Kathy Waller - AllWays Communicate, IR Ramon Ruiz-Comas - President & CEO Bobby Garcia - COO Amilcar Jordan-Perez - VP & CFO

Thom Carroll - Stifel Peter Costa - Wells Fargo Securities

Welcome to the Triple-S Management's Third Quarter 2015 Conference Call. [Operator Instructions]. At this time I would like to turn the conference over to Kathy Waller with Always Communicate. Please proceed.

Thank you, Bret and good morning everyone. Welcome to today's third quarter 2015 earnings conference call. With us are your hosts, Ramon Ruiz-Comas, President and Chief Executive Officer; Bobby Garcia, Chief Operating Officer; and Amilcar Jordan, Chief Financial Officer. Also, in the room is Liliana Rivera-Corcino, Corporate Controller. I'm sure all of you've heard the Safe Harbor statements before but we still need to get this housekeeping issue out of the way. Each quarter Triple-S Management executives will provide their current view of the Company's future. This means that they will be sharing forward-looking information with you. As you know, these statements can be affected by risks and uncertainties involved in the business. Despite management's best efforts, what actually happens may be materially different from what you hear on today's call. To get a better understanding of why this may occur, please look at the Safe Harbor section in today's news release and in the Company's periodic filings with the SEC. In addition, the information shared on this call should be considered current only as of today. After today, please use this information for your reference only and remember that the Company assumes no responsibility to update it. This call is being webcast. Shortly after it ends, you'll find an archived version on the Investor Relations page of the Company's website at www.triplesmanagement.com. If you don't have a copy of today's news release already, you can either find one on that same website or you can call me, Kathy Waller, at 312-543-6708 and I will get one to you immediately. In addition, we can always make sure that you're on our distribution list going forwards if you call. With that I'd like to turn the call over to Ramon. Ramon, please go ahead. Ramon Ruiz-Comas: Thank you, Kathy. I want to welcome everyone to this morning call. I will first provide a high-level overview of our third quarter results and then I will hand the call to Bobby Garcia, our COO, who will briefly touch on operational development. Amilcar Jordan, our CFO, will then provide a more in-depth discussion of our quarterly performance. Following our formal remarks we will answer any questions you may have. In spite of a challenging environment our third quarter financial results were better than expected. During the quarter our managed care and property and casualty segment demonstrates further improvement in their ongoing operating performance. Specifically, Medicare premiums increased 13% in the period, while property and casualty operating income rose 13% yielding double-digit margin. Within our Medicare operation we're seeing sustained year-over-year and year-to-date improvement in our business and anticipate that the initiatives we have been pursuing will continue bearing fruit in 2016. We have also been focused on strengthening this segment's executive staff and raising the CMS Star ratings on all our plans. The strategy we have craft for this business is designed to make our team more innovative, better equipped to foresee change and adapt more quickly by leveraging technology and timelier reporting to increase risk scores and Star ratings, tighten compliance and ultimately boost member retention. The aforementioned Medicare strategy has already result in a three-star rating for one of our products in 2017. Finally, our [indiscernible] remains stable and performed according to expectation. While our $1.3 billion investment portfolio has minimum exposure to Puerto Rican government obligation, Triple-S still had premium and other receivables of approximately $82 million from the government as of September 30. We believe we're adequately reserved after increasing our allowance for doubtful accounts last quarter. Furthermore, we have continued receiving payment from government accounts this quarter. Let me take a moment to comment on the Puerto Rico economy which has continued to be in the news during the past month. The local government continued to face multiple fiscal and liquidity challenge that might result in a partial government shutdown. The government has said that healthcare is one of the most important service it provides and should not be affected in the case of a shutdown. We're encouraged that the government has been successful in gaining the attention of the U.S. Congress and the Treasury Department regarding island economic situation and the unfair treatment Puerto Rico is receiving in the Medicaid and Medicare Advantage program. Multiple recommendations have been made by the government working group, the U.S. Treasury Department and even New York Governor Andrew Cuomo and other state government officials. We hope that political leadership either here in Puerto Rico or in Washington is able to reach a solution that achieves fiscal balance and more importantly puts the economy back on a growth track. As an important company in Puerto Rico we feel the responsibility to support solutions that will help propel growth in our economy and we will do everything in our power to achieve that objective. Our strong market position, liquidity and capital levels have been crucial to our performance when we consider the financial reports of our competitor on the island. We're operating in a weak economic for the past seven years and despite that we have produced positive results in each of those years. We're confident that with the management of underwriting risk, the transformation of our penetration and our continued focus on profitability we can continue to manage future challenge. Nevertheless, we continue to analyze opportunities that will help us mitigate the impact of the current economic situation in Puerto Rico. Consolidated premiums earned increased over 40% reflecting the additional managed care premium attributable to the new at-risk Medicaid contract and higher enrollment in Medicare Advantage program. Thus far our overall Medicaid claims experience has been better than anticipated, reflecting the change implement in the provider research model and other contracting strategies. The higher operating income in the property and casualty segment results from the underwriting discipline we have been following in our pricing model. We post pro forma net income of $9.8 million or $0.39 per diluted share versus pro forma net income of $8.5 million or $0.31 in the third quarter of 2014. On a GAAP basis our net income $4.2 million or $0.16 per diluted share versus $4.7 million or $0.17 last year. Consolidated operating revenues were $764.4 million, up 36% year over year, aid by $199.8 million in Medicaid premiums. The decrease in the consolidated operating expense ratio primarily reflects the significant increase in premiums earned resulting from the change in the Medicaid risk model. Regarding capital management, we will continue to repurchase our common stock in the open market. This quarter we bought back 683,000 shares, leaving $3.7 million remaining under the current repurchase authorization. Finally, we remain committed to seeking out [indiscernible] avenues of growth in Puerto Rico and expanding our Costa Rica business as well as looking for other alternatives to enhance shareholder value. In conclusion, we will continue to make decisions that are best for the long-term wellbeing of the Company and remain quite positive about the outlook for our valued business. Fortunately, we believe that we have the financial means to address the challenge we're facing, generate growth and achieve future profitability objectives. In light of the overall economic and industrial situation in Puerto Rico, however we continue to refrain providing guidance. I will now turn the call over to Bobby to give you a brief update on our key business segments.

Thanks Ramon and good morning everyone. Before beginning my prepared remarks I'd like to thank Ramon once again on behalf of the Board, management and all Triple-S employees for his many years of dedicated services. As many of you know, Ramon will be retiring as CEO at the end of the year. We will greatly miss him and wish him well. This quarter we continued our strategic transformation efforts. As we've mentioned in previous calls, the strategy is centered on improving our administrative and medical cost structure, building a more agile organization and better serving our customers which we expect will position the Company for profitable growth in our core and adjacent markets. Strengthening our managerial team is part of this transformation and we continue rounding out our team with the recent appointment of Hernando Ruiz-Jimenez, as Chief Marketing and Communications Officer. He has a proven track record in the field of international branding, consumer goods and digital media. Before joining Triple-S, Hernando was Executive Vice President, General Manager at a leading Hispanic-oriented media group in the United States. Mr. Ruiz-Jimenez will be responsible for crafting the strategies required to further improve relationships with customers, providers and other partners across all our lines of business. I'll now discuss some operational results within our managed care segment. During this quarter, the Medicare Advantage business demonstrated early signs of a turnaround, though serious challenges remain. I'd like to focus on the achievements we made so far in this business. First, we've reinforced codification and oversight efforts which continue enhancing our ability to properly capture, document and report members' conditions. You might recall these initiatives led to a higher-than-expected midyear adjustment for 2015 premiums and a final 2014 premium payment. We've also implemented new revenue management processes to drive better yields, timelier cash flows and higher quality care. These include high intensity provider engagement, deploying resources directly to the PCPs, providing them with actual clinical data and onsite technical support for ICD-10 adoption and best in class coding practices. As a result of these efforts we're pleased to report that we're on target to reach our goal of performing health risk assessments for 90% of our membership by year-end. As discussed on the previous call, the scheduled decrease in premiums annually through 2017 continues to pressure the Medicare advantage market in Puerto Rico. The benefit design and product offerings we submitted in our 2016 bid reflect the effect of these anticipated premium rate reductions. For the current open enrollment season we're deploying a mobile enrollment and sales automation tool to accelerate and improve the accuracy of sales. We're focusing on member retention, a strategy that should allow the business to realize a reasonable return on the significant investments made in the premium management and quality processes. The sales force compensation model now in place is also consistent with this strategy. We continue renegotiating significant vendor and provider contracts, realigning the PMG's risk and incentive models and adjusting the PCP compensation model to address premium rate reductions as well as quality and star rating strategies. In addition, we were among a 15 plan national group selected to participate in HEDIS Learning Collaborative. This NCQA pilot program is aimed at demonstrating the advantages of using electronic, clinical data systems to collect data to measure quality. This participation is positioning us to be ahead of the curve in what is widely anticipated to be the direction NCQA is moving which should have a corresponding impact on star ratings. We're pleased that we recently achieved a 3.5 star rating for one of our products in 2017. We continue working on strategies to improve the rating of all our products to at least four stars. This includes working closely with PCPs to connect them to the corporate HIE repository and aggressively pursuing meaningful EMR adoption and use. As Ramon mentioned, our overall claims experienced in the Medicaid business has been better than projected in our bid, reflecting the changes implemented in the providers [indiscernible] model and other contracting strategies. As a result of these efforts this quarter we recognized an estimated return premiums of $7.8 million related to the contract's profit sharing clause. We may be entitled to earn 50% of any excess profits subject to our compliance with certain quality metrics that will be determined at the end of the 15-month measurement period. In the commercial business the year-to-date MLR remains relatively stable in spite of declining membership reinforcing our strategic decision to sacrifice market share for profitability. We've continued aligning premiums and claims with average premium rates rising 6.8% year over year thereby improving the spread between the two. Amilcar will discuss the MLR fluctuation later on. The fully ensured member enrolment fell by 9% or approximately 104,000 member months year over year. This resulted largely from attrition in existing accounts due to the weak Puerto Rico economy. However, it's important to mention that sequentially the decrease in commercial member months enrollment was less than 1%. In closing, I'm pleased to say our transformation program is progressing as planned and we've begun implementing several changes to our organization structure. Again, our primary goal is to build a performance-driven company that can drive down costs and grow profitably over the long run. I'll now let Amilcar offer you a more in-depth analysis of our financial performance. Amilcar Jordan-Perez: Thank you, Bobby. Good morning. We reported net income of $4.2 million or $0.16 per diluted share for the quarter ended September 30, 2015, compared with net income of $4.7 million or $0.17 cents diluted share in the same quarter of last year. Our revenue base and related financial metrics, particularly the loss and expense ratio reflect the change in the Medicaid contract from an ASO to a fully-insured model at the beginning of the second quarter. Total consolidated operating revenues amounted to $764.4 million, an increase of $200 million or 36% from the same quarter of last year. The increase in earned premiums was partially offset by a $24 million reduction in fees primarily reflecting the previously mentioned change in the Medicaid contract. Consolidated claims incurred for the quarter rose $201 million and the reported consolidated loss ratio was 85%, a 170 basis point increase from a year ago. The consolidated loss ratio reflects a greater proportion of managed care volume which carries a higher loss ratio than our other operating segments resulting from the change in the Medicaid contract. In addition, the life insurance segment loss ratio increased to 270 basis points while the loss ratio within the property and casualty insurance segment decreased by 500 basis points. Quarterly operating expenses were $4.9 million higher than a year ago, reflecting a $4.4 million contingency accrual which I will address later, as well as increased professional service fees. These fluctuations were partially offset by reduction in other expense categories. The consolidated operating expense ratio for the quarter decreased by 530 basis points to 16.7% reflecting significantly higher premium revenues. Turning to segment highlights, managed care premium for this quarter were $689.8 million, an increase of $226 million or 49% from the same quarter last year, primarily reflecting the growth of $200 million in premiums generated by the Medicaid business, plus higher Medicare Advantage premium revenues. As Bobby mentioned, Medicaid premium for this quarter were reduced by $7.8 million in estimated return premiums related to the contract profit sharing clause. At the end of the 15-month measurement period in 2016 the Corporation may be entitled to retain 50% of any excess over the 2.5% profitability threshold establishing the contract subject to compliance with certain quality metrics. The higher-than-anticipated profit experienced in the first six months of the new contract primarily stems from lower utilization during the first quarter of the contract. We will continue monitoring the profitability components of this contract and update this estimate as needed. Medicare Premiums were up $31.8 million or close to 13% due to higher member month enrolment in Medicare Advantage products which carry a higher average premium rates. Our member month enrolment in Medicare Advantage products by approximately 51,000 mitigating the loss enrollment associated with our exit from the standalone PDP business. Total Medicare member months enrollment increased by approximately 10,000 or 3%. Excluding PDP in 2014, average per member per month Medicare Advantage Premium posted a roughly 1% year-over-year decrease mainly driven by a change in the membership mix. Our membership now has a higher proportion of non-dual eligible members which typically generate lower monthly premiums and dual. The increases in the Medicaid and Medicare premiums were partially offset by a decrease of $5 million or 2% in the premiums earned by the commercial business, reflecting the continuing decline in membership, principally driven by a lower number of contracts in the government sector and attrition in both government and other business accounts. The impact of the lower membership was partially offset by higher average commercial per remember per month premium which grows approximately 7% compared to a 4% increase in the same period last year. Managed care claims for the three-month period were up $201 million while the segment MLR was 87.8% or a 50 basis points increase from the same period a year ago, mostly influenced by the inclusion of the Medicaid risk contract. The new Medicaid fully-insured claims amounted to $184.9 million, resulting in a 92.5% MLR. This MLR was impacted by both the $7.8 million profit sharing estimate cited earlier and the favorable prior period reserve developments. Excluding the effect of these items the Medicaid MLR would have been 90.6% which is similar to the contract target MLR. The Medicare MLR was 86.4%, 300 basis points lower than the same period last year. Excluding the effects of prior period reserve developments and risk score adjustments this metric increased by 210 basis points largely reflecting the impact of lower average per member per month premiums in the Medicare Advantage products and higher pharmacy cost and utilization trends. The commercial MLR for this quarter was 84.8%, 20 basis points higher than a year ago. Excluding the effects of prior period research developments, this metric rose 50 basis points from the prior year primarily reflecting higher pharmacy cost trends. Managed Care operating expenses increased only $1.9 million year over year. As previously mentioned 2015 expenses reflect a $4.4 million contingency accrual for operational fees related to our transformation program and Medicare revenue management services and higher health insurer provider fees partially offset by lower operating expenses in the Medicaid business reflecting the results shown in the 2015 membership. The contingency accrual reflects our estimate of the outcome of certain legal and regulatory matters based on advice of our legal counsel. As we have previously disclosed we're involved in various regulatory proceedings. Our attorneys continuously assess the risk related to these contingencies and given the current stage they have recommended an increase on our reserve which we have taken in the third quarter. These are ongoing proceedings we can make no further comments related to this matter. The managed care operating expense ratio decreased by 120 basis points to 13.6% for 2015 period, reflecting higher premium revenue and relatively stable expense base. Our life insurance operation generated operating income of $4.3 million compared with $5.7 million last year. The decline primarily reflected the segment's increased policy benefits and claims incurred, resulting in a 270 basis points increase in the loss ratio. Our property and casualty insurance segment achieved operating income of $2.6 million, up from $2.3 million in the prior year reflecting better claims experience in commercial and general liability products. Consolidated income tax expense fell $7.3 million year over year. The decrease primarily reflect a $6.3 million tax expense adjustment recorded in the third quarter of 2014 resulting from an increase in the [indiscernible] higher effective tax was lower when compared to the same quarter of last year. For the nine months ended September 30th of this year net cash generated by operating activities amounted to $172 million, increasing by $111 million, principally reflecting increased production during 2015 and the change in the Medicaid model. Our investment portfolio totaled $1.3 billion as of the end of September 30, 2015, with about $79 million in net unrealized gains. Our exposure to Puerto Rico Government obligations amounts to $25 million or 2% of the portfolio, including the $15 millions of escrow bonds collateralized with U.S. obligations. At the quarter's end we have no unrealized losses on the Puerto Rico positions after other-than-temporary impairment recording during this quarter. Late claims payables as of September 30, 2015, were 56, the same when compared to December 31 of 2014. Managed Care claim liabilities increased from $249 million as of December 31, 2014, to $333 million as of the end of September 30, 2015. In summary, we're truly satisfied with our operating results for the quarter. Our companywide strategic initiatives are starting to pay off as reflected by the results in some of our business lines. Our financial strength coupled with the strategies implemented to monitor risks that the Corporation continues to face have enabled us to deliver positive results in spite of the challenging global environment. We will now proceed to our Q&A session.

[Operator Instructions]. Our first question today comes from Thom Carroll of Stifel. Please go ahead.

Few questions. I wonder if you would talk a little bit about and perhaps I missed it, in your prepared remarks, on the $4.4 million dollar contingency accrual. Can you give us a little more sense of what that is all about? Ramon Ruiz-Comas: Yes, let me give you information. The contingency accrual reflects our estimate of our outcome of certain regulatory matters based on the advice of our legal counsel. We had previously disclosed we're involved in various regulatory proceedings and our attorneys continually assess the risks related to these contingencies and given the current stage they have recommended an increase on our reserves which we have taken in the third quarter. So actually it's related to regulatory proceedings and you know that we're conservative, therefore we decide to make an accrual, an additional accrual during this quarter.

And then I wonder if you would give us a sense of the profitability across the three different segments of your managed care business. Is one driving a bigger loss than the other, perhaps its Medicaid this quarter, given the new contracts? Ramon Ruiz-Comas: Actually I would say Thomas and thanks for that question. I think that at least from my standpoint we're very happy with the three lines of business. And I will start with the -- in the case of the commercial, I think that we have mentioned, if you recall, in the last quarter we talked about an average increase of -- between 6% and 7% in the premium revenue in the premiums, therefore we have been increasing our rates by the same token by being more disciplined in terms of underwriting. You know, I think that overall portfolio, commercial portfolio has continued to do better and we feel that we're in better position. As a matter of fact, a positive note that I want to share with you is that, as Amilcar was explaining, even in terms of the members that we have, I would say, our reduction in membership sequentially in the last two quarter overall has been less 1%. So in terms of the commercial business, even though the economic conditions are difficult, I think that we have been able to pass through the increase that are required to improve our financial results. And we have been able to manage, I would say, the profitability of that business. Amilcar Jordan-Perez: I think an important item related to the commercial business that we mentioned in our script is related to the reduction in the reliance on government contracts, out of that $36 million reduction in revenues on the year-to-date commercial revenue base, two-thirds of that is related to reduction in the revenues from government contracts. So as Ramon mentioned, even though we continue to see some contraction in membership, we have seen some leveling off in the last quarter with our reduction in membership of less than 1%, but the composition of that reductions has reduced our exposure to government contracts from 12% to 17% last year to 12% to 13% of revenues this year. Ramon Ruiz-Comas: Okay, then going to the Medicare Advantage program, I think that actually I am very satisfied, very satisfied with the things that we have achieved. First, I will say that was one of the objectives that we talked in the past, obtaining a 3.5-star rating in one of the contracts we're happy that we're making progress there. But when we go the financial statement, I will say, the improvement that we're seeing, that actually was when we start to see a negative development last year, so this year we're seeing an improvement in our revenue management. And actually we have been able to identify and to review the utilization of most of our members. And one of the comments that Bobby made that I think that is extremely important is that we're on target in reaching out at least approximately 90% of our membership in terms of the health risk assessment. I think that that is extremely important. That is extremely important because that's the area where if you are able to identify properly the condition of the members that will be reflected in the premium. So again we work strategically and we have been identifying the areas where we see that we have possibility of continue to improve and that's an area where we see a lot of progress. We're very satisfied with the results that we're looking. And then in the case of the Medicaid, I think that and I will try to explain it easy, first, the result that we have seen up to this moment have been [indiscernible]. Second, because of the contract terms, in order to recognize as income, more than the 2.5% of pre-tax income that is established in the contract, you need to comply with quality matters. At this point this quality matter has been, are in the process of [indiscernible] with the government. Therefore for such reasons we make an adjustment of $7.8 million to revenues to recognize [indiscernible] liability that excess revenues or excess profit that we have up to this moment. Which means that, let's say, if things go similar to what we have today, if today will have been June 30, from the $7.8 million, $3.9 million will be additional income to us. So very important -- that is pre-tax income. So in terms of practical matters the results have been better than the ones that we were expecting and potentially if things continue in a similar trend, if we meet and we meet the quality matters -- metrics we will have an additional income of $3.9 million that we will be able to recognize in our financial statements. But right now we recognize as a liability.

Okay, so the $7.8 million [indiscernible] was pulled out of your revenue? Ramon Ruiz-Comas: Yes.

Just one last thing, goodwill on the balance sheet still $25 million? Ramon Ruiz-Comas: Yes. $25.6 million.

[Operator Instructions]. Our next question comes from Peter Costa of Wells Fargo Securities. Please go ahead.

Back on the $7.8 million in the Medicaid business, so that was a reduction to revenue, was that related to really the second quarter when the program started or was that related to the full six months? In other words-- Ramon Ruiz-Comas: It's related to the six month. What happened Peter was that we want to be sure [indiscernible] like it was, because we didn't have enough information to determine whether that was something that was going to prevail. But looking at the experience that we're having, we determine that we need to make an adjustment after the close of this quarter to recognize the excess of $2.5 million.

So the second quarter had no adjustments at all. This quarter you're taking the adjustment for the whole period. So if I think about it from a loss ratio point of point view, the whole six month period that $7.8 million effectively lowered your medical loss ratio or range of medical loss ratio by about 200 basis points. And you could theoretically get half of that back maybe perhaps next year? Ramon Ruiz-Comas: Yes.

So when I think about the best-case medical loss ratio for you Medicaid business, it's sort of at the -- maybe by next year 1 percentage point higher than the 91.5% that you booked so far in the Medicaid business, is that correct or 1% lower? Ramon Ruiz-Comas: That will depend, but your premise is correct, but then you will need to consider that by the same token, if we're able to recognizes these 3 point, let's say, 50% of whatever is the external of 2.5 that will reduce your MLR. Maybe, Peter, one of the things that, it's not specifically related but I think that I want to be clear, because when you'll see the overall managed care sometime you confuse, for our purpose the overall MLR in the Medicaid business is approximately, I will say, in between 90%, 91%, okay. So what that means that when we combine all the three business in the Managed Care actually because of the percentage that represents Medicaid from the total Managed Care business, just by mathematic your MLR, overall MLR is going to rise. So you need to be very careful when you analyze the overall loss ratio and that's why we say that we're very happy with the results that we have during this quarter, because when you consider the impact of 91% or 90% of the MLR in the Medicaid into the overall managed care, that is a one that tends to increase the overall results. That actually, it might be some kind of misleading, because you will to analyze that the MLR, expected MLR in that business is higher than the MLR that we have in the other business. Amilcar Jordan-Perez: Just to clarify, that estimate of $7.8 million can move up or down depending on the experience. And I think it's important to mention that typically what we have seen whenever there is a change in the contract the utilization from the first few months tends to be lower than the typical utilization. So my point is that we cannot really guarantee that the performance of the contract for the next nine months for this measurement period would be similar to what we have seen so far.

And then on the contingency fee, so we can understand your level of assurance if that's the right number, have you reached the settlement and that's why you are taking the fee at this point or are you close to a settlement? Ramon Ruiz-Comas: No. Actually I will say normally I will say, every quarter at all time as a matter of fact every month we ask our legal counsel about what is his recommendation as to the statute of legal cases and whether we need to make an accrual to the financial statements. Therefore whenever we think or we feel that we need to make a contingency reserve for purpose of any legal proceedings we do it. So this is normal that we don't have to arrive to any conclusion because we think that we have an accountable [indiscernible] that when you think that there is a loss that is probable and can be estimated you need to make a reserve in the financial statements.

And then last question what's cash at the parent or the unregulated cash at the Company right now? Ramon Ruiz-Comas: Okay. Let me check it out. Amilcar Jordan-Perez: Okay, holding company, minimum we do have do have small portfolios $27 million which is collateral in the [indiscernible] increasing cash in at the subsidiaries level -- Ramon Ruiz-Comas: The deferred cash is $12 million. Amilcar Jordan-Perez: Right, at the owner company.

So the unregulated cash is $12 million [indiscernible]. Ramon Ruiz-Comas: Yes.

We have a follow-up question from Thom Carroll of Stifel. Please go ahead.

Actually two other ones that came up. Do you guys have plans to reauthorize your share buyback? Ramon Ruiz-Comas: Actually the way I will answer that is that, at all time I will be consistent with what I said in the past, at all time we analyze our capital requirements, our plans, so that's something that we always evaluate. And we need to consider a lot of things even obtain authorizations for a decision like that. So that's a thing that we evaluate from time to time. And we will announce that whenever we make a decision as to where we're going to make another capital repurchase program.

And then one last thing. I wonder if you could talk to us about your tax rate and when that may normalize, seems to be a tough measure to forecast with your Company. Ramon Ruiz-Comas: I will say, Peter, our tax rate we need to consider that we have three different line of business. And I would say -- and the tax expense is calculated different. Therefore [indiscernible] because whenever -- I would say managed care has a higher tax rate and I would say that during the past two years because of the change in the tax law has make it more difficult. My expectation that going forward and I will say going forward, from 2016 on that should be normalized because what happened is that during the past two years we have a lot of change in our tax system.

And I would answer that. I think the most difficult issue here has to be the fact that we have mentioned before we're not allowed to file consolidated tax returns in Puerto Rico, so the weighted average of the effective tax rate will vary depending on their [indiscernible] of pretax income by segment. As Ramon mentioned our managed care segment has a higher tax rate, but it's probably the most volatile business that we have in our corporation. The other point is that this year so far we have had total $15 million in capital gains which are subject to a lower tax rate. And as, Ramon, mentioned it's somehow difficult in Puerto Rico to predict your effective tax rate because there has been a lot of changes in the tax laws in the past year because of the economic and fiscal situation of the government. Ramon Ruiz-Comas: But I would think that normally it shouldn't be normalized or that something else is approved. But from next year on it should be normalized.

This is actually Thom again, Peter is much better looking than I am, I jumped back in queue. Thanks for the follow up questions. Ramon Ruiz-Comas: Okay.

There are no further questions at this time. I will hand the call back for presenters for any closing comments. Ramon Ruiz-Comas: Okay. Thank you all for participating on our call today. Because this will be my last conference call I want to express my thanks and appreciation to many people with whom I've worked over the years as well as investors and stakeholders who have shown their support to Triple-S Management. We look forward to seeing some of you at the upcoming Stifel Conference and appreciate your continued interest in our Company. Thank you.

This concludes today's conference call. You may now disconnect your lines. Thank you for participating and have a pleasant day.