ANNUAL STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2016 OF THE CONDITION AND AFFAIRS OF THE

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1 * * ANNUAL STATEMENT FOR THE YEAR ENDING DECEMBER, 06 OF THE CONDITION AND AFFAIRS OF THE PLAN DE SALUD MENONITA, INC. P.O. BOX AIBONITO, P.R NAIC Group Code 9570, NAIC Company Code 9570 Employer s ID Number (Current Period) (Prior Period) Organized under the Laws of Puerto Rico, State of Domicile or Port of Entry Puerto Rico Country of Domicile United States Licensed as business type: Life, Accident & Health [ ] Property/Casualty [ ] Hospital, Medical & Dental Service or Indemnity [ ] Dental Service Corporation [ ] Vision Service Corporation [ ] Health Maintenance Organization [ ] Other [ ] Is HMO, Federally Qualified? Yes [ ] No [ ] Incorporated/Organized 0/0/00 Commenced Business 07/0/0 Statutory Home Office P O BOX, AIBONITO, PR, US (Street and Number) (City or Town, State, Country and Zip Code) Main Administrative Office P O BOX (Street and Number) AIBONITO, PR, US (City or Town, State, Country and Zip Code) (Area Code) (Telephone Number) Mail Address PO BOX, AIBONITO, PR, US (Street and Number or P.O. Box) (City or Town, State, Country and Zip Code) Primary Location of Books and Records P O BOX Internet Web Site Address (Street and Number) AIBONITO, PR, US , (City or Town, State, Country and Zip Code) (Area Code) (Telephone Number) (Extension) Statutory Statement Contact FERNANDO L NORAT ROIG CPA CICA, (Name) (Area Code) (Telephone Number) (Extension) f.norat@planmenonita.com ( Address) (Fax Number) OFFICERS Name Title Name Title PRESIDENT BOARD OF SECRETARY BOARD OF RUBEN H SANTOS MADERA, DIRECTORS LARRY BONILLA SAUDER, DIRECTORS,, OTHER OFFICERS,, DIRECTORS OR TRUSTEES State of County of ss The officers of this reporting entity, being duly sworn, each depose and say that they are the described officers of said reporting entity, and that on the reporting period stated above, all of the herein described assets were the absolute property of the said reporting entity, free and clear from any liens or claims thereon, except as herein stated, and that this statement, together with related exhibits, schedules and explanations therein contained, annexed or referred to, is a full and true statement of all the assets and liabilities and of the condition and affairs of the said reporting entity as of the reporting period stated above, and of its income and deductions therefrom for the period ended, and have been completed in accordance with the NAIC Annual Statement Instructions and Accounting Practices and Procedures manual except to the extent that: () state law may differ; or, () that state rules or regulations require differences in reporting not related to accounting practices and procedures, according to the best of their information, knowledge and belief, respectively. Furthermore, the scope of this attestation by the described officers also includes the related corresponding electronic filing with the NAIC, when required, that is an exact copy (except for formatting differences due to electronic filing) of the enclosed statement. The electronic filing may be requested by various regulators in lieu of or in addition to the enclosed statement. RUBEN H SANTOS MADERA PRESIDENT BOARD OF DIRECTORS LARRY BONILLA SAUDER SECRETARY BOARD OF DIRECTORS a. Is this an original filing? Yes [ X ] No [ ] Subscribed and sworn to before me this b. If no: day of,. State the amendment number. Date filed. Number of pages attached

2 ANNUAL STATEMENT FOR THE YEAR 06 OF THE PLAN DE SALUD MENONITA, INC. P.O. BOX AIBONITO, P.R ASSETS Current Year Prior Year Assets Nonadmitted Assets Net Admitted Assets (Cols. - ) Net Admitted Assets. Bonds (Schedule D) 80,00 80,00,08. Stocks (Schedule D):. Preferred stocks Common stocks Mortgage loans on real estate (Schedule B):. First liens 0 0. Other than first liens 0 0. Real estate (Schedule A):. Properties occupied by the company (less $ encumbrances) 0 0. Properties held for the production of income (less $ encumbrances) 0 0. Properties held for sale (less $ encumbrances) Cash ($ 70,5, Schedule E-Part ), cash equivalents ($ 0, Schedule E-Part ) and short-term investments ($ 0, Schedule DA) 70,5 70,5,58,70 6. Contract loans (including $ premium notes) Derivatives (Schedule DB) Other invested assets (Schedule BA) Receivables for securities Securities lending reinvested collateral assets (Schedule DL) 0 0. Aggregate write-ins for invested assets Subtotals, cash and invested assets (Lines to ) 50,5 0 50,5,76,5. Title plants less $ charged off (for Title insurers only) 0 0. Investment income due and accrued Premiums and considerations: 5. Uncollected premiums and agents balances in the course of collection,966,66,966,66,509, Deferred premiums, agents balances and installments booked but deferred and not yet due (including $ earned but unbilled premiums) Accrued retrospective premiums ($ ) and contracts subject to redetermination ($ ) Reinsurance: 6. Amounts recoverable from reinsurers Funds held by or deposited with reinsured companies Other amounts receivable under reinsurance contracts Amounts receivable relating to uninsured plans Current federal and foreign income tax recoverable and interest thereon Net deferred tax asset Guaranty funds receivable or on deposit Electronic data processing equipment and software 0 0 7,699. Furniture and equipment, including health care delivery assets ($ ) 0 0 0,60. Net adjustment in assets and liabilities due to foreign exchange rates Receivables from parent, subsidiaries and affiliates Health care ($ 85,677 ) and other amounts receivable 85,677 85,677 79,0 5. Aggregate write-ins for other-than-invested assets 65, ,56 60, Total assets excluding Separate Accounts, Segregated Accounts and Protected Cell Accounts (Lines to 5),5,90 0,5,90 5,0, From Separate Accounts, Segregated Accounts and Protected Cell Accounts Total (Lines 6 and 7),5,90 0,5,90 5,0,075 DETAILS OF WRITE-INS Summary of remaining write-ins for Line from overflow page Totals (Lines 0 through 0 plus 98) (Line above) OTHER ASSETS- PREPAID EXPENSES 5,60 5,60 87, OTHER ASSETS-CONSTRUCTION IN PROGRESS 07,755 07,755 7, Summary of remaining write-ins for Line 5 from overflow page Totals (Lines 50 through 50 plus 598) (Line 5 above) 65, ,56 60,756

3 ANNUAL STATEMENT FOR THE YEAR 06 OF THE PLAN DE SALUD MENONITA, INC. P.O. BOX AIBONITO, P.R LIABILITIES, CAPITAL AND SURPLUS Covered Current Year Uncovered Total Prior Year Total. Claims unpaid (less $ reinsurance ceded) 956,8 956,8 855,0. Accrued medical incentive pool and bonus amounts Unpaid claims adjustment expenses Aggregate health policy reserves, including the liability of $ for medical loss ratio rebate per the Public Health Service Act Aggregate life policy reserves Property/casualty unearned premium reserves Aggregate health claim reserves Premiums received in advance General expenses due or accrued 8,55 8,55 7, Current federal and foreign income tax payable and interest thereon (including $ on realized capital gains (losses)) Net deferred tax liability Ceded reinsurance premiums payable Amounts withheld or retained for the account of others Remittances and items not allocated Borrowed money (including $ current) and interest thereon $ (including $ current) Amounts due to parent, subsidiaries and affiliates 5,05 5,05 99,90 6. Derivatives Payable for securities Payable for securities lending Funds held under reinsurance treaties (with $ authorized reinsurers, $ unauthorized reinsurers and $ certified reinsurers) Reinsurance in unauthorized and certified ($ ) companies Net adjustments in assets and liabilities due to foreign exchange rates Liability for amounts held under uninsured plans Aggregate write-ins for other liabilities (including $ current) 80, ,00,08. Total liabilities (Lines to ),097,87 0,097,87,5,66 5. Aggregate write-ins for special surplus funds XXX XXX Common capital stock XXX XXX 0 7. Preferred capital stock XXX XXX 0 8. Gross paid in and contributed surplus XXX XXX,5,0,687,9 9. Surplus notes XXX XXX 0 0. Aggregate write-ins for other-than-special surplus funds XXX XXX 0 0. Unassigned funds (surplus) XXX XXX 5,0 0. Less treasury stock, at cost:. shares common (value included in Line 6 $ ) XXX XXX 0. shares preferred (value included in Line 7 $ ) XXX XXX 0. Total capital and surplus (Lines 5 to minus Line ) XXX XXX,56,056,687,9. Total liabilities, capital and surplus (Lines and ) XXX XXX,5,90 5,0,075 DETAILS OF WRITE-INS 0. STATUTORY RESERVE 80,00 80,00, Summary of remaining write-ins for Line from overflow page Totals (Lines 0 through 0 plus 98) (Line above) 80, ,00, XXX XXX 50. XXX XXX 50. XXX XXX 598. Summary of remaining write-ins for Line 5 from overflow page XXX XXX Totals (Lines 50 through 50 plus 598) (Line 5 above) XXX XXX XXX XXX 00. XXX XXX 00. XXX XXX 098. Summary of remaining write-ins for Line 0 from overflow page XXX XXX Totals (Lines 00 through 00 plus 098) (Line 0 above) XXX XXX 0 0

4 ANNUAL STATEMENT FOR THE YEAR 06 OF THE PLAN DE SALUD MENONITA, INC. P.O. BOX AIBONITO, P.R STATEMENT OF REVENUE AND EXPENSES Current Year Uncovered Total Prior Year Total. Member Months XXX 8,56 69,668. Net premium income (including $ 0 non-health premium income) XXX,09,5,7,55. Change in unearned premium reserves and reserve for rate credits XXX 0 0. Fee-for-service (net of $ medical expenses) XXX Risk revenue XXX Aggregate write-ins for other health care related revenues XXX 0,, 7. Aggregate write-ins for other non-health revenues XXX,0, Total revenues (Lines to 7) XXX 5,0,00,65,675 Hospital and Medical: 9. Hospital/medical benefits 8,8,58 7,769,6 0. Other professional services 0 0. Outside referrals 0 0. Emergency room and out-of-area 7,770 69,067. Prescription drugs,975,667,70,708. Aggregate write-ins for other hospital and medical Incentive pool, withhold adjustments and bonus amounts Subtotal (Lines 9 to 5) 0,5,695 0,8,97 Less: 7. Net reinsurance recoveries 0 8. Total hospital and medical (Lines 6 minus 7) 0,5,695 0,8,97 9. Non-health claims (net) Claims adjustment expenses, including $ 0 cost containment expenses 0 0. General administrative expenses,90,9,09,65. Increase in reserves for life and accident and health contracts (including $ increase in reserves for life only) 0 0. Total underwriting deductions (Lines 8 through ) 0 5,,989,9,0. Net underwriting gain or (loss) (Lines 8 minus ) XXX 5,0,65 5. Net investment income earned (Exhibit of Net Investment Income, Line 7) Net realized capital gains (losses) less capital gains tax of $ Net investment gains (losses) (Lines 5 plus 6) Net gain or (loss) from agents or premium balances charged off [(amount recovered $ ) (amount charged off $ )] Aggregate write-ins for other income or expenses Net income or (loss) after capital gains tax and before all other federal income taxes (Lines plus 7 plus 8 plus 9) XXX 5,0,65. Federal and foreign income taxes incurred XXX 0 0. Net income (loss) (Lines 0 minus ) XXX 5,0,65 DETAILS OF WRITE-INS 060. Administrative fee XXX 0,, 060. XXX XXX Summary of remaining write-ins for Line 6 from overflow page XXX Totals (Lines 060 through 060 plus 0698) (Line 6 above) XXX 0,, 070. ADMINISTRATIVE FEE XXX,0, XXX 070. XXX Summary of remaining write-ins for Line 7 from overflow page XXX Totals (Lines 070 through 070 plus 0798) (Line 7 above) XXX,0, Summary of remaining write-ins for Line from overflow page Totals (Lines 0 through 0 plus 98) (Line above) Summary of remaining write-ins for Line 9 from overflow page Totals (Lines 90 through 90 plus 998) (Line 9 above) 0 0 0

5 ANNUAL STATEMENT FOR THE YEAR 06 OF THE PLAN DE SALUD MENONITA, INC. P.O. BOX AIBONITO, P.R STATEMENT OF REVENUE AND EXPENSES (Continued) Current Year Prior Year CAPITAL & SURPLUS ACCOUNT. Capital and surplus prior reporting year,687,9,56,56. Net income or (loss) from Line 5,0,65 5. Change in valuation basis of aggregate policy and claim reserves Change in net unrealized capital gains (losses) less capital gains tax of $ Change in net unrealized foreign exchange capital gain or (loss) Change in net deferred income tax Change in nonadmitted assets Change in unauthorized and certified reinsurance 0 0. Change in treasury stock 0 0. Change in surplus notes 0 0. Cumulative effect of changes in accounting principles 0 0. Capital Changes:. Paid in 0 0. Transferred from surplus (Stock Dividend) 0 0. Transferred to surplus Surplus adjustments: 5. Paid in (56,96),60 5. Transferred to capital (Stock Dividend) Transferred from capital Dividends to stockholders Aggregate write-ins for gains or (losses) in surplus Net change in capital and surplus (Lines to 7) (5,8) 5,9 9. Capital and surplus end of reporting year (Line plus 8),56,056,687,9 DETAILS OF WRITE-INS Summary of remaining write-ins for Line 7 from overflow page Totals (Lines 70 through 70 plus 798) (Line 7 above) 0 0 5

6 ANNUAL STATEMENT FOR THE YEAR 06 OF THE PLAN DE SALUD MENONITA, INC. P.O. BOX AIBONITO, P.R Cash from Operations CASH FLOW Current Year Prior Year. Premiums collected net of reinsurance,56,7 0,08,9. Net investment income 0 0. Miscellaneous income,0,85,,. Total (Lines through ),98,0,79,6 5. Benefit and loss related payments,0,6 0,6,06 6. Net transfers to Separate Accounts, Segregated Accounts and Protected Cell Accounts 0 7. Commissions, expenses paid and aggregate write-ins for deductions,07,80,07,07 8. Dividends paid to policyholders 0 9. Federal and foreign income taxes paid (recovered) net of $ tax on capital gains (losses) Total (Lines 5 through 9) 5,68,5,7,. Net cash from operations (Line minus Line 0) (655,9) (,5,7) Cash from Investments. Proceeds from investments sold, matured or repaid:. Bonds 0 0. Stocks 0 0. Mortgage loans 0 0. Real estate Other invested assets Net gains or (losses) on cash, cash equivalents and short-term investments Miscellaneous proceeds 0 65,908.8 Total investment proceeds (Lines. to.7) 0 65,908. Cost of investments acquired (long-term only):. Bonds 0 0. Stocks 0 0. Mortgage loans 0 0. Real estate Other invested assets Miscellaneous applications 6, Total investments acquired (Lines. to.6) 6,06 0. Net increase (decrease) in contract loans and premium notes Net cash from investments (Line.8 minus Line.7 minus Line ) (6,06) 65,908 Cash from Financing and Miscellaneous Sources 6. Cash provided (applied): 6. Surplus notes, capital notes Capital and paid in surplus, less treasury stock (56,96),7 6. Borrowed funds Net deposits on deposit-type contracts and other insurance liabilities Dividends to stockholders Other cash provided (applied) (0,78) 76,96 7. Net cash from financing and miscellaneous sources (Lines 6. to 6. minus Line 6.5 plus Line 6.6) (656,57) 777, RECONCILIATION OF CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS 8. Net change in cash, cash equivalents and short-term investments (Line, plus Lines 5 and 7) (,58,09) (80,79) 9. Cash, cash equivalents and short-term investments: 9. Beginning of year,58,70,908, End of year (Line 8 plus Line 9.) 70,5,58,70 6

7 7 ANNUAL STATEMENT FOR THE YEAR 06 OF THE PLAN DE SALUD MENONITA, INC. P.O. BOX AIBONITO, P.R ANALYSIS OF OPERATIONS BY LINES OF BUSINESS Comprehensive (Hospital & Medical) Medicare Dental Vision Other Total Supplement Only Only Other Health Non-Health. Net premium income,09,5,09, Change in unearned premium reserves and reserve for rate credit 0. Fee-for-service (net of $ medical expenses) 0 XXX. Risk revenue 0 XXX 5. Aggregate write-ins for other health care related revenues XXX 6. Aggregate write-ins for other non-health care related revenues,0,85 XXX XXX XXX XXX XXX XXX XXX XXX,0,85 7. Total revenues (Lines to 6) 5,0,00,09, ,0,85 8. Hospital/medical benefits 8,8,58 8,8,58 XXX 9. Other professional services 0 0 XXX 0. Outside referrals 0 0 XXX. Emergency room and out-of-area 7,770 7,770 XXX. Prescription drugs,975,667,975,667 XXX. Aggregate write-ins for other hospital and medical XXX. Incentive pool, withhold adjustments and bonus amounts 0 0 XXX 5. Subtotal (Lines 8 to ),5,695,5, XXX 6. Net reinsurance recoveries 0 0 XXX 7. Total hospital and medical (Lines 5 minus 6),5,695,5, XXX 8. Non-health claims (net) 0 XXX XXX XXX XXX XXX XXX XXX XXX 0 9. Claims adjustment expenses including $ 0 cost containment expenses General administrative expenses,90,9,90,9. Increase in reserves for accident and health contracts 0 0 XXX. Increase in reserves for life contracts 0 XXX XXX XXX XXX XXX XXX XXX XXX. Total underwriting deductions (Lines 7 to ) 5,,989 5,, Net underwriting gain or (loss) (Line 7 minus Line ) 5,0 (,5,88) ,0,85 DETAILS OF WRITE-INS 050. XXX 050. XXX 050. XXX Summary of remaining write-ins for Line 5 from overflow page XXX Totals (Lines 050 through 050 plus 0598) (Line 5 above) XXX 060. ADMINISTRATIVE FEE,0,85 XXX XXX XXX XXX XXX XXX XXX XXX,0, XXX XXX XXX XXX XXX XXX XXX XXX 060. XXX XXX XXX XXX XXX XXX XXX XXX Summary of remaining write-ins for Line 6 from overflow page 0 XXX XXX XXX XXX XXX XXX XXX XXX Totals (Lines 060 through 060 plus 0698) (Line 6 above),0,85 XXX XXX XXX XXX XXX XXX XXX XXX,0,85 0. XXX 0. XXX 0. XXX 98. Summary of remaining write-ins for Line from overflow page XXX 99. Totals (Lines 0 through 0 plus 98) (Line above) XXX 5 6 Federal Employees Health Benefit Plan 7 Title XVIII Medicare 8 Title XIX Medicaid 9 0

8 ANNUAL STATEMENT FOR THE YEAR 06 OF THE PLAN DE SALUD MENONITA, INC. P.O. BOX AIBONITO, P.R UNDERWRITING AND INVESTMENT EXHIBIT PART - PREMIUMS Line of Business Direct Business Reinsurance Assumed Reinsurance Ceded Net Premium Income (Cols. +-). Comprehensive (hospital and medical),09,5 0 0,09,5. Medicare Supplement Dental only Vision only Federal Employees Health Benefits Plan Title XVIII - Medicare Title XIX - Medicaid Other health Health subtotal (Lines through 8),09,5 0 0,09,5 0. Life Property/casualty Totals (Lines 9 to ),09,5 0 0,09,5

9 9 ANNUAL STATEMENT FOR THE YEAR 06 OF THE PLAN DE SALUD MENONITA, INC. P.O. BOX AIBONITO, P.R UNDERWRITING AND INVESTMENT EXHIBIT Comprehensive (Hospital & Medical) PART CLAIMS INCURRED DURING THE YEAR Medicare Supplement Dental Only Total Other Health.Payments during the year:. Direct,0,6,0,6. Reinsurance assumed 0 0. Reinsurance ceded 0 0. Net,0,6,0, Paid medical incentive pools and bonuses 0 0.Claim liability December, current year from Part A:. Direct 956,8 956, Reinsurance assumed Reinsurance ceded Net 956,8 956, Claim reserve December, current year from Part D:. Direct 0. Reinsurance assumed 0. Reinsurance ceded Net Accrued medical incentive pools and bonuses, current year 0 6.Net healthcare receivables (a) 0 7.Amounts recoverable from reinsurers December, current year 0 8.Claim liability December, prior year from Part A: 8. Direct 855,0 855, Reinsurance assumed Reinsurance ceded Net 855,0 855, Claim reserve December, prior year from Part D: 9. Direct Reinsurance assumed Reinsurance ceded Net Accrued medical incentive pools and bonuses, prior year Amounts recoverable from reinsurers December, prior year 5 Vision Only 6 Federal Employees Health Benefits Plan 7 Title XVIII Medicare 8 Title XIX Medicaid 9 0 Other Non- Health Incurred benefits:. Direct,5,695,5, Reinsurance assumed Reinsurance ceded Net,5,695,5, Incurred medical incentive pools and bonuses (a) Excludes $. loans or advances to providers not yet expensed.

10 ANNUAL STATEMENT FOR THE YEAR 06 OF THE PLAN DE SALUD MENONITA, INC. P.O. BOX AIBONITO, P.R UNDERWRITING AND INVESTMENT EXHIBIT PART A - CLAIMS LIABILITY END OF CURRENT YEAR Total Comprehensive (Hospital and Medical) Medicare Supplement Dental Only Vision Only Federal Employees Health Benefits Plan Title XVIII Medicare Title XIX Medicaid Other Health Other Non-Health. Reported in Process of Adjustment:.. Direct 956,8 956,8.. Reinsurance assumed 0.. Reinsurance ceded 0.. Net 956,8 956, Incurred but Unreported:.. Direct 0.. Reinsurance assumed 0.. Reinsurance ceded 0.. Net Amounts Withheld from Paid Claims and Capitations:.. Direct 0.. Reinsurance assumed 0.. Reinsurance ceded 0.. Net TOTALS:.. Direct 956,8 956, Reinsurance assumed Reinsurance ceded Net 956,8 956,

11 ANNUAL STATEMENT FOR THE YEAR 06 OF THE PLAN DE SALUD MENONITA, INC. P.O. BOX AIBONITO, P.R Line of Business UNDERWRITING AND INVESTMENT EXHIBIT PART B - ANALYSIS OF CLAIMS UNPAID - PRIOR YEAR-NET OF REINSURANCE Claims Paid During the Year On Claims Incurred Prior to January of Current Year On Claims Incurred During the Year Claim Reserve and Claim Liability December of Current Year On Claims Unpaid December of Prior Year On Claims Incurred During the Year 5 6 Claims Incurred in Prior Years (Columns + ) Estimated Claim Reserve and Claim Liability December of Prior Year. Comprehensive (hospital and medical) 855,0 0,575, ,8 855,0 855,0. Medicare Supplement 0 0. Dental Only 0 0. Vision Only Federal Employees Health Benefits Plan Title XVIII - Medicare Title XIX - Medicaid Other health Health subtotal (Lines to 8) 855,0 0,575, ,8 855,0 855,0 0. Healthcare receivables (a) 0 0. Other non-health 0 0. Medical incentive pools and bonus amounts 0 0. Totals (Lines 9-0++) 855,0 0,575, ,8 855,0 855,0 (a) Excludes $ loans or advances to providers not yet expensed.

12 ANNUAL STATEMENT FOR THE YEAR 06 OF THE PLAN DE SALUD MENONITA, INC. P.O. BOX AIBONITO, P.R UNDERWRITING AND INVESTMENT EXHIBIT PART C - DEVELOPMENT OF PAID AND INCURRED HEALTH CLAIMS (000 Omitted) Section A Paid Health Claims - Hospital and Medical Cumulative Net Amounts Paid Year in Which Losses Were Incurred Prior XXX XXX XXX 7, XXX XXX XXX 9, XXX XXX XXX XXX,5 -HM Section B Incurred Health Claims - Hospital and Medical 0 Sum of Cumulative Net Amount Paid and Claim Liability, Claim Reserve and Medical Incentive Pool and Bonuses Outstanding at End of Year Year in Which Losses Were Incurred. Prior XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX, Years in which Premiums were Earned and Claims were Incurred Section C Incurred Year Health Claims and Claims Adjustment Expense Ratio Hospital and Medical Claim Adjustment Expense Payments (Col. /) Percent 5 Claim and Claim Adjustment Expense Payments (Col. +) 6 (Col. 5/) Percent 7 8 Unpaid Claims Adjustment Expenses 9 Total Claims and Claims Adjustment Expense Incurred (Col ) Premiums Earned Claims Payments Claims Unpaid , , ,09,5 0.0,5 8., (Col. 9/) Percent

13 ANNUAL STATEMENT FOR THE YEAR 06 OF THE PLAN DE SALUD MENONITA, INC. P.O. BOX AIBONITO, P.R UNDERWRITING AND INVESTMENT EXHIBIT PART C - DEVELOPMENT OF PAID AND INCURRED HEALTH CLAIMS (000 Omitted) Section A - Paid Health Claims - Grand Total Cumulative Net Amounts Paid Year in Which Losses Were Incurred Prior XXX XXX XXX 7, XXX XXX XXX 9, XXX XXX XXX XXX 0,576 -GT Year in Which Losses Were Incurred Section B - Incurred Health Claims - Grand Total 0 Sum of Cumulative Net Amount Paid and Claim Liability, Claim Reserve and Medical Incentive Pool and Bonuses Outstanding at End of Year Prior XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX,87 Years in which Premiums were Earned and Claims were Incurred Section C Incurred Year Health Claims and Claims Adjustment Expense Ratio Grand Total Claim Adjustment Expense Payments (Col. /) Percent 5 Claim and Claim Adjustment Expense Payments (Col. +) 6 (Col. 5/) Percent 7 8 Unpaid Claims Adjustment Expenses 9 Total Claims and Claims Adjustment Expense Incurred (Col ) Premiums Earned Claims Payments Claims Unpaid , , ,09 0, , , (Col. 9/) Percent

14 ANNUAL STATEMENT FOR THE YEAR 06 OF THE PLAN DE SALUD MENONITA, INC. P.O. BOX AIBONITO, P.R UNDERWRITING AND INVESTMENT EXHIBIT PART D - AGGREGATE RESERVE FOR ACCIDENT AND HEALTH CONTRACTS ONLY Unearned premium reserves 0. Additional policy reserves (a) 0. Reserve for future contingent benefits 0. Reserve for rate credits or experience rating refunds (including $ for investment income) 0 Total Comprehensive (Hospital & Medical) Medicare Supplement Dental Only Vision Only Federal Employees Health Benefit Plan 5. Aggregate write-ins for other policy reserves Totals (gross) Reinsurance ceded 0 8. Totals (Net) (Page, Line ) Present value of amounts not yet due on claims 0 0. Reserve for future contingent benefits 0. Aggregate write-ins for other claim reserves Totals (gross) Reinsurance ceded 0. Totals (Net) (Page, Line 7) DETAILS OF WRITE-INS Summary of remaining write-ins for Line 5 from overflow page Totals (Lines 050 through 050 plus 0598) (Line 5 above) Summary of remaining write-ins for Line from overflow page Totals (Lines 0 through 0 plus 98) (Line above) Title XVIII Medicare Title XIX Medicaid Other (a) Includes $ premium deficiency reserve.

15 ANNUAL STATEMENT FOR THE YEAR 06 OF THE PLAN DE SALUD MENONITA, INC. P.O. BOX AIBONITO, P.R UNDERWRITING AND INVESTMENT EXHIBIT PART - ANALYSIS OF EXPENSES Claim Adjustment Expenses 5 Cost Containment Expenses Other Claim Adjustment Expenses General Administrative Expenses Investment Expenses Total. Rent ($ for occupancy of own building) 0. Salaries, wages and other benefits,77,59,77,59. Commissions (less $ ceded plus $ assumed) 5,95 5,95. Legal fees and expenses,098, Certifications and accreditation fees 9,65 9,65 6. Auditing, actuarial and other consulting services 7,65 7,65 7. Traveling expenses 8,69 8,69 8. Marketing and advertising 7,86 7,86 9. Postage, express and telephone 67,80 67,80 0. Printing and office supplies 59,9 59,9. Occupancy, depreciation and amortization,56,56. Equipment,607,607. Cost or depreciation of EDP equipment and software,665,665. Outsourced services including EDP, claims, and other services Boards, bureaus and association fees Insurance, except on real estate 7,59 7,59 7. Collection and bank service charges 79,787 79, Group service and administration fees 5,000 5, Reimbursements by uninsured plans Reimbursements from fiscal intermediaries 0 0. Real estate expenses 0 0. Real estate taxes 0 0. Taxes, licenses and fees:. State and local insurance taxes 0 0. State premium taxes 0 0. Regulatory authority licenses and fees 0 0. Payroll taxes,856,856.5 Other (excluding federal income and real estate taxes) 0 0. Investment expenses not included elsewhere Aggregate write-ins for expenses , ,7 6. Total expenses incurred (Lines to 5) 0 0,90,9 0 (a),90,9 7. Less expenses unpaid December, current year 8,55 8,55 8. Add expenses unpaid December, prior year 0 0 7, , Amounts receivable relating to uninsured plans, prior year Amounts receivable relating to uninsured plans, current year 0. Total expenses paid (Lines 6 minus 7 plus 8 minus 9 plus 0) 0 0,87, 0,87, DETAILS OF WRITE-INS 50. OTHER GENERAL EXPENSES 596,7 596, Summary of remaining write-ins for Line 5 from overflow page Totals (Line 50 through 50 plus 598) (Line 5 above) , ,7 (a) Includes management fees of $ to affiliates and $ to non-affiliates.

16 ANNUAL STATEMENT FOR THE YEAR 06 OF THE PLAN DE SALUD MENONITA, INC. P.O. BOX AIBONITO, P.R EXHIBIT OF NET INVESTMENT INCOME Collected During Year Earned During Year. U.S. Government bonds (a). Bonds exempt from U.S. tax (a). Other bonds (unaffiliated) (a). Bonds of affiliates (a) 0. Preferred stocks (unaffiliated) (b) 0. Preferred stocks of affiliates (b) 0. Common stocks (unaffiliated) 0. Common stocks of affiliates 0. Mortgage loans (c). Real estate (d) 5. Contract loans 6. Cash, cash equivalents and short-term investments (e) 7. Derivative instruments (f) 8. Other invested assets 9. Aggregate write-ins for investment income Total gross investment income 0 0. Investment expenses (g). Investment taxes, licenses and fees, excluding federal income taxes (g). Interest expense (h). Depreciation on real estate and other invested assets (i) 5. Aggregate write-ins for deductions from investment income 0 6. Total deductions (Lines through 5) 0 7. Net investment income (Line 0 minus Line 6) 0 DETAILS OF WRITE-INS Summary of remaining write-ins for Line 9 from overflow page Totals (Lines 090 through 090 plus 0998) (Line 9 above) Summary of remaining write-ins for Line 5 from overflow page Totals (Lines 50 through 50 plus 598) (Line 5 above) 0 (a) Includes $ accrual of discount less $ amortization of premium and less $ 0 paid for accrued interest on purchases. (b) Includes $ accrual of discount less $ amortization of premium and less $ 0 paid for accrued dividends on purchases. (c) Includes $ 0 accrual of discount less $ 0 amortization of premium and less $ paid for accrued interest on purchases. (d) Includes $ for company s occupancy of its own buildings; and excludes $ interest on encumbrances. (e) Includes $ accrual of discount less $ amortization of premium and less $ paid for accrued interest on purchases. (f) Includes $ accrual of discount less $ amortization of premium. (g) Includes $ investment expenses and $ investment taxes, licenses and fees, excluding federal income taxes, attributable to segregated and Separate Accounts. (h) Includes $ interest on surplus notes and $ interest on capital notes. (i) Includes $ depreciation on real estate and $ depreciation on other invested assets. EXHIBIT OF CAPITAL GAINS (LOSSES) Realized Gain (Loss) On Sales or Maturity Other Realized Adjustments Total Realized Capital Gain (Loss) (Columns + ) Change in Unrealized Capital Gain (Loss) 5 Change in Unrealized Foreign Exchange Capital Gain (Loss). U.S. Government bonds 0. Bonds exempt from U.S. tax 0. Other bonds (unaffiliated) 0. Bonds of affiliates Preferred stocks (unaffiliated) Preferred stocks of affiliates Common stocks (unaffiliated) Common stocks of affiliates Mortgage loans Real estate Contract loans 0 6. Cash, cash equivalents and short-term investments Derivative instruments 0 8. Other invested assets Aggregate write-ins for capital gains (losses) Total capital gains (losses) DETAILS OF WRITE-INS Summary of remaining write-ins for Line 9 from overflow page Totals (Lines 090 through 090 plus 0998) (Line 9 above)

17 ANNUAL STATEMENT FOR THE YEAR 06 OF THE PLAN DE SALUD MENONITA, INC. P.O. BOX AIBONITO, P.R EXHIBIT OF NONADMITTED ASSETS Current Year Total Nonadmitted Assets Prior Year Total Nonadmitted Assets Change in Total Nonadmitted Assets (Col. - Col. ). Bonds (Schedule D) Stocks (Schedule D):. Preferred stocks Common stocks Mortgage loans on real estate (Schedule B):. First liens Other than first liens Real estate (Schedule A):. Properties occupied by the company Properties held for the production of income Properties held for sale Cash (Schedule E-Part ), cash equivalents (Schedule E-Part ) and short-term investments (Schedule DA) Contract loans Derivatives (Schedule DB) Other invested assets (Schedule BA) Receivables for securities Securities lending reinvested collateral assets (Schedule DL) Aggregate write-ins for invested assets Subtotals, cash and invested assets (Lines to ) Title plants (for Title insurers only) Investment income due and accrued Premiums and considerations: 5. Uncollected premiums and agents balances in the course of collection Deferred premiums, agents balances and installments booked but deferred and not yet due Accrued retrospective premiums and contracts subject to redetermination Reinsurance: 6. Amounts recoverable from reinsurers Funds held by or deposited with reinsured companies Other amounts receivable under reinsurance contracts Amounts receivable relating to uninsured plans Current federal and foreign income tax recoverable and interest thereon Net deferred tax asset Guaranty funds receivable or on deposit Electronic data processing equipment and software Furniture and equipment, including health care delivery assets Net adjustment in assets and liabilities due to foreign exchange rates Receivables from parent, subsidiaries and affiliates Health care and other amounts receivable Aggregate write-ins for other-than-invested assets Total assets excluding Separate Accounts, Segregated Accounts and Protected Cell Accounts (Lines to 5) From Separate Accounts, Segregated Accounts and Protected Cell Accounts Total (Lines 6 and 7) DETAILS OF WRITE-INS Summary of remaining write-ins for Line from overflow page Totals (Lines 0 through 0 plus 98) (Line above) Summary of remaining write-ins for Line 5 from overflow page Totals (Lines 50 through 50 plus 598) (Line 5 above)

18 ANNUAL STATEMENT FOR THE YEAR 06 OF THE PLAN DE SALUD MENONITA, INC. P.O. BOX AIBONITO, P.R EXHIBIT - ENROLLMENT BY PRODUCT TYPE FOR HEALTH BUSINESS ONLY Source of Enrollment Prior Year First Quarter Total Members at End of 6 5 Current Year Second Quarter Third Quarter Current Year Member Months. Health Maintenance Organizations,5,95 5,9 5,76 5,79 8,56. Provider Service Organizations 0. Preferred Provider Organizations 0. Point of Service 0 5. Indemnity Only 0 6. Aggregate write-ins for other lines of business Total,5,95 5,9 5,76 5,79 8,56 DETAILS OF WRITE-INS Summary of remaining write-ins for Line 6 from overflow page Totals (Lines 060 through 060 plus 0698) (Line 6 above)

19 PLAN DE SALUD MENONITA, INC. NOTES TO STATUTORY-BASED FINANCIAL STATEMENTS YEAR ENDED DECEMBER, 06 Note -Organization and summary of significant accounting polices Organization Through corporate resolution adopted by the Board of Directors of Mennonite General Hospital, Inc., it was authorized the transfer of the net tangible and intangible assets of what until June 0, 0 was a division of the Mennonite General Hospital, Inc. (Mennonite General Hospital Health Plan - a Division of Mennonite General Hospital, Inc.), into a new entity incorporated and existing since December, 00, Plan de Salud del Hospital Menonita, Inc.,which underwent change of corporate name to Plan de Salud Menonita, Inc. (the Plan) on May, 0, and is what currently exists and operates as a health maintenance organization (HMO). It provides comprehensive health care services to subscribers on a prepaid basis principally through Mennonite General Hospital, Inc., its Sole Member, with hospital facilities at Aibonito, Cayey and Caguas (the Hospital), but also through contractual arrangements with other health care providers. ThePlan is authorized by the Office of the Commissioner of Insurance of Puerto Rico. Summary of significant accounting polices Basis of presentation The accompanying statutory-basis financial statements have been prepared in conformity with accounting practices prescribed or permitted by the Office of the Commissioner of Insurance of the Commonwealth of Puerto Rico (the Commissioner), which vary in some respects from accounting principles generally accepted in theunited States of America. Themostsignificant of these differences are as follows: (a)certain assets designated as "non-admitted assets" (principally premiums receivable over 90 days old, certain prepaid assets, advances to employees, and furniture and equipment) have been charged to unrestricted net assets. The Commissioner's prescribed accounting practices include a variety of publications of the National Association of Insurance Commissioners (NAIC), aswell as state laws, regulations and general administrative rules. Use of estimates The preparation of the statutory-basis financial statements requires management to make estimates and assumptions that affect the reported amounts in the statutory-based financial statements and the accompanying notes, often because the Plan must make estimates about the effects of matters that areinherently uncertain and will change in subsequent periods as more information becomes available. The impact of any changes in estimates is included in the determination of changes in unrestricted net assets in the period in which the estimate is adjusted. Fair value measurements 6

20 Financial instruments arestatedat fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Market or observable inputs arethepreferred source of value, followed by assumptions based on hypothetical transactions in the absence of market input. The valuation techniques are based upon observable or unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Plan's market assumptions. These three types of inputs create the following fair value hierarchy: o Level - Quoted prices for identical instruments in active markets o Level - Quoted prices for similar instruments in active markets, quoted pricesfor identical or similar instruments in markets that arenot active and modelderived valuations whose inputs areobservable or whose significant value drivers are observable. o Level - Significant inputs to the valuation model are unobservable. Investments included in state guarantee fund deposit Bonds and stocks are valued in accordance with rules promulgated by NAIC SSAP. Bonds eligible for amortization under such rules are stated at amortized cost. Premiums and discount are amortized using the interest method. Net realized gains and losseson the sale of bonds, if any, are determined using thespecific-identification method and areaccounted for as other revenues. Cash equivalents For purposes of the statementof cashflows, the Plan considers all cash in bank accounts and money market account as cash and cash equivalents. Non-admitted assets Certain assets designated as "non-admitted assets" have been excluded from the statutory-basis statements of admitted assets, liabilities and unrestricted net assets through a charge to unrestricted net assets. Non-admitted assets as of December, 06 included prepaid insurance, prepaid expenses, non-admitted property and equipment, and accounts receivable over 90 days. Premiums revenue Membership contracts are on a yearly basis subject to cancellation by the employer group, the individual or the Plan, typically upon thirty days advances written notice. Premiums are due monthly and arerecognized as revenue during the period in which the Plan is obligated to provide services to subscribers. 6.

21 Revenues consist of net premium income that is recognized in the period in which subscribers are entitled to receive health care services. Premiums received in full during the current period which is not due until future periods are recorded as premiums received in advance in the accompanying statutory-basis financial statements. ThePlan reports uncollected premium balances from its insured members as uncollected premium balances on the statutory-basis financial statements. Uncollected premium balances that are over 90 days past due are considered non-admitted assets. Health care service cost recognition ThePlan contracts with various health care providers for the provision of certain medical care services to its subscribers. The Plan compensates providers of services, mainly,by a prospectively determined perdiem rate. Hospital and medical expenses and corresponding liabilities include claims paid, claims processed but not yet paid, estimates for claims received but not yet processed, estimates for the costs of health care services subscribers have received but for which claims have not yet been submitted, and for liabilities for physician, hospital, and other medical costs disputes. Thecost of other health care servicesprovided or contracted for is accrued in the period in which it is provided to a subscriber based in part on estimates, including an accrual for medical services for which no bill has yet been received (incurred but not yet reported). The estimates for such medical services arebased primarily on past experience together with current factors, and are adjusted, if necessary, as experience developsor new information becomes available. Adjustments to claims unpaid, estimates and aggregate health reserves are reflected in operating results in the period in which the change in estimate is identified. Although considerable variability is inherent in suchestimates, management believes these reserves areadequate to cover the Plan's liability for unpaid claims and aggregate health reserves as of December, 06. Income taxes FASB ASC clarifies the accounting for uncertainty in income taxes recognized in an entity's financial statements in accordance with FASB ASC Thisaccounting standard prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. It also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. As of December, 06, the Plan concluded that there areno uncertain tax positions as such term is defined in this provision, as it related to the Plan. See note 8. Accounting Changesand Corrections of Errors Not applicable. Business Combinations and Goodwill Not applicable 6.

22 Discontinued Operations Not applicable Trouble debt restructuring for creditors Not applicable. Reverse mortgages Not applicable. Repurchase agreements and/or securities lending transactions Not applicable. Real Estate Investment Not applicable. Investment in low-income housing tax credits Not applicable. Joint Ventures, Partnerships and Limited Liability Companies Not applicable. Debt Not applicable Note - Stateguarantee fund deposit The Plan is required, by Article 9.0 of the Insurance Code of the Commonwealth of Puerto Rico, to maintain minimum deposit in escrow with the Commissioner,which had a market value that fell below the required amount of $600,000 at December, 06. The Plan's unrestricted net assets and contributions cannot be lower than said amount at any reporting date. The Plan is not in compliance with this requirement as of December, 06 due to significant market value decline. This restricted cash reserve consists principally of Puerto Rico government obligations and arestatedat amortized cost. This reserve is presented as State Guarantee Fund Deposit in the accompanying statutory basis - statements of admitted assets, liabilities and unrestricted net assets. Interest earned on this reserve accrues to the Plan. The composition of the state guarantee fund deposit at December, 06 consists of the following: Level : Carrying 6.

23 Value Market Value PR Employee Retirement System Govt $505,000 $87,058 PR Commonwealth for Issues DTD 5,000 7,05 $60,000 $,08 Investments income and loss consist of the following for the six months period ended December, 06: Investment income (loss): Interest and dividend income $ 5,7 Other-than-temporary increase in valueof investments 6,06 Management periodically evaluates portfolio investments with unrealized losses in order to determine whether such lossesshould beconsidered other-than-temporary in accordance with NAIC SSAP. In the case of fixed income securities, the following is considered: o Theissuer's historical credit rating. o Changes in the open market interest rates. o Historical of interest payments for each security. o Historical evaluation of its market value o The financial condition and prospects of the issuer, including any specific events that may influence the operations of the issuer o Historical evaluation of its market value. o A significant deterioration in the earnings performance, asset quality, or business prospects of the issuer o A significant adverse change in the regulatory, economic, or technological environment of the issuer o A significant adverse change in the general market condition of either the geographic area or the industry in which the issuer operates. Factors that raise significant concerns about the issuer's ability to continue as an ongoing concern, such asnegative cash flows from operations, working capital deficiencies, or noncompliance with statutory capital requirements or debt covenants, as applicable. o The Plan Management's ability and intention to hold the investment for a reasonable time until it recovers a reasonable amount of it cost. Note - Related parties transactions Plan de Salud Menonita, Inc. serves as a third party administrator of the Health Plan program (ASO) for the employees of Mennonite General Hospital, Inc. Note - Pension plan The Hospital sponsors a qualified contributory defined benefit pension plan, which covers 6.

24 substantially all of its employees, including the Plan's employees. Information relating to the Plan's pension cost, projected benefit obligation and assets is not available per division. The Hospital does not charge pension cost to the Plan during the six months period ended December, 06. Note 5 - Health Insurance Portability and Accountability Act The Health Insurance Portability and Accountability Act (HIPAA) was enacted in August 996 to assure health insurance portability, reduce healthcare fraud and abuse, guarantee security and privacy of health information and enforce standards for health information. It also places requirements on health maintenance organizations. Organizations aresubject to significant fines and penalties if found not to bein compliance with the provisions outlined in the regulations. The Plan's management believes to be in compliance pursuant to HIPAA requirements. Note 6 - Concentrations of credit risk Concentrations of credit risk and financial instruments Financial instruments that may potentially subject the Plan to concentrations of credit risk consist principally of cashand cash equivalents, accountsreceivable and state guaranty fund deposit. Cash and cash equivalents At December, 06, the Plan has bank balances, which not exceeded Federal Deposit Insurance Corporation limits. Thisfinancial institution has strong credit ratings and the Plan's management believes that credit risk related to these deposits is minimal. Investments As of December, 06, the Plan has placed most of its investments in some instruments for which market value determination may involve estimates that could be significantly impacted by the current economic conditions. Other issues to consider include other than temporary impairment issues including estimates of the timing and amount of cash flows and the extent of deterioration in the issuer's creditworthiness, even though the Plan may have the ability to hold securities to recovery. Accounts receivable Substantially all of the Plan's business activity and premiums receivable are derived from subscribers located in the central region of Puerto Rico and, as such, the Plan is subject to the risks of the Puerto Rico region's economy. The Plan does not require collateral to guarantee its premiums receivable. The mix of premiums receivable from subscribers at December, 06 is as follows:

25 Government group 5% Other groups 6% Cooperatives % 00% Note 7 - Risk and uncertainties Dependency When needed, the Hospital supports the Plan on any short-term operating capital and administrative needs. Legal proceedings Because of the nature of the business, the Plan is routinely made party to a variety of legal actions related to the design and management of its service offerings. The Plan records liabilities for estimates of probable costs resulting from these matters where appropriate. These matters include, but arenot limited to, claims relating to health care benefits coverage, medical malpractice actions, contract disputes, and claims related to certain other business practices. Although the outcomes of any suchlegal actions cannot be predicted, in the opinion of management, the resolution of any currently pending or threatened actions will not have a material adverse effect on the accompanying statutory-basis financial statements of the Plan. Deficiency reserve Under certain contracts, a deficiency reserve shall be established when the expected claim payments or incurred costs, claim adjustment expenses and administration costs might exceed the premiums to be collected for the remaining period of the contract. Determination of said amounts can be difficult and subject to consideration of variable factors surrounding the assumptions used to determine the liability due to uncertainties inherent in the estimation and assumption process. It is reasonably possible that changes in the estimates and assumptions could be material to the statutory-based financial statements. Audits from regulatory agencies The Plan's business is regulated at the state levels. The laws and rules governing the Plan's business and interpretations of those laws and rules aresubject to frequent change. Broad latitude is given to the agencies administering those regulations. Further, the Plan must obtain and maintain regulatory approvals to market and sellmany of its products. ThePlan has been, and is currently involved, in routine audits and reviews by the Office of the Puerto Rico Insurance Commissioner, and other governmental authorities. These audits and reviews can result in assessment of fines or penalties, or other sanctions, including loss of the 6.6