,358 $ 6,203 $ 12,230 $ 42,243 $ 49,453 Not recognized in the consolidated financial statements: Fixed maturities – held to maturity $ (6 ) $ 14 $ 64 $ 50 The change in deferred tax liability on unrealized gains recognized in accumulated other comprehensive income nine months ended September 30, 2020 and 2019 $ and $ , respectively. As of September 30, 2020, and December 31, 2019, no individual investment in securities exceeded 10% of stockholders’ equity. |
Premiums and Other Receivables,
Premiums and Other Receivables, Net | 9 Months Ended |
Sep. 30, 2020 | |
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: September 30, 2020 December 31, 2019 Premium $ 135,133 $ 188,861 Self-funded group receivables 26,310 28,672 FEHBP 14,499 13,894 Agent balances 34,224 30,784 Accrued interest 9,753 11,307 Reinsurance recoverable 222,966 239,767 Other 153,839 110,952 596,724 624,237 Less allowance for doubtful receivables: Premium 37,489 36,622 Other 12,276 19,923 49,765 56,545 Total premium and other receivables, net $ 546,959 $ 567,692 As of September 30, 2020, and December 31, 2019, the Company had premiums and other receivables of $71,322 and $49,176, respectively, from the Government of Puerto Rico, including its agencies, municipalities and public corporations. The related allowance for doubtful receivables as of September 30, 2020 and December 31, 2019 were $24,268 and $22,091, respectively. |
Property and Equipment, Net
Property and Equipment, Net | 9 Months Ended |
Sep. 30, 2020 | |
Property and Equipment, Net [Abstract] | |
Property and Equipment, Net | (6) Property and Equipment, Net Property and equipment, net are composed of the following: September 30, December 31, 2020 2019 Land $ 15,867 $ 10,976 Buildings and leasehold improvements 125,239 92,752 Office furniture and equipment 32,062 27,878 Computer equipment and software 135,456 133,922 Automobiles 671 761 309,295 266,289 Less accumulated depreciation and amortization 179,075 177,701 Property and equipment, net $ 130,220 $ 88,588 On June 19, 2020, the Company acquired a nine-story office building (the Building), located at 1451 F.D. Roosevelt Avenue, in San Juan, Puerto Rico, as well as the adjoining multi-level parking structure and a parking lot. See Note 9 for further information on the credit agreement obtained to partially finance the acquisition of the Building. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | (7) Fair Value Measurements Our condensed consolidated balance sheets include the following financial instruments: securities available for sale, equity investments, policy loans, policyholder deposits, short-term borrowings and long-term borrowings. We consider the carrying amounts of policy loans, policyholder deposits, short-term borrowings and long-term borrowings to approximate their fair value and are considered Level 2 financial instruments. 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 2019 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: September 30, 2020 Level 1 Level 2 Level 3 Total Fixed maturity securities available for sale Obligations of government-sponsored enterprises $ - $ 37,517 $ - $ 37,517 U.S. Treasury securities and obligations of U.S government instrumentalities 112,230 - - 112,230 Municipal securities - 684,572 - 684,572 Corporate bonds - 227,156 - 227,156 Residential agency mortgage-backed securities - 280,569 - 280,569 Collateralized mortgage obligations - 19,956 - 19,956 Total fixed maturities $ 112,230 $ 1,249,770 $ - $ 1,362,000 Equity investments $ 197,864 $ 186,048 $ 5,166 $ 389,078 December 31, 2019 Level 1 Level 2 Level 3 Total Fixed maturity securities available for sale Obligations of government-sponsored enterprises $ - $ 17,686 $ - $ 17,686 U.S. Treasury securities and obligations of U.S government instrumentalities 107,009 - - 107,009 Municipal securities - 629,764 - 629,764 Corporate bonds - 208,743 - 208,743 Residential agency mortgage-backed securities - 270,536 - 270,536 Collateralized mortgage obligations - 9,145 - 9,145 Total fixed maturities $ 107,009 $ 1,135,874 $ - $ 1,242,883 Equity investments $ 177,136 $ 105,180 $ 5,209 $ 287,525 There were no transfers between Levels 1 and 2 during the three and nine months ended September 30, 2020 and the year ended December 31, 2019. 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 nine months ended September 30 is as follows: Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Three months ended Nine months ended September 30, 2020 September 30, 2020 Beginning Balance $ 5,237 $ 5,209 Unrealized in other accumulated comprehensive income (71 ) (43 ) Ending Balance $ 5,166 $ 5,166 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. |
Claim Liabilities
Claim Liabilities | 9 Months Ended |
Sep. 30, 2020 | |
Claim Liabilities [Abstract] | |
Claim Liabilities | (8) Claim Liabilities A reconciliation of the beginning and ending balances of claim liabilities is as follows: Nine months ended September 30, 2020 Managed Care Other Business Segments * Consolidated Claim liabilities at beginning of period $ 341,277 $ 367,981 $ 709,258 Reinsurance recoverable on claim liabilities - (137,017 ) (137,017 ) Net claim liabilities at beginning of period 341,277 230,964 572,241 Claims incurred Current period insured events 2,000,825 84,358 2,085,183 Prior period insured events 24,297 (7,885 ) 16,412 Total 2,025,122 76,473 2,101,595 Payments of losses and loss-adjustment expenses Current period insured events 1,678,400 45,815 1,724,215 Prior period insured events 267,427 41,081 308,508 Total 1,945,827 86,896 2,032,723 Net claim liabilities at end of period 420,572 220,541 641,113 Reinsurance recoverable on claim liabilities - 145,807 145,807 Claim liabilities at end of period $ 420,572 $ 366,348 $ 786,920 * Other Business Segments include the Life Insurance and Property and Casualty segments, as well as intersegment eliminations. Nine months ended September 30, 2019 Managed Care Other Business Segments * Consolidated Claim liabilities at beginning of period $ 394,226 $ 542,563 $ 936,789 Reinsurance recoverable on claim liabilities - (315,543 ) (315,543 ) Net claim liabilities at beginning of period 394,226 227,020 621,246 Claims incurred Current period insured events 1,934,859 85,726 2,020,585 Prior period insured events (29,038 ) (8,254 ) (37,292 ) Total 1,905,821 77,472 1,983,293 Payments of losses and loss-adjustment expenses Current period insured events 1,606,458 41,849 1,648,307 Prior period insured events 303,289 32,145 335,434 Total 1,909,747 73,994 1,983,741 Net claim liabilities at end of period 390,300 230,498 620,798 Reinsurance recoverable on claim liabilities - 181,193 181,193 Claim liabilities at end of period $ 390,300 $ 411,691 $ 801,991 * 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 unfavorable prior period development in the claims incurred and loss-adjustment expenses for prior period insured events for the nine months ended September 30, 2020 are due primarily to higher than expected utilization trends in the Managed Care segment. The favorable development in the claims incurred and loss-adjustment expenses for prior period insured events for the nine months ended September 30, 2019 are due primarily to better than expected utilization trends. Reinsurance recoverable on unpaid claims is reported as premiums and other receivables, net in the accompanying condensed consolidated interim financial statements. The claims incurred disclosed in this table exclude the portion of the change in the liability for future policy benefits expense, which amounted to $27,806 and $26,211 during the nine months ended September 30, 2020 and 2019, 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 September 30, 2020. Incurred Year Total of IBNR Liabilities Plus Expected Development on Reported Claims 2019 $ 29,283 2020 322,425 |
Borrowings
Borrowings | 9 Months Ended |
Sep. 30, 2020 | |
Borrowings [Abstract] | |
Borrowings | (9) Borrowings Long-Term Borrowings A summary of the borrowings entered by the Company are as follows: September 30, 2020 December 31, 2019 Secured loan payable of $11,187, payable in monthly installments of $137 through October 1, 2023, plus interest at a rate reset periodically of 100 basis points over selected LIBOR maturity (which was 1.16% at September 30, 2020). $ 5,037 $ 6,267 Secured loan payable of $20,150, payable in monthly installments of $84 through January 1, 2024, plus interest at a rate reset periodically of 275 basis points over selected LIBOR maturity (which was 3.05% at September 30, 2020). 16,456 17,211 Secured loan payable of $4,116, payable in monthly installments of $49 through January 1, 2024, plus interest at a rate reset periodically of 325 basis points over selected LIBOR maturity (which was 3.55% at September 30, 2020). 1,960 2,401 Secured loan payable of $31,350, payable in monthly installments of $105 through May 1, 2025, plus interest at prime rate (which was 3.22% at September 30, 2020). Last payment of $25,185 due on June 19, 2025. 31,036 - Total borrowings 54,489 25,879 Less: unamortized debt issuance costs 653 185 $ 53,836 $ 25,694 Aggregate maturities of the Company’s borrowings as of September 30, 2020 are summarized as follows: Remaining of 2020 $ 1,122 2021 4,490 2022 4,490 2023 4,196 2024 14,484 Thereafter 25,707 $ 54,489 On June 19, 2020, TSM entered into a $31,350 Credit Agreement (the Loan) with a commercial bank in Puerto Rico. The proceeds of the Loan were used by the Company to partially finance the acquisition of the Building (see Note 6). The Loan is guaranteed by a mortgage over the Building, a pledge of all collateral related to the Building and an assignment of the rents collected for the lease of office space in the Building. Pursuant to the credit agreement, interest is payable on the outstanding principal balance of the Loan at an annual rate equal to the Prime Rate. Interest shall be paid on a monthly basis commencing on July 1, 2020 until the principal of the Loan has been paid in full. The Company may, at its option and at any time, upon written notice as specified in the credit agreement, prepay prior to maturity, all or any part of the Loan upon the payment of a penalty fee of the outstanding principal amount at the time of the prepayment of 3% during the first year, 2% during the second year and 1% during the third year, and thereafter at par. The four term loans under credit agreements with commercial banks in Puerto Rico include certain customary financial and non-financial covenants, including negative covenants imposing certain restrictions on the Corporation’s business. The Company was in compliance with all these covenants as of September 30, 2020. Short-term Borrowings The Company has several short-term facilities available to address timing differences between cash receipts and disbursements, consisting of collateralized advances from FHLBNY and a revolving credit facility. • In August 2019, Triple-S Salud, Inc. (TSS) and Triple-S Vida, Inc. (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 with the Commissioner of Insurance but is constrained by the amount of collateral held at the FHLBNY (see Note 3). As of September 30, 2020, the borrowing capacity was approximately $119,329 for TSS and $87,940 for TSV. As of December 31, 2019, the borrowing capacity was approximately $82,200 for TSS and $48,900 for TSV. The outstanding balance as of September 30, 2020 for TSS is $62,500 and TSV is $20,000. The outstanding balance as of December 31, 2019 for TSS and TSV was $25,000 and $29,000, respectively. The average interest rate of the outstanding balance is 0.34% and 1.79% as of September 30, 2020 and December 31, 2019, respectively. • Triple-S Advantage, Inc. (TSA) has a $10,000 revolving loan agreement with a commercial bank in Puerto Rico. This line of credit has an interest rate of 30-day LIBOR plus 250 basis points and contains certain financial and non-financial covenants that are customary for this type of facility. This line of credit matures on June 30, 2021. As of September 30, 2020, there is no outstanding balance. |
Pension Plan
Pension Plan | 9 Months Ended |
Sep. 30, 2020 | |
Pension Plan [Abstract] | |
Pension Plan | (10) Pension Plan The components of net periodic benefit cost were as follows: Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Components of net periodic benefit cost (income): Interest cost $ 1,474 $ 1,748 $ 4,554 $ 5,230 Expected return on assets (2,211 ) (2,209 ) (6,629 ) (6,643 ) Amortization of actuarial loss 396 98 884 277 Settlement loss 356 555 1,068 1,305 Net periodic benefit cost (income) $ 15 $ 192 $ (123 ) $ 169 Employer Contributions: |
Stock Repurchase Programs
Stock Repurchase Programs | 9 Months Ended |
Sep. 30, 2020 | |
Stock Repurchase Programs [Abstract] | |
Stock Repurchase Programs | (11) Stock Repurchase Program The Company repurchases shares through open market transactions, in accordance with Rule 10b-18 of the Securities Exchange Act of 1934, as amended, under repurchase programs authorized by the Board of Directors. Shares purchased under share repurchase programs are retired and returned to authorized and unissued status. In August 2017 the Company’s Board of Directors authorized a $30,000 repurchase program (2017 $30,000 program) of its Class B common stock. In February 2018 the Company’s Board of Directors authorized a $25,000 expansion of this program. In October 2019 the Company’s Board of Directors authorized an expansion to this repurchase program increasing its remaining balance up to a total of $25,000, effective November 2019. During the three months ended September 30, 2020, no stocks were repurchased under a repurchase program. During the nine months ended September 30, 2020, the Company repurchased and retired under this program 952,820 shares at an average per share price of $15.72, for an aggregate cost of $14,982. During the three months and nine months ended September 30, 2019 no stocks were repurchased under a repurchase program. This program was completed in May 2020. |
Reinsurance
Reinsurance | 9 Months Ended |
Sep. 30, 2020 | |
Reinsurance [Abstract] | |
Reinsurance | (12) 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 and for the three months ended September 30, 2020 and 2019 respectively, and and for the nine months ended September 30, 2020 and 2019 respectively. Ceded incurred losses and loss adjustment expenses during the three months and nine months ended September 30, 2020 and 2019 were $ and $ , respectively, and $ and $ , respectively. The ceded incurred losses and loss adjustment expenses for the nine months ended September 30, 2020 include $ related to earthquake losses ceded under catastrophe reinsurance. Principal reinsurance agreements are as follows: • Casualty excess of loss treaty provides reinsurance for losses up to subject to a retention of • Medical malpractice excess of loss treaty provides reinsurance for losses up to subject to a retention of • Property reinsurance treaty includes proportional cessions and a per risk excess of loss contract limiting losses to in risks. • Catastrophe protection is purchased limiting losses to per event with losses up to approximately in a event. 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, 2020 for a twelve months period ending March 31, 2021. Other contracts were renewed as expiring on January 1, 2020. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Leases | (13) Leases The Company’s subsidiaries lease their regional offices, certain equipment, and warehouse facilities under non-cancelable operating leases. These contracts generally do not include purchase options or residual value guarantees. The remaining lease terms ranges from 0.2 to 14.2 years. The Company identifies leases when it has both the right to obtain substantially all economic benefits from the use of the asset and the right to direct the use of the asset. The Company recognizes the right-of -use of assets and lease liabilities related to operating leases in its balance sheet statement under the caption of other assets accounts payables and accrued liabilities The Company uses the incremental borrowing rate for purposes of discounting lease payments for our operating leases since our lease agreements do not provide a readily determinable implicit rate. We estimate our incremental borrowing rate by using an interest rate index and add a credit spread to this rate financing transactions with a similar credit risk profile Undiscounted cash flows of operating leases are summarized as follows: Remaning of 2020 $ 1,062 2021 3,998 2022 3,420 2023 2,329 2024 1,855 Thereafter 3,590 Total lease payments 16,254 Less: imputed interest (2,083 ) Total $ 14,171 At December 31, 2019, operating lease commitments under lessee arrangements were $4,713, $3,790, $3,200, $2,171, $1,710 and $2,707 for 2020 through 2024 and thereafter, respectively. The following presents the lease cost recognized by the Company: Nine months ended September 30, 2020 Operating lease cost $ 3,570 Short-term lease cost 801 Total lease cost $ 4,371 Also, the Company leases certain floors of one of its buildings and generates rental income. Maturity analysis of lease payments to be received from its lessees as of September 30, 2020, is summarized as follows: Remaining of 2020 $ 473 2021 1,909 2022 1,947 2023 1,986 2024 2,026 Thereafter 2,624 Total $ 10,965 |
Comprehensive Income (Loss)
Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2020 | |
Comprehensive Income (Loss) [Abstract] | |
Comprehensive Income (Loss) | (14) Comprehensive Income (Loss) The accumulated balances for each classification of other comprehensive income (loss), net of tax, are as follows: Three months ended Nine months ended September 30, September 30, 2020 2019 2020 2019 Net Unrealized Gain on Securities Beginning Balance $ 85,110 $ 55,678 $ 57,830 $ 27,308 Other comprehensive income before reclassifications 5,149 10,160 31,879 41,473 Amounts reclassified from accumulated other comprehensive (loss) income (406 ) (870 ) 144 (3,813 ) Net current period change 4,743 9,290 32,023 37,660 Ending Balance 89,853 64,968 89,853 64,968 Liability for Pension Benefits Beginning Balance (28,161 ) (24,134 ) (28,467 ) (24,246 ) Amounts reclassified from accumulated other comprehensive income 247 61 553 173 Ending Balance (27,914 ) (24,073 ) (27,914 ) (24,073 ) Accumulated Other Comprehensive Income (Loss) Beginning Balance 56,949 31,544 29,363 3,062 Other comprehensive income before reclassifications 5,149 10,160 31,879 41,473 Amounts reclassified from accumulated other comprehensive (loss) income (159 ) (809 ) 697 (3,640 ) Net current period change 4,990 9,351 32,576 37,833 Ending Balance $ 61,939 $ 40,895 $ 61,939 $ 40,895 |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2020 | |
Share-Based Compensation [Abstract] | |
Share-Based Compensation | (15) Share-Based Compensation Share-based compensation expense recorded during the three months ended September 30, 2020 and 2019 was and respectively. Share-based compensation expense recorded during the nine months ended September 30, 2020 and 2019 was and respectively. ended September 30, 2020, shares were repurchased and retired as the result of non-cash tax withholdings upon vesting of shares. During the nine months ended September 30, 2020 and 2019 and shares, respectively, were repurchased and retired as the result of non-cash tax withholdings upon vesting of shares. There were non-cash tax withholdings during the three months ended September 30, 2019 |
Net Income Available to Stockho
Net Income Available to Stockholders and Net Income per Share | 9 Months Ended |
Sep. 30, 2020 | |
Net Income Available to Stockholders and Net Income per Share [Abstract] | |
Net Income Available to Stockholders and Net Income per Share | (16) Net Income Available to Stockholders and Net Income per Share The following table sets forth the computation of basic and diluted earnings per share: Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Numerator for earnings per share: Net income attributable to TSM available to stockholders $ 23,581 $ 13,948 $ 41,035 $ 79,665 Denominator for basic earnings per share: Weighted average of common shares 23,073,511 23,830,106 23,215,840 23,143,361 Effect of dilutive securities 120,469 63,701 102,229 73,937 Denominator for diluted earnings per share 23,193,980 23,893,807 23,318,069 23,217,298 Basic net income per share attributable to TSM $ 1.02 $ 0.59 $ 1.77 $ 3.44 Diluted net income per share attributable to TSM $ 1.02 $ 0.58 $ 1.76 $ 3.43 |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Contingencies [Abstract] | |
Contingencies | (17) Contingencies The following information supplements and amends, as applicable, the disclosures in Note 24 to the Consolidated Financial Statements of the Company’s 2019 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. The Company is also defendant 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 the Company believes the 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. However, there are legal proceedings where a loss is reasonably possible, and for which it is possible to reasonably estimate the amount of the possible loss or range of losses. We currently believe that the range of possible losses for such proceedings in excess of established reserves is, in the aggregate, from $0 to approximately $10,000 at September 30, 2020. The outcome of legal proceedings is inherently uncertain; pending matters for which accruals have not been established have not progressed sufficiently to enable us to estimate a range of possible loss, if any. Given the inherent unpredictability of these matters, it is possible that an adverse outcome in one or more of these matters could have a material effect on the consolidated financial condition, operating results and/or cash flows of the Company. Additionally, we may face various potential litigation claims that have not been asserted to date. Claims by Heirs of Former Shareholders The Company and TSS are defending four individual lawsuits: Vera Sanchez, et al, v. Triple-S; Olivella Zalduondo, et al, v. Seguros de Servicios 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 41 shares of the Company or one of its predecessors or affiliates (before giving effect to a 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 is 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. In Cebollero Santamaria v. Triple-S Salud, Inc., et. al. the Puerto Rico Court of First Instance entered partial summary judgment in favor of plaintiff on June 20, 2019. The Company filed a request for reconsideration that is pending adjudication and intends to continue defending this case vigorously in an appeal stage if necessary. In Vera Sanchez, et. al. v. Triple-S, Inc., the Puerto Rico Court of First Instance entered summary judgment in favor of the Company. Plaintiffs appealed before the Puerto Rico Court of Appeals. The Company filed its opposition on October 31, 2019. On June 24, 2020, the Court of Appeals revoked the summary judgement and remanded the case back to the Court of First Instance on the grounds that summary judgement was inappropriate because there are disputes as to issues of material fact. We will continue to defend this case vigorously. In Ruiz de Porras, et. al. v. Triple-S, Inc. the Company intends to file a motion for summary judgment to dismiss all claims once new discovery matters are completed. In Olivella Zalduondo, et al, v. Seguros de Servicios de Salud, et al, the Court of First Instance entered summary judgment in favor of the Company in November 2019, dismissing the complaint with prejudice. Plaintiffs appealed the decision on January 16, 2020. The Company will continue to defend this case as needed. In re Blue Cross Blue Shield Antitrust Litigation TSS is a co-defendant with multiple Blue Plans and the Blue Cross Blue Shield Association 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 with subscribers in April 2019 and with providers in September 2019. The Defendants have reached a tentative settlement agreement with subscribers. The agreement remains subject to approval from the Federal District Court for the Northern District of Alabama. However, based on this agreement, the Company has accrued $32,000 related to this legal proceeding during the nine months ended September 30, 2020. Claims Relating to the Provision of Health Care Services TSS is a defendant in several claims for collection of monies in connection with the provision of health care services. On January 12, 2015, American Clinical Solutions LLC, a limited liability company that provides clinical laboratory services filed a complaint in Florida state court alleging that TSM and TSS failed to pay certain clinical laboratory services provided to Blue Cross Blue Shield members. TSS and TSM have filed a motion to dismiss alleging lack of jurisdiction. TSM and TSS also requested a transfer of the case to Puerto Rico. Plaintiff has requested jurisdictional discovery, which is ongoing. The claim amounts to $5,000. TSS and TSM will continue to vigorously oppose this claim . |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2020 | |
Segment Information [Abstract] | |
Segment Information | (18) 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 nine months ended September 30, 2020 and 2019: Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Operating revenues: Managed Care: Premiums earned, net $ 849,529 $ 746,043 $ 2,447,588 $ 2,244,448 Administrative service fees 3,013 2,607 8,755 7,695 Intersegment premiums/service fees 644 1,483 2,624 4,612 Net investment income 5,065 5,624 14,763 16,981 Total managed care 858,251 755,757 2,473,730 2,273,736 Life Insurance: Premiums earned, net 49,616 45,365 143,325 133,598 Intersegment premiums 516 471 1,552 1,457 Net investment income 6,900 6,709 20,625 20,091 Total life insurance 57,032 52,545 165,502 155,146 Property and Casualty Insurance: Premiums earned, net 23,789 23,613 66,453 64,470 Intersegment premiums 153 153 460 460 Net investment income 2,103 2,533 6,551 7,404 Total property and casualty insurance 26,045 26,299 73,464 72,334 Other segments: * Intersegment service revenues 2,595 2,076 7,637 6,049 Operating revenues from external sources 2,052 3,167 6,394 6,335 Total other segments 4,647 5,243 14,031 12,384 Total business segments 945,975 839,844 2,726,727 2,513,600 TSM operating revenues from external sources 100 310 355 1,138 Elimination of intersegment premiums/service fees (574 ) (2,107 ) (4,636 ) (6,529 ) Elimination of intersegment service revenues (2,595 ) (2,076 ) (7,637 ) (6,049 ) Consolidated operating revenues $ 942,906 $ 835,971 $ 2,714,809 $ 2,502,160 * Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Operating income (loss): Managed care $ 13,006 $ 5,393 $ 56,495 $ 56,805 Life insurance 5,682 6,686 20,188 17,541 Property and casualty insurance 4,386 6,620 10,921 14,958 Other segments * (1,639 ) (690 ) (4,552 ) (1,812 ) Total business segments 21,435 18,009 83,052 87,492 TSM operating revenues from external sources 100 310 355 1,138 TSM unallocated operating expenses (1,633 ) (1,643 ) (4,877 ) (6,812 ) Elimination of TSM intersegment charges 2,403 2,403 7,209 7,209 Consolidated operating income 22,305 19,079 85,739 89,027 Consolidated net realized investment gains (losses) 507 1,087 (180 ) 4,766 Consolidated net unrealized investment gains (losses) on equity investments 11,040 1,267 (17,428 ) 24,259 Consolidated interest expense (2,096 ) (2,062 ) (5,813 ) (5,681 ) Consolidated other income, net 1,811 485 6,217 3,359 Consolidated income before taxes $ 33,567 $ 19,856 $ 68,535 $ 115,730 Depreciation and amortization expense: Managed care $ 2,085 $ 2,931 $ 8,061 $ 8,480 Life insurance 289 268 869 813 Property and casualty insurance 93 86 296 266 Other segments* 240 249 913 627 Total business segments 2,707 3,534 10,139 10,186 TSM depreciation expense 404 150 716 543 Consolidated depreciation and amortization expense $ 3,111 $ 3,684 $ 10,855 $ 10,729 * September 30, 2020 December 31, 2019 Assets: Managed care $ 1,406,356 $ 1,190,538 Life insurance 1,039,765 981,370 Property and casualty insurance 603,728 592,758 Other segments * 30,408 28,346 Total business segments 3,080,257 2,793,012 Unallocated amounts related to TSM: Cash, cash equivalents, and investments 19,881 28,167 Property and equipment, net 67,316 25,623 Other assets 45,927 37,176 133,124 90,966 Elimination entries-intersegment receivables and others (93,094 ) (65,152 ) Consolidated total assets $ 3,120,287 $ 2,818,826 * Includes segments that are not required to be reported separately, primarily the health clinics. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | (19) Subsequent Events The Company evaluated subsequent events through the date the unaudited condensed consolidated interim financial statements were issued. No events, other than those described in these notes, have occurred that require adjustment or disclosure pursuant to current Accounting Standard Codification. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | The accompanying condensed consolidated interim financial statements prepared by Triple-S Management Corporation and its subsidiaries are unaudited. In this filing, the “Corporation”, the “Company”, “TSM”, “we”, “us” and “our” refer to Triple-S Management Corporation and its subsidiaries. The condensed consolidated interim financial statements do not include all of the information and the footnotes required by accounting principles generally accepted in the 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). Accordingly, these condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. 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, 2020 are not necessarily indicative of the results for the full year ending December 31, 2020. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Significant Accounting Policies [Abstract] | |
Investments | Investments Fixed maturities Investment in debt securities at September 30, 2020 and December 31, 2019 consists mainly of obligations of government-sponsored enterprises, U.S. Treasury securities and obligations of U.S. government instrumentalities, municipal securities, corporate bonds, residential mortgage-backed securities, and collateralized mortgage obligations. The Company classifies its debt securities in one of two categories: available-for-sale or held-to-maturity. Securities classified as held-to-maturity are those securities in which the Company has the ability and intent to hold until maturity. All other securities not included in held-to-maturity are classified as available-for-sale. Available-for-sale securities are recorded at fair value. The fair values of debt securities (both available-for-sale and held-to-maturity investments) are based on quoted market prices for those or similar investments at the reporting date. Held-to-maturity debt securities are recorded at amortized cost, adjusted for the amortization or accretion of premiums and discounts, respectively. Unrealized holding gains and losses, net of the related tax effect, on available-for-sale securities are excluded from earnings and are reported as a separate component of other comprehensive income until realized. Realized gains and losses from the sale of available-for-sale securities are included in earnings and are determined on a specific identification basis. Transfers of securities between categories are recorded at fair value at the date of transfer. Unrealized holding gains or losses associated with transfers of securities from held-to-maturity to available-for-sale are recorded as a separate component of other comprehensive income. The unrealized holding gains or losses included in the separate component of other comprehensive income for securities transferred from available-for-sale to held-to-maturity, are maintained and amortized into earnings over the remaining life of the security as an adjustment to yield in a manner consistent with the amortization or accretion of premium or discount on the associated security. If a fixed maturity security is in an unrealized loss position and the Company does not have the intent to sell the fixed maturity security, or it is more likely than not that the Company will not have to sell the fixed maturity security before recovery of its amortized cost basis, the credit component of the impairment, if any, is recorded as an allowance for credit losses with an offsetting entry in the Company’s consolidated statements of earnings. The non-credit component of the impairment is recognized in other comprehensive income. Furthermore, unrealized losses entirely caused by non-credit related factors related to fixed maturity securities for which the Company expects to fully recover the amortized cost basis continue to be recognized in accumulated other comprehensive income. If a fixed maturity security is in an unrealized loss position and the Company has the intent to sell the fixed maturity security, or it is more likely than not that the Company will have to sell the fixed maturity security before recovery of its amortized cost basis, the Company will write off any previously recognized allowance for credit losses and will decrease the amortized cost basis of the security. If the allowance has been fully written off and the fair value is less than its amortized cost basis, the amortized cost basis is written down and an impairment loss is recognized in the Company’s consolidated statements of earnings. As of September 30, 2020, no allowance for credit losses was recorded in the condensed consolidated interim financial statements. The credit component of the impairment is determined by comparing the net present value of projected future cash flows with the amortized cost basis of the fixed maturity security. The net present value is calculated by discounting the Company’s best estimate of projected future cash flows at the effective interest rate implicit in the fixed maturity security at the date of acquisition. If there is an increase in the projected future cash flows of the fixed maturity security in subsequent periods, all or part of the allowance for credit losses may be reversed. In addition, the Company considers the following factors when evaluating whether a credit loss exist: the reasons for the impairment, the severity of the impairment, market conditions, changes in the security’s rating, changes in value subsequent to year-end, forecasted performance of the investee, and the general market condition in the geographic area or industry the investee operates in. Premiums and discounts are amortized or accreted over the life of the related held-to-maturity or available-for-sale security as an adjustment to yield using the effective interest method. Dividend and interest income are recognized when earned. The Company regularly invests in mortgaged-backed securities and other securities subject to prepayment and call risk. Significant changes in prevailing interest rates may adversely affect the timing and amount of cash flows on such securities. In addition, the amortization of market premium and accretion of market discount for mortgaged-backed securities is based on historical experience and estimates of future payment speeds on the underlying mortgage loans. Actual prepayment speeds may differ from original estimates and may result in material adjustments to amortization or accretion recorded in future periods. Equity investments Investment in equity securities at September 30, 2020 and December 31, 2019 consists of mutual funds whose underlying assets are comprised of domestic equity securities, international equity securities and higher risk fixed income instruments. Equity investments are recorded at fair value. The fair values of equity investments are mainly based on quoted market prices for those or similar investments at the reporting date. For a specific equity investment, the fair value is estimated using the net asset value (NAV) of the Company’s ownership interest in the partnership. Unrealized holding gains and losses on equity investments are included in earnings. Realized gains and losses from the sale of equity investments are included in earnings and are determined on a specific identification basis. Other invested assets Other invested assets at September 30, 2020 and December 31, 2019 consist mainly of alternative investments in partnerships that invest in several private debt and private equity funds. Portfolios are diversified by vintage year, stage, geography, business sectors and number of investments. These investments are not redeemable with the funds. Distributions from each fund are received as the underlying investments of the funds are liquidated. It is estimated that the underlying assets of the funds will be liquidated in the next 5 to 12 years. The fair value of the investments in this class have been estimated using the net asset value (NAV) of the Company’s ownership interest in the partnerships. Total unfunded capital commitments for these positions as of September 30, 2020 amounted to $57,762. The remaining average commitments period is approximately three years. |
Health Insurance Providers Fee | Health Insurance Providers Fee The Patient Protection and Affordable Care Act (ACA) as amended by the Health Care and Education Reconciliation Act mandates an annual Health Insurance Providers Fee (HIP Fee). The annual HIP Fee becomes payable to the U.S. Treasury once the entity provides health insurance for any U.S. health risk each applicable calendar year. The initial estimated annual fee is accrued as of January 1, with a corresponding deferred cost that is amortized over 12 months on a straight-line basis. The fee payment is due on September 30 of each year. The deferred cost is included within the other asset line item and the accrued fee is included within the accounts payable and accrued liabilities line item in the accompanying condensed consolidated balance sheets. The fee is presented within operating expenses in the accompanying condensed consolidated statements of earnings. The HIP Fee was waived for all health insurance providers during the year ended December 31, 2019. The Taxpayer Certainty and Disaster Tax Relief Act of 2019 and the Further Consolidated Appropriations Act of 2020, signed into law on December 20, 2019, repealed the HIP Fee effective calendar years beginning after December 31, 2020. As of September 30, 2020, the HIP Fee deferred cost amounted to $12,139. During the quarter ended September 30, 2020, the Company made the corresponding payment amounting to $55,514. As of December 31, 2019, no balance was deferred or accrued for the HIP Fee. |
Recently Adopted Accounting Standards and Future Adoptions of Accounting Standards | Recently Adopted Accounting Standards On June 16, 2016, the Financial Accounting Standards Board (FASB) issued guidance to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date by replacing the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. In addition, 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 amendments 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. The Company adopted the standard effective January 1, 2020 and recognized $166, net of deferred tax asset, as a cumulative effect adjustment to the opening balance of retained earnings on the adoption date. On January 26, 2017, the FASB issued guidance to simplify the manner in which an entity is required to evaluate goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. Instead, under the amendments in this guidance, an entity should (1) perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount, and (2) recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, with the understanding that the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, this guidance removes the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails such qualitative test, to perform Step 2 of the goodwill impairment test. For public companies, these amendments, which should be applied on a prospective basis, are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company adopted the standard effective January 1, 2020. Upon adoption of this standard, if the carrying amount of any of the reporting units exceeds its fair value, the Company will be required to record an impairment charge for the difference up to the amount of the goodwill. On August 27, 2018, the FASB issued guidance for Fair Value Measurement – Disclosure Framework – Changes to the Disclosure Requirement for Fair Value Measurement. This update focuses on improving the effectiveness of disclosures in the notes to the financial statements by facilitating clear communication of the information required by U.S. GAAP that is most important to users of each entity’s financial statements. Specifically, certain disclosure requirements are removed (the amount of, and reasons for, transfer between Level 1 and Level 2 of the fair value hierarchy; the policy for timing of transfers between levels; the valuation processes for Level 3 fair value measurements) while certain other disclosures are modified and added (changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period, and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements). The amendments regarding changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent period in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. For public companies, these amendments will be applied for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company adopted the standard effective January 1, 2020. The adoption of this guidance did not have a material impact on the presentation and disclosures of the Company’s condensed consolidated interim financial statements. On August 29, 2018, the FASB issued guidance for Intangibles – Goodwill and Other – Internal-Use Software. Guidance addresses customers’ accounting for implemented costs incurred in a cloud computing arrangement that is a service contract and aims to reduce complexity in the accounting for costs of implementing a cloud computing service arrangement. The amendments require a customer in a hosting arrangement that is a service contract to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. Additionally, it requires the customer to expense the capitalized implementation costs over the term of the hosting arrangement. For public companies, these amendments will be applied on a prospective basis, for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company adopted the standard effective January 1, 2020. The adoption of this guidance did not have a material impact on the results of the Company’s condensed consolidated interim financial statements. Future Adoption of Accounting Standards On March 12, 2020, the FASB issued ASU 2020-04: Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The ASU was issued to provide optional guidance, for a limited time, to ease the potential burden in accounting for or recognizing the effects of reference rate reform on financial reporting. The amendments, which are elective and apply to all entities, provide expedients and exceptions for applying U.S. GAAP to contract modifications and hedging relationships affected by reference rate reform if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference LIBOR or another reference rate that is expected to be discontinued due to reference rate reform. Because the guidance is intended to assist stakeholders during the global market-wide reference rate transition period, it is in effect for a limited time, from March 12, 2020 through December 31, 2022. The Company is currently in the process of identifying its LIBOR-based contracts that will be impacted by the phase-out of LIBOR and expects to utilize the optional expedients provided in this ASU. 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, 2020 that could have a material impact on the Company’s financial position, operating results or financials statement disclosures. |
Investment in Securities (Table
Investment in Securities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Investment in Securities [Abstract] | |
Amortized Cost and Estimated Fair Value for Available-for-Sale and Held-to-Maturity Securities by Major Security Type and Class of Security | The amortized cost for debt securities and cost for alternative investments, 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 September 30, 2020 and December 31, 2019, were as follows: September 30, 2020 Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value Fixed maturities available for sale Obligations of government- sponsored enterprises $ 36,762 $ 784 $ (29 ) $ 37,517 U.S. Treasury securities and obligations of U.S. government instrumentalities 103,483 8,747 - 112,230 Municipal securities 628,689 56,009 (126 ) 684,572 Corporate bonds 195,293 31,863 - 227,156 Residential mortgage-backed securities 263,715 17,230 (376 ) 280,569 Collateralized mortgage obligations 19,275 726 (45 ) 19,956 Total fixed maturities available for sale $ 1,247,217 $ 115,359 $ (576 ) $ 1,362,000 December 31, 2019 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Fixed maturities available for sale Obligations of government- sponsored enterprises $ 17,209 $ 477 $ - $ 17,686 U.S. Treasury securities and obligations of U.S. government instrumentalities 102,230 4,779 - 107,009 Municipal securities 595,051 34,735 (22 ) 629,764 Corporate bonds 187,096 21,721 (74 ) 208,743 Residential mortgage-backed securities 262,783 8,073 (320 ) 270,536 Collateralized mortgage obligations 8,674 471 - 9,145 Total fixed maturities available for sale $ 1,173,043 $ 70,256 $ (416 ) $ 1,242,883 September 30, 2020 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 $ 614 $ 217 $ - $ 831 Residential mortgage-backed securities 165 6 - 171 Certificates of deposit 1,088 - - 1,088 Total $ 1,867 $ 223 $ - $ 2,090 December 31, 2019 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 $ 615 $ 158 $ - $ 773 Residential mortgage-backed securities 165 1 - 166 Certificates of deposit 1,080 - - 1,080 Total $ 1,860 $ 159 $ - $ 2,019 September 30, 2020 Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value Other invested assets - Alternative investments $ 110,532 $ 3,795 $ (3,562 ) $ 110,765 December 31, 2019 Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value Other invested assets - Alternative investments $ 97,575 $ 3,721 $ (788 ) $ 100,508 |
Securities in Continuous Unrealized Loss Position | Gross unrealized losses on investment securities and the estimated fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of September 30, 2020 and December 31, 2019 were as follows: September 30, 2020 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 $ 9,511 $ (29 ) 1 $ - $ - - $ 9,511 $ (29 ) 1 Municipal securities 21,832 (126 ) 4 - - - 21,832 (126 ) 4 Residential mortgage-backed securities 22,551 (376 ) 8 - - - 22,551 (376 ) 8 Collateralized mortgage obligations 8,847 (45 ) 2 - - - 8,847 (45 ) 2 Total fixed maturities $ 62,741 $ (576 ) 15 $ - $ - - $ 62,741 $ (576 ) 15 Other invested assets - Alternative investments $ 12,873 $ (1,933 ) 4 $ 16,308 $ (1,629 ) 6 $ 29,181 $ (3,562 ) 10 December 31, 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 Municipal securities $ 10,656 $ (22 ) 3 $ - $ - - $ 10,656 $ (22 ) 3 Corporate bonds 5,047 (74 ) 1 - - - 5,047 (74 ) 1 Residential mortgage-backed securities 79,902 (320 ) 16 - - - 79,902 (320 ) 16 Total fixed maturities $ 95,605 $ (416 ) 20 $ - $ - - $ 95,605 $ (416 ) 20 Other invested assets - Alternative investments $ 24,437 $ (605 ) 8 $ 10,580 $ (183 ) 1 $ 35,017 $ (788 ) 9 |
Maturities of Investment Securities Classified as Available for Sale and Held to Maturity | Maturities of investment securities classified as available for sale and held to maturity were as follows: September 30, 2020 Amortized cost Estimated fair value Fixed maturities available for sale Due in one year or less $ 33,764 $ 34,244 Due after one year through five years 564,825 610,357 Due after five years through ten years 204,234 220,251 Due after ten years 161,404 196,623 Residential mortgage-backed securities 263,715 280,569 Collateralized mortgage obligations 19,275 19,956 $ 1,247,217 $ 1,362,000 Fixed maturities held to maturity Due in one year or less $ 1,088 $ 1,088 Due after ten years 614 831 Residential mortgage-backed securities 165 171 $ 1,867 $ 2,090 |
Realized and Unrealized Gains_2
Realized and Unrealized Gains (Losses) (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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: Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Realized gains (losses) Fixed maturity securities: Securities available for sale: Gross gains $ 402 $ 950 $ 1,953 $ 3,597 Gross losses (1 ) - (7 ) (319 ) Total fixed securities 401 950 1,946 3,278 Equity investments: Gross gains 67 401 1,057 2,532 Gross losses (479 ) (443 ) (3,249 ) (1,488 ) Gross losses from impaired securities - - (678 ) - Total equity investments (412 ) (42 ) (2,870 ) 1,044 Other invested assets: Gross gains 518 179 744 500 Gross losses - - - (56 ) Total other invested assets 518 179 744 444 Net realized investment gains (losses) $ 507 $ 1,087 $ (180 ) $ 4,766 |
Changes in Net Unrealized Gains (Losses) | The gross losses from impaired securities during the nine months ended September 30, 2020 is related to an equity method investment held by the Company. Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Changes in net unrealized gains (losses): Recognized in accumulated other comprehensive income (loss): Fixed maturities – available for sale $ 4,705 $ 11,544 $ 44,943 $ 48,095 Other invested assets 1,498 686 (2,700 ) 1,358 $ 6,203 $ 12,230 $ 42,243 $ 49,453 Not recognized in the consolidated financial statements: Fixed maturities – held to maturity $ (6 ) $ 14 $ 64 $ 50 |
Premiums and Other Receivable_2
Premiums and Other Receivables, Net (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Premiums and Other Receivables, Net [Abstract] | |
Premiums and Other Receivables, Net | Premiums and other receivables, net were as follows: September 30, 2020 December 31, 2019 Premium $ 135,133 $ 188,861 Self-funded group receivables 26,310 28,672 FEHBP 14,499 13,894 Agent balances 34,224 30,784 Accrued interest 9,753 11,307 Reinsurance recoverable 222,966 239,767 Other 153,839 110,952 596,724 624,237 Less allowance for doubtful receivables: Premium 37,489 36,622 Other 12,276 19,923 49,765 56,545 Total premium and other receivables, net $ 546,959 $ 567,692 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Property and Equipment, Net [Abstract] | |
Property and Equipment, Net | Property and equipment, net are composed of the following: September 30, December 31, 2020 2019 Land $ 15,867 $ 10,976 Buildings and leasehold improvements 125,239 92,752 Office furniture and equipment 32,062 27,878 Computer equipment and software 135,456 133,922 Automobiles 671 761 309,295 266,289 Less accumulated depreciation and amortization 179,075 177,701 Property and equipment, net $ 130,220 $ 88,588 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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: September 30, 2020 Level 1 Level 2 Level 3 Total Fixed maturity securities available for sale Obligations of government-sponsored enterprises $ - $ 37,517 $ - $ 37,517 U.S. Treasury securities and obligations of U.S government instrumentalities 112,230 - - 112,230 Municipal securities - 684,572 - 684,572 Corporate bonds - 227,156 - 227,156 Residential agency mortgage-backed securities - 280,569 - 280,569 Collateralized mortgage obligations - 19,956 - 19,956 Total fixed maturities $ 112,230 $ 1,249,770 $ - $ 1,362,000 Equity investments $ 197,864 $ 186,048 $ 5,166 $ 389,078 December 31, 2019 Level 1 Level 2 Level 3 Total Fixed maturity securities available for sale Obligations of government-sponsored enterprises $ - $ 17,686 $ - $ 17,686 U.S. Treasury securities and obligations of U.S government instrumentalities 107,009 - - 107,009 Municipal securities - 629,764 - 629,764 Corporate bonds - 208,743 - 208,743 Residential agency mortgage-backed securities - 270,536 - 270,536 Collateralized mortgage obligations - 9,145 - 9,145 Total fixed maturities $ 107,009 $ 1,135,874 $ - $ 1,242,883 Equity investments $ 177,136 $ 105,180 $ 5,209 $ 287,525 |
Reconciliation of Assets Measured at Fair Value on Recurring Basis | 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 nine months ended September 30 is as follows: Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Three months ended Nine months ended September 30, 2020 September 30, 2020 Beginning Balance $ 5,237 $ 5,209 Unrealized in other accumulated comprehensive income (71 ) (43 ) Ending Balance $ 5,166 $ 5,166 |
Claim Liabilities (Tables)
Claim Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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: Nine months ended September 30, 2020 Managed Care Other Business Segments * Consolidated Claim liabilities at beginning of period $ 341,277 $ 367,981 $ 709,258 Reinsurance recoverable on claim liabilities - (137,017 ) (137,017 ) Net claim liabilities at beginning of period 341,277 230,964 572,241 Claims incurred Current period insured events 2,000,825 84,358 2,085,183 Prior period insured events 24,297 (7,885 ) 16,412 Total 2,025,122 76,473 2,101,595 Payments of losses and loss-adjustment expenses Current period insured events 1,678,400 45,815 1,724,215 Prior period insured events 267,427 41,081 308,508 Total 1,945,827 86,896 2,032,723 Net claim liabilities at end of period 420,572 220,541 641,113 Reinsurance recoverable on claim liabilities - 145,807 145,807 Claim liabilities at end of period $ 420,572 $ 366,348 $ 786,920 * Other Business Segments include the Life Insurance and Property and Casualty segments, as well as intersegment eliminations. Nine months ended September 30, 2019 Managed Care Other Business Segments * Consolidated Claim liabilities at beginning of period $ 394,226 $ 542,563 $ 936,789 Reinsurance recoverable on claim liabilities - (315,543 ) (315,543 ) Net claim liabilities at beginning of period 394,226 227,020 621,246 Claims incurred Current period insured events 1,934,859 85,726 2,020,585 Prior period insured events (29,038 ) (8,254 ) (37,292 ) Total 1,905,821 77,472 1,983,293 Payments of losses and loss-adjustment expenses Current period insured events 1,606,458 41,849 1,648,307 Prior period insured events 303,289 32,145 335,434 Total 1,909,747 73,994 1,983,741 Net claim liabilities at end of period 390,300 230,498 620,798 Reinsurance recoverable on claim liabilities - 181,193 181,193 Claim liabilities at end of period $ 390,300 $ 411,691 $ 801,991 * Other Business Segments include the Life Insurance and Property and Casualty segments, as well as intersegment eliminations. |
Incurred But Not Reported (IBNR) Liabilities Plus Expected Development on Reported Claims Included in the Liability for Unpaid Claims Adjustment Expenses | The following is information about total incurred but not reported (IBNR) liabilities plus expected development on reported claims included in the liability for unpaid claims adjustment expenses for the Managed Care segment as of September 30, 2020. Incurred Year Total of IBNR Liabilities Plus Expected Development on Reported Claims 2019 $ 29,283 2020 322,425 |
Borrowings (Tables)
Borrowings (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Borrowings [Abstract] | |
Summary of Borrowings | A summary of the borrowings entered by the Company are as follows: September 30, 2020 December 31, 2019 Secured loan payable of $11,187, payable in monthly installments of $137 through October 1, 2023, plus interest at a rate reset periodically of 100 basis points over selected LIBOR maturity (which was 1.16% at September 30, 2020). $ 5,037 $ 6,267 Secured loan payable of $20,150, payable in monthly installments of $84 through January 1, 2024, plus interest at a rate reset periodically of 275 basis points over selected LIBOR maturity (which was 3.05% at September 30, 2020). 16,456 17,211 Secured loan payable of $4,116, payable in monthly installments of $49 through January 1, 2024, plus interest at a rate reset periodically of 325 basis points over selected LIBOR maturity (which was 3.55% at September 30, 2020). 1,960 2,401 Secured loan payable of $31,350, payable in monthly installments of $105 through May 1, 2025, plus interest at prime rate (which was 3.22% at September 30, 2020). Last payment of $25,185 due on June 19, 2025. 31,036 - Total borrowings 54,489 25,879 Less: unamortized debt issuance costs 653 185 $ 53,836 $ 25,694 |
Aggregate Maturities of Company's Long Term Borrowings | Aggregate maturities of the Company’s borrowings as of September 30, 2020 are summarized as follows: Remaining of 2020 $ 1,122 2021 4,490 2022 4,490 2023 4,196 2024 14,484 Thereafter 25,707 $ 54,489 |
Pension Plan (Tables)
Pension Plan (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Pension Plan [Abstract] | |
Components of Net Periodic Benefit | The components of net periodic benefit cost were as follows: Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Components of net periodic benefit cost (income): Interest cost $ 1,474 $ 1,748 $ 4,554 $ 5,230 Expected return on assets (2,211 ) (2,209 ) (6,629 ) (6,643 ) Amortization of actuarial loss 396 98 884 277 Settlement loss 356 555 1,068 1,305 Net periodic benefit cost (income) $ 15 $ 192 $ (123 ) $ 169 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Undiscounted Cash Flows of Operating Leases | Undiscounted cash flows of operating leases are summarized as follows: Remaning of 2020 $ 1,062 2021 3,998 2022 3,420 2023 2,329 2024 1,855 Thereafter 3,590 Total lease payments 16,254 Less: imputed interest (2,083 ) Total $ 14,171 |
Lease Cost | At December 31, 2019, operating lease commitments under lessee arrangements were $4,713, $3,790, $3,200, $2,171, $1,710 and $2,707 for 2020 through 2024 and thereafter, respectively. The following presents the lease cost recognized by the Company: Nine months ended September 30, 2020 Operating lease cost $ 3,570 Short-term lease cost 801 Total lease cost $ 4,371 |
Maturity Analysis of Lease Payments to be Received | Also, the Company leases certain floors of one of its buildings and generates rental income. Maturity analysis of lease payments to be received from its lessees as of September 30, 2020, is summarized as follows: Remaining of 2020 $ 473 2021 1,909 2022 1,947 2023 1,986 2024 2,026 Thereafter 2,624 Total $ 10,965 |
Comprehensive Income (Loss) (Ta
Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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: Three months ended Nine months ended September 30, September 30, 2020 2019 2020 2019 Net Unrealized Gain on Securities Beginning Balance $ 85,110 $ 55,678 $ 57,830 $ 27,308 Other comprehensive income before reclassifications 5,149 10,160 31,879 41,473 Amounts reclassified from accumulated other comprehensive (loss) income (406 ) (870 ) 144 (3,813 ) Net current period change 4,743 9,290 32,023 37,660 Ending Balance 89,853 64,968 89,853 64,968 Liability for Pension Benefits Beginning Balance (28,161 ) (24,134 ) (28,467 ) (24,246 ) Amounts reclassified from accumulated other comprehensive income 247 61 553 173 Ending Balance (27,914 ) (24,073 ) (27,914 ) (24,073 ) Accumulated Other Comprehensive Income (Loss) Beginning Balance 56,949 31,544 29,363 3,062 Other comprehensive income before reclassifications 5,149 10,160 31,879 41,473 Amounts reclassified from accumulated other comprehensive (loss) income (159 ) (809 ) 697 (3,640 ) Net current period change 4,990 9,351 32,576 37,833 Ending Balance $ 61,939 $ 40,895 $ 61,939 $ 40,895 |
Net Income Available to Stock_2
Net Income Available to Stockholders and Net Income per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Net Income Available to Stockholders and Net Income per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share: Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Numerator for earnings per share: Net income attributable to TSM available to stockholders $ 23,581 $ 13,948 $ 41,035 $ 79,665 Denominator for basic earnings per share: Weighted average of common shares 23,073,511 23,830,106 23,215,840 23,143,361 Effect of dilutive securities 120,469 63,701 102,229 73,937 Denominator for diluted earnings per share 23,193,980 23,893,807 23,318,069 23,217,298 Basic net income per share attributable to TSM $ 1.02 $ 0.59 $ 1.77 $ 3.44 Diluted net income per share attributable to TSM $ 1.02 $ 0.58 $ 1.76 $ 3.43 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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, 2020 and 2019: Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Operating revenues: Managed Care: Premiums earned, net $ 849,529 $ 746,043 $ 2,447,588 $ 2,244,448 Administrative service fees 3,013 2,607 8,755 7,695 Intersegment premiums/service fees 644 1,483 2,624 4,612 Net investment income 5,065 5,624 14,763 16,981 Total managed care 858,251 755,757 2,473,730 2,273,736 Life Insurance: Premiums earned, net 49,616 45,365 143,325 133,598 Intersegment premiums 516 471 1,552 1,457 Net investment income 6,900 6,709 20,625 20,091 Total life insurance 57,032 52,545 165,502 155,146 Property and Casualty Insurance: Premiums earned, net 23,789 23,613 66,453 64,470 Intersegment premiums 153 153 460 460 Net investment income 2,103 2,533 6,551 7,404 Total property and casualty insurance 26,045 26,299 73,464 72,334 Other segments: * Intersegment service revenues 2,595 2,076 7,637 6,049 Operating revenues from external sources 2,052 3,167 6,394 6,335 Total other segments 4,647 5,243 14,031 12,384 Total business segments 945,975 839,844 2,726,727 2,513,600 TSM operating revenues from external sources 100 310 355 1,138 Elimination of intersegment premiums/service fees (574 ) (2,107 ) (4,636 ) (6,529 ) Elimination of intersegment service revenues (2,595 ) (2,076 ) (7,637 ) (6,049 ) Consolidated operating revenues $ 942,906 $ 835,971 $ 2,714,809 $ 2,502,160 * |
Operating Income (Loss) and Depreciation and Amortization Expense | Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Operating income (loss): Managed care $ 13,006 $ 5,393 $ 56,495 $ 56,805 Life insurance 5,682 6,686 20,188 17,541 Property and casualty insurance 4,386 6,620 10,921 14,958 Other segments * (1,639 ) (690 ) (4,552 ) (1,812 ) Total business segments 21,435 18,009 83,052 87,492 TSM operating revenues from external sources 100 310 355 1,138 TSM unallocated operating expenses (1,633 ) (1,643 ) (4,877 ) (6,812 ) Elimination of TSM intersegment charges 2,403 2,403 7,209 7,209 Consolidated operating income 22,305 19,079 85,739 89,027 Consolidated net realized investment gains (losses) 507 1,087 (180 ) 4,766 Consolidated net unrealized investment gains (losses) on equity investments 11,040 1,267 (17,428 ) 24,259 Consolidated interest expense (2,096 ) (2,062 ) (5,813 ) (5,681 ) Consolidated other income, net 1,811 485 6,217 3,359 Consolidated income before taxes $ 33,567 $ 19,856 $ 68,535 $ 115,730 Depreciation and amortization expense: Managed care $ 2,085 $ 2,931 $ 8,061 $ 8,480 Life insurance 289 268 869 813 Property and casualty insurance 93 86 296 266 Other segments* 240 249 913 627 Total business segments 2,707 3,534 10,139 10,186 TSM depreciation expense 404 150 716 543 Consolidated depreciation and amortization expense $ 3,111 $ 3,684 $ 10,855 $ 10,729 * |
Assets | September 30, 2020 December 31, 2019 Assets: Managed care $ 1,406,356 $ 1,190,538 Life insurance 1,039,765 981,370 Property and casualty insurance 603,728 592,758 Other segments * 30,408 28,346 Total business segments 3,080,257 2,793,012 Unallocated amounts related to TSM: Cash, cash equivalents, and investments 19,881 28,167 Property and equipment, net 67,316 25,623 Other assets 45,927 37,176 133,124 90,966 Elimination entries-intersegment receivables and others (93,094 ) (65,152 ) Consolidated total assets $ 3,120,287 $ 2,818,826 * Includes segments that are not required to be reported separately, primarily the health clinics. |
Significant Accounting Polici_3
Significant Accounting Policies (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |
Health Insurance Providers Fee [Abstract] | |||||||||
HIP fee deferred cost | $ 12,139 | $ 12,139 | $ 0 | ||||||
HIP payments | 55,514 | ||||||||
Accrued HIP fee | 0 | ||||||||
Recently Adopted Accounting Standards [Abstract] | |||||||||
Stockholders' equity | 1,009,687 | 1,009,687 | $ 979,535 | $ 926,150 | 943,172 | $ 948,691 | $ 921,389 | $ 871,158 | $ 821,308 |
Retained Earnings [Member] | |||||||||
Recently Adopted Accounting Standards [Abstract] | |||||||||
Stockholders' equity | 871,067 | 871,067 | $ 847,486 | $ 803,887 | 830,198 | $ 816,969 | $ 827,687 | $ 796,756 | $ 761,970 |
Other Invested Assets [Member] | |||||||||
Investments [Abstract] | |||||||||
Unfunded capital commitments | $ 57,762 | $ 57,762 | |||||||
Remaining average commitments period | 3 years | ||||||||
Other Invested Assets [Member] | Minimum [Member] | |||||||||
Investments [Abstract] | |||||||||
Estimated liquidation period for underlying assets of funds | 5 years | ||||||||
Other Invested Assets [Member] | Maximum [Member] | |||||||||
Investments [Abstract] | |||||||||
Estimated liquidation period for underlying assets of funds | 12 years | ||||||||
ASU 2016-13 [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] | |||||||||
Recently Adopted Accounting Standards [Abstract] | |||||||||
Stockholders' equity | (166) | ||||||||
ASU 2016-13 [Member] | Retained Earnings [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] | |||||||||
Recently Adopted Accounting Standards [Abstract] | |||||||||
Stockholders' equity | $ (166) |
Investment in Securities, Fixed
Investment in Securities, Fixed Maturities Available for Sale (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Fixed maturities available for sale [Abstract] | ||
Amortized cost | $ 1,247,217 | $ 1,173,043 |
Gross unrealized gains | 115,359 | 70,256 |
Gross unrealized losses | (576) | (416) |
Estimated fair value | 1,362,000 | 1,242,883 |
Obligations of Government-sponsored Enterprises [Member] | ||
Fixed maturities available for sale [Abstract] | ||
Amortized cost | 36,762 | 17,209 |
Gross unrealized gains | 784 | 477 |
Gross unrealized losses | (29) | 0 |
Estimated fair value | 37,517 | 17,686 |
U.S. Treasury Securities and Obligations of U.S. Government Instrumentalities [Member] | ||
Fixed maturities available for sale [Abstract] | ||
Amortized cost | 103,483 | 102,230 |
Gross unrealized gains | 8,747 | 4,779 |
Gross unrealized losses | 0 | 0 |
Estimated fair value | 112,230 | 107,009 |
Municipal Securities [Member] | ||
Fixed maturities available for sale [Abstract] | ||
Amortized cost | 628,689 | 595,051 |
Gross unrealized gains | 56,009 | 34,735 |
Gross unrealized losses | (126) | (22) |
Estimated fair value | 684,572 | 629,764 |
Corporate Bonds [Member] | ||
Fixed maturities available for sale [Abstract] | ||
Amortized cost | 195,293 | 187,096 |
Gross unrealized gains | 31,863 | 21,721 |
Gross unrealized losses | 0 | (74) |
Estimated fair value | 227,156 | 208,743 |
Residential Mortgage-backed Securities [Member] | ||
Fixed maturities available for sale [Abstract] | ||
Amortized cost | 263,715 | 262,783 |
Gross unrealized gains | 17,230 | 8,073 |
Gross unrealized losses | (376) | (320) |
Estimated fair value | 280,569 | 270,536 |
Collateralized Mortgage Obligations [Member] | ||
Fixed maturities available for sale [Abstract] | ||
Amortized cost | 19,275 | 8,674 |
Gross unrealized gains | 726 | 471 |
Gross unrealized losses | (45) | 0 |
Estimated fair value | $ 19,956 | $ 9,145 |
Investment in Securities, Fix_2
Investment in Securities, Fixed Maturities Held to Maturity (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Fixed maturities held to maturity [Abstract] | ||
Amortized cost | $ 1,867 | $ 1,860 |
Gross unrealized gains | 223 | 159 |
Gross unrealized losses | 0 | 0 |
Estimated fair value | 2,090 | 2,019 |
U.S. Treasury Securities and Obligations of U.S. Government Instrumentalities [Member] | ||
Fixed maturities held to maturity [Abstract] | ||
Amortized cost | 614 | 615 |
Gross unrealized gains | 217 | 158 |
Gross unrealized losses | 0 | 0 |
Estimated fair value | 831 | 773 |
Residential Mortgage-backed Securities [Member] | ||
Fixed maturities held to maturity [Abstract] | ||
Amortized cost | 165 | 165 |
Gross unrealized gains | 6 | 1 |
Gross unrealized losses | 0 | 0 |
Estimated fair value | 171 | 166 |
Certificates of Deposit [Member] | ||
Fixed maturities held to maturity [Abstract] | ||
Amortized cost | 1,088 | 1,080 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 0 | 0 |
Estimated fair value | $ 1,088 | $ 1,080 |
Investment in Securities, Other
Investment in Securities, Other Invested Assets - Alternative Investments (Details) - Other Invested Assets - Alternative investments [Member] - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Other invested assets - Alternative investments [Abstract] | ||
Amortized cost | $ 110,532 | $ 97,575 |
Gross unrealized gains | 3,795 | 3,721 |
Gross unrealized losses | (3,562) | (788) |
Estimated fair value | $ 110,765 | $ 100,508 |
Investment in Securities, Secur
Investment in Securities, Securities in Continuous Unrealized Loss Position (Details) $ in Thousands | Sep. 30, 2020USD ($)Security | Dec. 31, 2019USD ($)Security |
Fixed maturities available for sale, estimated fair value [Abstract] | ||
Less than 12 months | $ 62,741 | $ 95,605 |
12 months or longer | 0 | 0 |
Total | 62,741 | 95,605 |
Fixed maturities available for sale, gross unrealized loss [Abstract] | ||
Less than 12 months | (576) | (416) |
12 months or longer | 0 | 0 |
Total | $ (576) | $ (416) |
Fixed maturities available for sale, number of securities [Abstract] | ||
Less than 12 months | Security | 15 | 20 |
12 months or longer | Security | 0 | 0 |
Total | Security | 15 | 20 |
Obligations of Government-sponsored Enterprises [Member] | ||
Fixed maturities available for sale, estimated fair value [Abstract] | ||
Less than 12 months | $ 9,511 | |
12 months or longer | 0 | |
Total | 9,511 | |
Fixed maturities available for sale, gross unrealized loss [Abstract] | ||
Less than 12 months | (29) | |
12 months or longer | 0 | |
Total | $ (29) | |
Fixed maturities available for sale, number of securities [Abstract] | ||
Less than 12 months | Security | 1 | |
12 months or longer | Security | 0 | |
Total | Security | 1 | |
Municipal Securities [Member] | ||
Fixed maturities available for sale, estimated fair value [Abstract] | ||
Less than 12 months | $ 21,832 | $ 10,656 |
12 months or longer | 0 | 0 |
Total | 21,832 | 10,656 |
Fixed maturities available for sale, gross unrealized loss [Abstract] | ||
Less than 12 months | (126) | (22) |
12 months or longer | 0 | 0 |
Total | $ (126) | $ (22) |
Fixed maturities available for sale, number of securities [Abstract] | ||
Less than 12 months | Security | 4 | 3 |
12 months or longer | Security | 0 | 0 |
Total | Security | 4 | 3 |
Corporate Bonds [Member] | ||
Fixed maturities available for sale, estimated fair value [Abstract] | ||
Less than 12 months | $ 5,047 | |
12 months or longer | 0 | |
Total | 5,047 | |
Fixed maturities available for sale, gross unrealized loss [Abstract] | ||
Less than 12 months | (74) | |
12 months or longer | 0 | |
Total | $ (74) | |
Fixed maturities available for sale, number of securities [Abstract] | ||
Less than 12 months | Security | 1 | |
12 months or longer | Security | 0 | |
Total | Security | 1 | |
Residential Mortgage-backed Securities [Member] | ||
Fixed maturities available for sale, estimated fair value [Abstract] | ||
Less than 12 months | $ 22,551 | $ 79,902 |
12 months or longer | 0 | 0 |
Total | 22,551 | 79,902 |
Fixed maturities available for sale, gross unrealized loss [Abstract] | ||
Less than 12 months | (376) | (320) |
12 months or longer | 0 | 0 |
Total | $ (376) | $ (320) |
Fixed maturities available for sale, number of securities [Abstract] | ||
Less than 12 months | Security | 8 | 16 |
12 months or longer | Security | 0 | 0 |
Total | Security | 8 | 16 |
Collateralized Mortgage Obligations [Member] | ||
Fixed maturities available for sale, estimated fair value [Abstract] | ||
Less than 12 months | $ 8,847 | |
12 months or longer | 0 | |
Total | 8,847 | |
Fixed maturities available for sale, gross unrealized loss [Abstract] | ||
Less than 12 months | (45) | |
12 months or longer | 0 | |
Total | $ (45) | |
Fixed maturities available for sale, number of securities [Abstract] | ||
Less than 12 months | Security | 2 | |
12 months or longer | Security | 0 | |
Total | Security | 2 | |
Other Invested Assets - Alternative investments [Member] | ||
Alternative investments, estimated fair value [Abstract] | ||
Less than 12 months | $ 12,873 | $ 24,437 |
12 months or longer | 16,308 | 10,580 |
Total | 29,181 | 35,017 |
Alternative investments, gross unrealized loss [Abstract] | ||
Less than 12 months | (1,933) | (605) |
12 months or longer | (1,629) | (183) |
Total | $ (3,562) | $ (788) |
Alternative investments, number of securities [Abstract] | ||
Less than 12 months | Security | 4 | 8 |
12 months or longer | Security | 6 | 1 |
Total | Security | 10 | 9 |
Investment in Securities, Matur
Investment in Securities, Maturities of Investment Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Fixed maturities available for sale, amortized cost [Abstract] | ||
Due in one year or less | $ 33,764 | |
Due after one year through five years | 564,825 | |
Due after five years through ten years | 204,234 | |
Due after ten years | 161,404 | |
Amortized cost | 1,247,217 | $ 1,173,043 |
Fixed maturities available for sale, estimated fair value [Abstract] | ||
Due in one year or less | 34,244 | |
Due after one year through five | 610,357 | |
Due after five years through ten years | 220,251 | |
Due after ten years | 196,623 | |
Estimated fair value | 1,362,000 | 1,242,883 |
Fixed maturities held to maturity, amortized cost [Abstract] | ||
Due in one year or less | 1,088 | |
Due after ten years | 614 | |
Amortized cost | 1,867 | 1,860 |
Fixed maturities held to maturity, estimated fair value [Abstract] | ||
Due in one year or less | 1,088 | |
Due after ten years | 831 | |
Estimated fair value | 2,090 | 2,019 |
Federal Home Loan Bank of New York [Member] | ||
Fixed maturities held to maturity, estimated fair value [Abstract] | ||
Amortized cost of investments pledged to secure short term borrowings | 232,818 | 145,981 |
Fair value of investments pledged to secure short term borrowings | 252,601 | 152,916 |
Residential Mortgage-backed Securities [Member] | ||
Fixed maturities available for sale, amortized cost [Abstract] | ||
Without single maturity date | 263,715 | |
Amortized cost | 263,715 | 262,783 |
Fixed maturities available for sale, estimated fair value [Abstract] | ||
Without single maturity date | 280,569 | |
Estimated fair value | 280,569 | 270,536 |
Fixed maturities held to maturity, amortized cost [Abstract] | ||
Without single maturity date | 165 | |
Amortized cost | 165 | 165 |
Fixed maturities held to maturity, estimated fair value [Abstract] | ||
Without single maturity date | 171 | |
Estimated fair value | 171 | 166 |
Collateralized Mortgage Obligations [Member] | ||
Fixed maturities available for sale, amortized cost [Abstract] | ||
Without single maturity date | 19,275 | |
Amortized cost | 19,275 | 8,674 |
Fixed maturities available for sale, estimated fair value [Abstract] | ||
Without single maturity date | 19,956 | |
Estimated fair value | $ 19,956 | $ 9,145 |
Realized and Unrealized Gains_3
Realized and Unrealized Gains (Losses) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020USD ($)Investment | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)Investment | Sep. 30, 2019USD ($) | Dec. 31, 2019Investment | |
Fixed maturity securities, available for sale [Abstract] | |||||
Gross gains | $ 402 | $ 950 | $ 1,953 | $ 3,597 | |
Gross losses | (1) | 0 | (7) | (319) | |
Total fixed securities | 401 | 950 | 1,946 | 3,278 | |
Equity investments [Abstract] | |||||
Gross gains | 67 | 401 | 1,057 | 2,532 | |
Gross losses | (479) | (443) | (3,249) | (1,488) | |
Gross losses from impaired securities | 0 | 0 | (678) | 0 | |
Total equity investments | (412) | (42) | (2,870) | 1,044 | |
Other invested assets [Abstract] | |||||
Gross gains | 518 | 179 | 744 | 500 | |
Gross losses | 0 | 0 | 0 | (56) | |
Total other invested assets | 518 | 179 | 744 | 444 | |
Net realized investment gains (losses) | 507 | 1,087 | (180) | 4,766 | |
Recognized in accumulated other comprehensive income (loss) [Abstract] | |||||
Net unrealized gains (losses) | 6,203 | 12,230 | 42,243 | 49,453 | |
Not recognized in the consolidated financial statements [Abstract] | |||||
Fixed maturities - held to maturity | (6) | 14 | 64 | 50 | |
Deferred tax liability on unrealized gains | $ 8,446 | 9,892 | $ 8,446 | 9,892 | |
Number of individual investment in securities exceeding 10% of stockholders' equity | Investment | 0 | 0 | 0 | ||
Fixed Maturities - Available for Sale [Member] | |||||
Recognized in accumulated other comprehensive income (loss) [Abstract] | |||||
Net unrealized gains (losses) | $ 4,705 | 11,544 | $ 44,943 | 48,095 | |
Other Invested Assets [Member] | |||||
Recognized in accumulated other comprehensive income (loss) [Abstract] | |||||
Net unrealized gains (losses) | $ 1,498 | $ 686 | $ (2,700) | $ 1,358 |
Premiums and Other Receivable_3
Premiums and Other Receivables, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Premiums and other receivables, net [Abstract] | ||
Premium | $ 135,133 | $ 188,861 |
Self-funded group receivables | 26,310 | 28,672 |
FEHBP | 14,499 | 13,894 |
Agent balances | 34,224 | 30,784 |
Accrued interest | 9,753 | 11,307 |
Reinsurance recoverable | 222,966 | 239,767 |
Other | 153,839 | 110,952 |
Premiums and other receivables, total | 596,724 | 624,237 |
Less allowance for doubtful receivables [Abstract] | ||
Premium | 37,489 | 36,622 |
Other | 12,276 | 19,923 |
Premiums and other receivables, allowance | 49,765 | 56,545 |
Total premium and other receivables, net | 546,959 | 567,692 |
Government of Puerto Rico [Member] | ||
Premiums and other receivables, net [Abstract] | ||
Premiums and other receivables, total | 71,322 | 49,176 |
Less allowance for doubtful receivables [Abstract] | ||
Premiums and other receivables, allowance | $ 24,268 | $ 22,091 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) $ in Thousands | Sep. 30, 2020USD ($) | Jun. 19, 2020Story | Dec. 31, 2019USD ($) |
Components of Property and Equipment, Net [Abstract] | |||
Property and equipment, gross | $ 309,295 | $ 266,289 | |
Less accumulated depreciation and amortization | 179,075 | 177,701 | |
Property and equipment, net | 130,220 | 88,588 | |
Number of stories office building acquired | Story | 9 | ||
Land [Member] | |||
Components of Property and Equipment, Net [Abstract] | |||
Property and equipment, gross | 15,867 | 10,976 | |
Buildings and Leasehold Improvements [Member] | |||
Components of Property and Equipment, Net [Abstract] | |||
Property and equipment, gross | 125,239 | 92,752 | |
Office Furniture and Equipment [Member] | |||
Components of Property and Equipment, Net [Abstract] | |||
Property and equipment, gross | 32,062 | 27,878 | |
Computer Equipment and Software [Member] | |||
Components of Property and Equipment, Net [Abstract] | |||
Property and equipment, gross | 135,456 | 133,922 | |
Automobiles [Member] | |||
Components of Property and Equipment, Net [Abstract] | |||
Property and equipment, gross | $ 671 | $ 761 |
Fair Value Measurements, Fair V
Fair Value Measurements, Fair Value Measurements by Level for Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Fair value measurements by level for assets measured at fair value on a recurring basis [Abstract] | ||
Fixed maturity securities available for sale | $ 1,362,000 | $ 1,242,883 |
Equity investments | 389,078 | 287,525 |
Obligations of Government-sponsored Enterprises [Member] | ||
Fair value measurements by level for assets measured at fair value on a recurring basis [Abstract] | ||
Fixed maturity securities available for sale | 37,517 | 17,686 |
U.S. Treasury Securities and Obligations of U.S. Government Instrumentalities [Member] | ||
Fair value measurements by level for assets measured at fair value on a recurring basis [Abstract] | ||
Fixed maturity securities available for sale | 112,230 | 107,009 |
Municipal Securities [Member] | ||
Fair value measurements by level for assets measured at fair value on a recurring basis [Abstract] | ||
Fixed maturity securities available for sale | 684,572 | 629,764 |
Corporate Bonds [Member] | ||
Fair value measurements by level for assets measured at fair value on a recurring basis [Abstract] | ||
Fixed maturity securities available for sale | 227,156 | 208,743 |
Residential Agency Mortgage-backed Securities [Member] | ||
Fair value measurements by level for assets measured at fair value on a recurring basis [Abstract] | ||
Fixed maturity securities available for sale | 280,569 | 270,536 |
Collateralized Mortgage Obligations [Member] | ||
Fair value measurements by level for assets measured at fair value on a recurring basis [Abstract] | ||
Fixed maturity securities available for sale | 19,956 | 9,145 |
Fair Value, Measurements, Recurring [Member] | ||
Fair value measurements by level for assets measured at fair value on a recurring basis [Abstract] | ||
Fixed maturity securities available for sale | 1,362,000 | 1,242,883 |
Equity investments | 389,078 | 287,525 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | ||
Fair value measurements by level for assets measured at fair value on a recurring basis [Abstract] | ||
Fixed maturity securities available for sale | 112,230 | 107,009 |
Equity investments | 197,864 | 177,136 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | ||
Fair value measurements by level for assets measured at fair value on a recurring basis [Abstract] | ||
Fixed maturity securities available for sale | 1,249,770 | 1,135,874 |
Equity investments | 186,048 | 105,180 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | ||
Fair value measurements by level for assets measured at fair value on a recurring basis [Abstract] | ||
Fixed maturity securities available for sale | 0 | 0 |
Equity investments | 5,166 | 5,209 |
Fair Value, Measurements, Recurring [Member] | Obligations of Government-sponsored Enterprises [Member] | ||
Fair value measurements by level for assets measured at fair value on a recurring basis [Abstract] | ||
Fixed maturity securities available for sale | 37,517 | 17,686 |
Fair Value, Measurements, Recurring [Member] | Obligations of Government-sponsored Enterprises [Member] | Level 1 [Member] | ||
Fair value measurements by level for assets measured at fair value on a recurring basis [Abstract] | ||
Fixed maturity securities available for sale | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Obligations of Government-sponsored Enterprises [Member] | Level 2 [Member] | ||
Fair value measurements by level for assets measured at fair value on a recurring basis [Abstract] | ||
Fixed maturity securities available for sale | 37,517 | 17,686 |
Fair Value, Measurements, Recurring [Member] | Obligations of Government-sponsored Enterprises [Member] | Level 3 [Member] | ||
Fair value measurements by level for assets measured at fair value on a recurring basis [Abstract] | ||
Fixed maturity securities available for sale | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | U.S. Treasury Securities and Obligations of U.S. Government Instrumentalities [Member] | ||
Fair value measurements by level for assets measured at fair value on a recurring basis [Abstract] | ||
Fixed maturity securities available for sale | 112,230 | 107,009 |
Fair Value, Measurements, Recurring [Member] | U.S. Treasury Securities and Obligations of U.S. Government Instrumentalities [Member] | Level 1 [Member] | ||
Fair value measurements by level for assets measured at fair value on a recurring basis [Abstract] | ||
Fixed maturity securities available for sale | 112,230 | 107,009 |
Fair Value, Measurements, Recurring [Member] | U.S. Treasury Securities and Obligations of U.S. Government Instrumentalities [Member] | Level 2 [Member] | ||
Fair value measurements by level for assets measured at fair value on a recurring basis [Abstract] | ||
Fixed maturity securities available for sale | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | U.S. Treasury Securities and Obligations of U.S. Government Instrumentalities [Member] | Level 3 [Member] | ||
Fair value measurements by level for assets measured at fair value on a recurring basis [Abstract] | ||
Fixed maturity securities available for sale | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Municipal Securities [Member] | ||
Fair value measurements by level for assets measured at fair value on a recurring basis [Abstract] | ||
Fixed maturity securities available for sale | 684,572 | 629,764 |
Fair Value, Measurements, Recurring [Member] | Municipal Securities [Member] | Level 1 [Member] | ||
Fair value measurements by level for assets measured at fair value on a recurring basis [Abstract] | ||
Fixed maturity securities available for sale | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Municipal Securities [Member] | Level 2 [Member] | ||
Fair value measurements by level for assets measured at fair value on a recurring basis [Abstract] | ||
Fixed maturity securities available for sale | 684,572 | 629,764 |
Fair Value, Measurements, Recurring [Member] | Municipal Securities [Member] | Level 3 [Member] | ||
Fair value measurements by level for assets measured at fair value on a recurring basis [Abstract] | ||
Fixed maturity securities available for sale | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Corporate Bonds [Member] | ||
Fair value measurements by level for assets measured at fair value on a recurring basis [Abstract] | ||
Fixed maturity securities available for sale | 227,156 | 208,743 |
Fair Value, Measurements, Recurring [Member] | Corporate Bonds [Member] | Level 1 [Member] | ||
Fair value measurements by level for assets measured at fair value on a recurring basis [Abstract] | ||
Fixed maturity securities available for sale | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Corporate Bonds [Member] | Level 2 [Member] | ||
Fair value measurements by level for assets measured at fair value on a recurring basis [Abstract] | ||
Fixed maturity securities available for sale | 227,156 | 208,743 |
Fair Value, Measurements, Recurring [Member] | Corporate Bonds [Member] | Level 3 [Member] | ||
Fair value measurements by level for assets measured at fair value on a recurring basis [Abstract] | ||
Fixed maturity securities available for sale | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Residential Agency Mortgage-backed Securities [Member] | ||
Fair value measurements by level for assets measured at fair value on a recurring basis [Abstract] | ||
Fixed maturity securities available for sale | 280,569 | 270,536 |
Fair Value, Measurements, Recurring [Member] | Residential Agency Mortgage-backed Securities [Member] | Level 1 [Member] | ||
Fair value measurements by level for assets measured at fair value on a recurring basis [Abstract] | ||
Fixed maturity securities available for sale | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Residential Agency Mortgage-backed Securities [Member] | Level 2 [Member] | ||
Fair value measurements by level for assets measured at fair value on a recurring basis [Abstract] | ||
Fixed maturity securities available for sale | 280,569 | 270,536 |
Fair Value, Measurements, Recurring [Member] | Residential Agency Mortgage-backed Securities [Member] | Level 3 [Member] | ||
Fair value measurements by level for assets measured at fair value on a recurring basis [Abstract] | ||
Fixed maturity securities available for sale | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Collateralized Mortgage Obligations [Member] | ||
Fair value measurements by level for assets measured at fair value on a recurring basis [Abstract] | ||
Fixed maturity securities available for sale | 19,956 | 9,145 |
Fair Value, Measurements, Recurring [Member] | Collateralized Mortgage Obligations [Member] | Level 1 [Member] | ||
Fair value measurements by level for assets measured at fair value on a recurring basis [Abstract] | ||
Fixed maturity securities available for sale | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Collateralized Mortgage Obligations [Member] | Level 2 [Member] | ||
Fair value measurements by level for assets measured at fair value on a recurring basis [Abstract] | ||
Fixed maturity securities available for sale | 19,956 | 9,145 |
Fair Value, Measurements, Recurring [Member] | Collateralized Mortgage Obligations [Member] | Level 3 [Member] | ||
Fair value measurements by level for assets measured at fair value on a recurring basis [Abstract] | ||
Fixed maturity securities available for sale | $ 0 | $ 0 |
Fair Value Measurements, Reconc
Fair Value Measurements, Reconciliation of Assets Measured at Fair Value Using Significant Unobservable Inputs (Level 3) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | |
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 | 5,237 | 5,209 | |
Unrealized in other accumulated comprehensive income | (71) | (43) | |
Ending Balance | $ 5,166 | $ 5,166 |
Claim Liabilities, Reconciliati
Claim Liabilities, Reconciliation of Beginning and Ending Balances of Claim Liabilities (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | ||
Reconciliation of beginning and ending balances of claim liabilities [Roll Forward] | |||
Claim liabilities at beginning of period | $ 709,258 | $ 936,789 | |
Reinsurance recoverable on claim liabilities | (137,017) | (315,543) | |
Net claim liabilities at beginning of period | 572,241 | 621,246 | |
Claims incurred [Abstract] | |||
Current period insured events | 2,085,183 | 2,020,585 | |
Prior period insured events | 16,412 | (37,292) | |
Total | 2,101,595 | 1,983,293 | |
Payments of losses and loss-adjustment expenses [Abstract] | |||
Current period insured events | 1,724,215 | 1,648,307 | |
Prior period insured events | 308,508 | 335,434 | |
Total | 2,032,723 | 1,983,741 | |
Net claim liabilities at end of period | 641,113 | 620,798 | |
Reinsurance recoverable on claim liabilities | 145,807 | 181,193 | |
Claim liabilities at end of period | 786,920 | 801,991 | |
Change in liability for future policy (benefits) expense | 27,806 | 26,211 | |
Other Business Segments [Member] | |||
Reconciliation of beginning and ending balances of claim liabilities [Roll Forward] | |||
Claim liabilities at beginning of period | [1] | 367,981 | 542,563 |
Reinsurance recoverable on claim liabilities | [1] | (137,017) | (315,543) |
Net claim liabilities at beginning of period | [1] | 230,964 | 227,020 |
Claims incurred [Abstract] | |||
Current period insured events | [1] | 84,358 | 85,726 |
Prior period insured events | [1] | (7,885) | (8,254) |
Total | [1] | 76,473 | 77,472 |
Payments of losses and loss-adjustment expenses [Abstract] | |||
Current period insured events | [1] | 45,815 | 41,849 |
Prior period insured events | [1] | 41,081 | 32,145 |
Total | [1] | 86,896 | 73,994 |
Net claim liabilities at end of period | [1] | 220,541 | 230,498 |
Reinsurance recoverable on claim liabilities | [1] | 145,807 | 181,193 |
Claim liabilities at end of period | [1] | 366,348 | 411,691 |
Managed Care [Member] | |||
Reconciliation of beginning and ending balances of claim liabilities [Roll Forward] | |||
Claim liabilities at beginning of period | 341,277 | 394,226 | |
Reinsurance recoverable on claim liabilities | 0 | ||
Net claim liabilities at beginning of period | 341,277 | 394,226 | |
Claims incurred [Abstract] | |||
Current period insured events | 2,000,825 | 1,934,859 | |
Prior period insured events | 24,297 | (29,038) | |
Total | 2,025,122 | 1,905,821 | |
Payments of losses and loss-adjustment expenses [Abstract] | |||
Current period insured events | 1,678,400 | 1,606,458 | |
Prior period insured events | 267,427 | 303,289 | |
Total | 1,945,827 | 1,909,747 | |
Net claim liabilities at end of period | 420,572 | 390,300 | |
Reinsurance recoverable on claim liabilities | 0 | 0 | |
Claim liabilities at end of period | $ 420,572 | $ 390,300 | |
[1] | * Other Business Segments include the Life Insurance and Property and Casualty segments, as well as intersegment eliminations. |
Claim Liabilities, Incurred But
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 | Sep. 30, 2020USD ($) |
Incurred Year 2019 [Member] | |
Insurance Claims Development, Net of Reinsurance [Abstract] | |
Total of IBNR liabilities plus expected development on reported claims | $ 29,283 |
Incurred Year 2020 [Member] | |
Insurance Claims Development, Net of Reinsurance [Abstract] | |
Total of IBNR liabilities plus expected development on reported claims | $ 322,425 |
Borrowings (Details)
Borrowings (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Summary of long-term borrowings [Abstract] | ||
Total borrowings | $ 54,489 | $ 25,879 |
Less: unamortized debt issuance costs | 653 | 185 |
Long-term borrowings | 53,836 | 25,694 |
Aggregate maturities of Company's long term borrowings [Abstract] | ||
Remaining of 2020 | 1,122 | |
2021 | 4,490 | |
2022 | 4,490 | |
2023 | 4,196 | |
2024 | 14,484 | |
Thereafter | 25,707 | |
Total borrowings | 54,489 | 25,879 |
Outstanding balance | $ 82,500 | $ 54,000 |
Average interest rate of outstanding balance | 0.34% | 1.79% |
TSS [Member] | ||
Aggregate maturities of Company's long term borrowings [Abstract] | ||
Borrowing capacity of admitted assets percentage | 30.00% | |
Maximum borrowing capacity | $ 119,329 | $ 82,200 |
Outstanding balance | $ 62,500 | 25,000 |
TSV [Member] | ||
Aggregate maturities of Company's long term borrowings [Abstract] | ||
Borrowing capacity of admitted assets percentage | 30.00% | |
Maximum borrowing capacity | $ 87,940 | 48,900 |
Outstanding balance | 20,000 | 29,000 |
Secured Debt [Member] | Term Loan A [Member] | ||
Summary of long-term borrowings [Abstract] | ||
Total borrowings | 5,037 | 6,267 |
Debt instrument, principal amount | $ 11,187 | |
Debt instrument, maturity date | Oct. 1, 2023 | |
Debt instrument, monthly installment payment | $ 137 | |
Basis spread on variable rate | 1.00% | |
Debt instrument, variable interest rate | 1.16% | |
Aggregate maturities of Company's long term borrowings [Abstract] | ||
Total borrowings | $ 5,037 | 6,267 |
Secured Debt [Member] | Term Loan B [Member] | ||
Summary of long-term borrowings [Abstract] | ||
Total borrowings | 16,456 | 17,211 |
Debt instrument, principal amount | $ 20,150 | |
Debt instrument, maturity date | Jan. 1, 2024 | |
Debt instrument, monthly installment payment | $ 84 | |
Basis spread on variable rate | 2.75% | |
Debt instrument, variable interest rate | 3.05% | |
Aggregate maturities of Company's long term borrowings [Abstract] | ||
Total borrowings | $ 16,456 | 17,211 |
Secured Debt [Member] | Term Loan C [Member] | ||
Summary of long-term borrowings [Abstract] | ||
Total borrowings | 1,960 | 2,401 |
Debt instrument, principal amount | $ 4,116 | |
Debt instrument, maturity date | Jan. 1, 2024 | |
Debt instrument, monthly installment payment | $ 49 | |
Basis spread on variable rate | 3.25% | |
Debt instrument, variable interest rate | 3.55% | |
Aggregate maturities of Company's long term borrowings [Abstract] | ||
Total borrowings | $ 1,960 | 2,401 |
Secured Debt [Member] | Term Loan D [Member] | ||
Summary of long-term borrowings [Abstract] | ||
Total borrowings | 31,036 | 0 |
Debt instrument, principal amount | $ 31,350 | |
Debt instrument, maturity date | May 1, 2025 | |
Debt instrument, monthly installment payment | $ 105 | |
Debt instrument, variable interest rate | 3.22% | |
Debt instrument, last payment | $ 25,185 | |
Debt Instrument, last payment maturity date | Jun. 19, 2025 | |
Aggregate maturities of Company's long term borrowings [Abstract] | ||
Total borrowings | $ 31,036 | $ 0 |
Commercial Bank in Puerto Rico [Member] | First Year [Member] | ||
Aggregate maturities of Company's long term borrowings [Abstract] | ||
Prepayment penalty fee percentage | 3.00% | |
Commercial Bank in Puerto Rico [Member] | Second Year [Member] | ||
Aggregate maturities of Company's long term borrowings [Abstract] | ||
Prepayment penalty fee percentage | 2.00% | |
Commercial Bank in Puerto Rico [Member] | Third Year [Member] | ||
Aggregate maturities of Company's long term borrowings [Abstract] | ||
Prepayment penalty fee percentage | 1.00% | |
Commercial Bank in Puerto Rico [Member] | TSA [Member] | ||
Aggregate maturities of Company's long term borrowings [Abstract] | ||
Maximum borrowing capacity | $ 10,000 | |
Outstanding balance | $ 0 | |
Expiration date | Jun. 30, 2021 | |
Commercial Bank in Puerto Rico [Member] | TSA [Member] | LIBOR [Member] | ||
Summary of long-term borrowings [Abstract] | ||
Basis spread on variable rate | 2.50% | |
Aggregate maturities of Company's long term borrowings [Abstract] | ||
Variable rate, term | 30 days |
Pension Plan (Details)
Pension Plan (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Components of net periodic benefit cost [Abstract] | |||||
Interest cost | $ 1,474 | $ 1,748 | $ 4,554 | $ 5,230 | |
Expected return on assets | (2,211) | (2,209) | (6,629) | (6,643) | |
Amortization of actuarial loss | 396 | 98 | 884 | 277 | |
Settlement loss | 356 | 555 | 1,068 | 1,305 | |
Net periodic benefit cost (income) | $ 15 | $ 192 | (123) | $ 169 | |
Expected employer future contributions | $ 2,000 | ||||
Employer contribution | $ 10,000 |
Stock Repurchase Programs (Deta
Stock Repurchase Programs (Details) - 2017 $30,000 Stock Repurchase Program [Member] - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Oct. 31, 2019 | Feb. 28, 2018 | Aug. 31, 2017 | |
Stock Repurchase Programs [Abstract] | |||||||
Shares repurchased (in shares) | 0 | 0 | 952,820 | 0 | |||
Average share price (in dollars per share) | $ 15.72 | ||||||
Amount repurchases | $ 14,982 | ||||||
Class B Common Stock [Member] | |||||||
Stock Repurchase Programs [Abstract] | |||||||
Stock repurchase program, authorized amount | $ 25,000 | $ 25,000 | $ 30,000 |
Reinsurance (Details)
Reinsurance (Details) - TSP [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Reinsurance Activity [Abstract] | ||||
Ceded premiums written | $ 14,920 | $ 12,355 | $ 45,637 | $ 36,028 |
Ceded incurred loss adjustment expenses | $ 5,419 | $ 1,089 | 45,802 | $ 6,531 |
Claims ceded | 40,000 | |||
Casualty Excess of Loss Treaty [Member] | Minimum [Member] | ||||
Reinsurance Activity [Abstract] | ||||
Amount of claim covered, per person | 225 | |||
Casualty Excess of Loss Treaty [Member] | Maximum [Member] | ||||
Reinsurance Activity [Abstract] | ||||
Amount of claim covered, per person | 20,000 | |||
Medical Malpractice Excess of Loss [Member] | Minimum [Member] | ||||
Reinsurance Activity [Abstract] | ||||
Amount of claim covered, per person | 150 | |||
Medical Malpractice Excess of Loss [Member] | Maximum [Member] | ||||
Reinsurance Activity [Abstract] | ||||
Amount of claim covered, per person | 3,000 | |||
Property Reinsurance Treaty [Member] | Minimum [Member] | ||||
Reinsurance Activity [Abstract] | ||||
Amount of claim covered, per person | 400 | |||
Property Reinsurance Treaty [Member] | Maximum [Member] | ||||
Reinsurance Activity [Abstract] | ||||
Amount of claim covered, per person | 30,000 | |||
Catastrophe [Member] | ||||
Reinsurance Activity [Abstract] | ||||
Maximum amount of claim to be covered per person | 814,000 | |||
Catastrophe [Member] | Minimum [Member] | ||||
Reinsurance Activity [Abstract] | ||||
Amount of claim covered, per person | 5,000 | |||
Catastrophe [Member] | Maximum [Member] | ||||
Reinsurance Activity [Abstract] | ||||
Amount of claim covered, per person | $ 809,000 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Operating Lease [Abstract] | ||
us-gaap_OtherAssets | us-gaap:OperatingLeaseRightOfUseAssetStatementOfFinancialPositionExtensibleList | |
us-gaap_AccountsPayableAndAccruedLiabilitiesCurrentAndNoncurrent | us-gaap:OperatingLeaseLiabilityStatementOfFinancialPositionExtensibleList | |
Right-of-use asset | $ 13,929 | $ 10,438 |
Lease liabilities | $ 14,171 | $ 10,586 |
Weighted-average remaining lease term | 5 years 10 months 24 days | |
Weighted-average discount rate of operating leases | 5.20% | |
Minimum [Member] | ||
Operating Lease [Abstract] | ||
Remaining lease term | 2 months 12 days | |
Maximum [Member] | ||
Operating Lease [Abstract] | ||
Remaining lease term | 14 years 2 months 12 days |
Leases, Undiscounted Cash Flows
Leases, Undiscounted Cash Flows of Operating Leases (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Undiscounted Cash Flows of Operating Leases [Abstract] | ||
Remaining of 2020 | $ 1,062 | |
2021 | 3,998 | $ 4,713 |
2022 | 3,420 | 3,790 |
2023 | 2,329 | 3,200 |
2024 | 1,855 | 2,171 |
Thereafter | 3,590 | |
Total lease payments | 16,254 | |
Less: imputed interest | (2,083) | |
Total | $ 14,171 | $ 10,586 |
Leases, Operating Lease Commitm
Leases, Operating Lease Commitments and Lease Cost (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Operating Lease Commitments under Lessee Arrangements [Abstract] | ||
2020 | $ 3,998 | $ 4,713 |
2021 | 3,420 | 3,790 |
2022 | 2,329 | 3,200 |
2023 | 1,855 | 2,171 |
2024 | 1,710 | |
Thereafter | $ 2,707 | |
Lease Cost [Abstract] | ||
Operating lease cost | 3,570 | |
Short-term lease cost | 801 | |
Total lease cost | $ 4,371 |
Leases, Maturity Analysis of Le
Leases, Maturity Analysis of Lease Payments to be Received (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Maturity Analysis of Lease Payments to be Received [Abstract] | |
Remaining of 2020 | $ 473 |
2021 | 1,909 |
2022 | 1,947 |
2023 | 1,986 |
2024 | 2,026 |
Thereafter | 2,624 |
Total | $ 10,965 |
Comprehensive Income (Loss) (De
Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Accumulated balances for each classification of other comprehensive income, net of tax [Roll Forward] | ||||
Balance | $ 979,535 | $ 921,389 | $ 943,172 | $ 821,308 |
Total other comprehensive income, net of tax | 4,990 | 9,351 | 32,576 | 37,833 |
Balance | 1,009,687 | 948,691 | 1,009,687 | 948,691 |
Net Unrealized Gain on Securities [Member] | ||||
Accumulated balances for each classification of other comprehensive income, net of tax [Roll Forward] | ||||
Balance | 85,110 | 55,678 | 57,830 | 27,308 |
Other comprehensive income before reclassifications | 5,149 | 10,160 | 31,879 | 41,473 |
Amounts reclassified from accumulated other comprehensive (loss) income | (406) | (870) | 144 | (3,813) |
Total other comprehensive income, net of tax | 4,743 | 9,290 | 32,023 | 37,660 |
Balance | 89,853 | 64,968 | 89,853 | 64,968 |
Liability for Pension Benefits [Member] | ||||
Accumulated balances for each classification of other comprehensive income, net of tax [Roll Forward] | ||||
Balance | (28,161) | (24,134) | (28,467) | (24,246) |
Amounts reclassified from accumulated other comprehensive (loss) income | 247 | 61 | 553 | 173 |
Balance | (27,914) | (24,073) | (27,914) | (24,073) |
Accumulated Other Comprehensive Income (Loss) [Member] | ||||
Accumulated balances for each classification of other comprehensive income, net of tax [Roll Forward] | ||||
Balance | 56,949 | 31,544 | 29,363 | 3,062 |
Other comprehensive income before reclassifications | 5,149 | 10,160 | 31,879 | 41,473 |
Amounts reclassified from accumulated other comprehensive (loss) income | (159) | (809) | 697 | (3,640) |
Total other comprehensive income, net of tax | 4,990 | 9,351 | 32,576 | 37,833 |
Balance | $ 61,939 | $ 40,895 | $ 61,939 | $ 40,895 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share-Based Compensation [Abstract] | ||||
Share-based compensation expense | $ 1,849 | $ 2,817 | $ 8,443 | $ 8,723 |
Shares repurchased and retired as a result of non-cash tax withholdings upon vesting of shares (in shares) | 14,040 | 0 | 20,922 | 602 |
Net Income Available to Stock_3
Net Income Available to Stockholders and Net Income per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Numerator for earnings per share [Abstract] | ||||
Net income attributable to TSM available to stockholders | $ 23,581 | $ 13,948 | $ 41,035 | $ 79,665 |
Denominator for basic earnings per share [Abstract] | ||||
Weighted average of common shares (in shares) | 23,073,511 | 23,830,106 | 23,215,840 | 23,143,361 |
Effect of dilutive securities (in shares) | 120,469 | 63,701 | 102,229 | 73,937 |
Denominator for diluted earnings per share (in shares) | 23,193,980 | 23,893,807 | 23,318,069 | 23,217,298 |
Basic net income per share attributable to TSM (in dollars per share) | $ 1.02 | $ 0.59 | $ 1.77 | $ 3.44 |
Diluted net income per share attributable to TSM (in dollars per share) | $ 1.02 | $ 0.58 | $ 1.76 | $ 3.43 |
Contingencies (Details)
Contingencies (Details) $ in Thousands | Jan. 12, 2015USD ($) | Sep. 30, 2020USD ($)Lawsuitshares |
Minimum [Member] | ||
Contingencies [Abstract] | ||
Loss contingency, possible losses | $ 0 | |
Maximum [Member] | ||
Contingencies [Abstract] | ||
Loss contingency, possible losses | $ 10,000 | |
Claims by Heirs of Former Shareholders [Member] | ||
Contingencies [Abstract] | ||
Number of lawsuits filed | Lawsuit | 4 | |
Number of shares claimed to have inherited (in shares) | shares | 41 | |
Stock split conversion ratio | 3,000 | |
In re Blue Cross Blue Shield Antitrust Litigation [Member] | ||
Contingencies [Abstract] | ||
Accrued liability related to legal proceedings | $ 32,000 | |
Complaint by American Clinical Solutions LLC [Member] | Insurance Claims [Member] | Triple-S Salud, Inc [Member] | ||
Contingencies [Abstract] | ||
Amount of claims sought for damages | $ 5,000 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)Segment | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | ||
Segment Information [Abstract] | ||||||
Number of operating segments | Segment | 3 | |||||
Operating revenues [Abstract] | ||||||
Premiums, net | $ 922,934 | $ 815,021 | $ 2,657,366 | $ 2,442,516 | ||
Administrative service fees | 3,752 | 2,607 | 8,755 | 7,695 | ||
Net investment income | 14,168 | 15,176 | 42,294 | 45,614 | ||
Consolidated operating revenues | 942,906 | 835,971 | 2,714,809 | 2,502,160 | ||
Operating income (loss) [Abstract] | ||||||
Consolidated operating income | 22,305 | 19,079 | 85,739 | 89,027 | ||
Consolidated net realized investment gains (losses) | 507 | 1,087 | (180) | 4,766 | ||
Consolidated net unrealized investment gains (losses) on equity investments | 11,040 | 1,267 | (17,428) | 24,259 | ||
Consolidated interest expense | (2,096) | (2,062) | (5,813) | (5,681) | ||
Consolidated other income, net | 1,811 | 485 | 6,217 | 3,359 | ||
Consolidated income before taxes | 33,567 | 19,856 | 68,535 | 115,730 | ||
Depreciation and amortization expense [Abstract] | ||||||
Depreciation and amortization expense | 3,111 | 3,684 | 10,855 | 10,729 | ||
Assets [Abstract] | ||||||
Assets | 3,120,287 | 3,120,287 | $ 2,818,826 | |||
Cash, cash equivalents, and investments | 2,003,934 | 2,003,934 | 1,753,474 | |||
Property and equipment, net | 130,220 | 130,220 | 88,588 | |||
Other assets | 98,260 | 98,260 | 68,294 | |||
Other Segments [Member] | ||||||
Operating revenues [Abstract] | ||||||
TSM operating revenues from external sources | [1] | 2,052 | 3,167 | 6,394 | 6,335 | |
Consolidated operating revenues | [1] | 4,647 | 5,243 | 14,031 | 12,384 | |
Operating income (loss) [Abstract] | ||||||
Operating income (loss) | [1] | (1,639) | (690) | (4,552) | (1,812) | |
TSM operating revenues from external sources | [1] | 2,052 | 3,167 | 6,394 | 6,335 | |
Depreciation and amortization expense [Abstract] | ||||||
Depreciation and amortization expense | [1] | 240 | 249 | 913 | 627 | |
Assets [Abstract] | ||||||
Assets | [1] | 30,408 | 30,408 | 28,346 | ||
Reportable Segment [Member] | ||||||
Operating revenues [Abstract] | ||||||
Consolidated operating revenues | 945,975 | 839,844 | 2,726,727 | 2,513,600 | ||
Operating income (loss) [Abstract] | ||||||
Operating income (loss) | 21,435 | 18,009 | 83,052 | 87,492 | ||
Depreciation and amortization expense [Abstract] | ||||||
Depreciation and amortization expense | 2,707 | 3,534 | 10,139 | 10,186 | ||
Assets [Abstract] | ||||||
Assets | 3,080,257 | 3,080,257 | 2,793,012 | |||
Reportable Segment [Member] | Managed Care [Member] | ||||||
Operating revenues [Abstract] | ||||||
Premiums, net | 849,529 | 746,043 | 2,447,588 | 2,244,448 | ||
Administrative service fees | 3,013 | 2,607 | 8,755 | 7,695 | ||
Net investment income | 5,065 | 5,624 | 14,763 | 16,981 | ||
Consolidated operating revenues | 858,251 | 755,757 | 2,473,730 | 2,273,736 | ||
Operating income (loss) [Abstract] | ||||||
Operating income (loss) | 13,006 | 5,393 | 56,495 | 56,805 | ||
Depreciation and amortization expense [Abstract] | ||||||
Depreciation and amortization expense | 2,085 | 2,931 | 8,061 | 8,480 | ||
Assets [Abstract] | ||||||
Assets | 1,406,356 | 1,406,356 | 1,190,538 | |||
Reportable Segment [Member] | Life Insurance [Member] | ||||||
Operating revenues [Abstract] | ||||||
Premiums, net | 49,616 | 45,365 | 143,325 | 133,598 | ||
Net investment income | 6,900 | 6,709 | 20,625 | 20,091 | ||
Consolidated operating revenues | 57,032 | 52,545 | 165,502 | 155,146 | ||
Operating income (loss) [Abstract] | ||||||
Operating income (loss) | 5,682 | 6,686 | 20,188 | 17,541 | ||
Depreciation and amortization expense [Abstract] | ||||||
Depreciation and amortization expense | 289 | 268 | 869 | 813 | ||
Assets [Abstract] | ||||||
Assets | 1,039,765 | 1,039,765 | 981,370 | |||
Reportable Segment [Member] | Property and Casualty Insurance [Member] | ||||||
Operating revenues [Abstract] | ||||||
Premiums, net | 23,789 | 23,613 | 66,453 | 64,470 | ||
Net investment income | 2,103 | 2,533 | 6,551 | 7,404 | ||
Consolidated operating revenues | 26,045 | 26,299 | 73,464 | 72,334 | ||
Operating income (loss) [Abstract] | ||||||
Operating income (loss) | 4,386 | 6,620 | 10,921 | 14,958 | ||
Depreciation and amortization expense [Abstract] | ||||||
Depreciation and amortization expense | 93 | 86 | 296 | 266 | ||
Assets [Abstract] | ||||||
Assets | 603,728 | 603,728 | 592,758 | |||
Unallocated Amount to Segment [Member] | ||||||
Operating revenues [Abstract] | ||||||
TSM operating revenues from external sources | 100 | 310 | 355 | 1,138 | ||
Operating income (loss) [Abstract] | ||||||
TSM operating revenues from external sources | 100 | 310 | 355 | 1,138 | ||
TSM unallocated operating expenses | (1,633) | (1,643) | (4,877) | (6,812) | ||
Depreciation and amortization expense [Abstract] | ||||||
Depreciation and amortization expense | 404 | 150 | 716 | 543 | ||
Assets [Abstract] | ||||||
Assets | 133,124 | 133,124 | 90,966 | |||
Cash, cash equivalents, and investments | 19,881 | 19,881 | 28,167 | |||
Property and equipment, net | 67,316 | 67,316 | 25,623 | |||
Other assets | 45,927 | 45,927 | 37,176 | |||
Intersegment Elimination [Member] | ||||||
Operating revenues [Abstract] | ||||||
Premiums, net | (574) | (2,107) | (4,636) | (6,529) | ||
Consolidated operating revenues | (2,595) | (2,076) | (7,637) | (6,049) | ||
Operating income (loss) [Abstract] | ||||||
Elimination of TSM intersegment charges | 2,403 | 2,403 | 7,209 | 7,209 | ||
Assets [Abstract] | ||||||
Assets | (93,094) | (93,094) | $ (65,152) | |||
Intersegment Elimination [Member] | Managed Care [Member] | ||||||
Operating revenues [Abstract] | ||||||
Premiums, net | 644 | 1,483 | 2,624 | 4,612 | ||
Intersegment Elimination [Member] | Life Insurance [Member] | ||||||
Operating revenues [Abstract] | ||||||
Premiums, net | 516 | 471 | 1,552 | 1,457 | ||
Intersegment Elimination [Member] | Property and Casualty Insurance [Member] | ||||||
Operating revenues [Abstract] | ||||||
Premiums, net | 153 | 153 | 460 | 460 | ||
Intersegment Elimination [Member] | Other Segments [Member] | ||||||
Operating revenues [Abstract] | ||||||
Consolidated operating revenues | [1] | $ 2,595 | $ 2,076 | $ 7,637 | $ 6,049 | |
[1] | * Includes segments that are not required to be reported separately, primarily the health clinics. |