Commissioner Nickel Announces Successful Conclusion of the Rehabilitation of the Segregated Account of Ambac Assurance
Wisconsin Court Confirms Plan Which Contemplates Paying Policyholders Full Amount of Principal Claims
Court Order Concludes Process to Protect Policyholders Which Began in 2010
Madison, WI—Today, Wisconsin Commissioner of Insurance Ted Nickel, acting in his capacity as Rehabilitator of the Segregated Account of Ambac Assurance Corporation (Segregated Account), announced the Honorable Richard G. Niess of the Circuit Court of Dane County confirmed the Rehabilitator's Second Amendment Plan (Plan) and related Consensual Transaction, thereby concluding this rehabilitation process.
Under terms of the Plan, OCI ensured all holders of policies in the Segregated Account would be satisfying obligations from existing claimants, fulfilling its goals stated at the outset of this process in 2010.
"We are pleased to have successfully concluded a process, which protected all policyholders by ensuring full compensation on the principal amounts of their claims," said Wisconsin Insurance Commissioner Ted Nickel. "Furthermore, we were successful in avoiding an unnecessary and potentially devastating liquidation, which would have seen policyholders paid just pennies on the dollar. Rehabilitation of the Segregated Account also avoided elimination of an insurance competitor from the state. Ultimately, this avoided hurting Wisconsin's competitive marketplace and consumers seeking insurance options."
The Segregated Account was established by Ambac Assurance Corporation (AAC) on March 24, 2010, to segregate certain liabilities presenting serious financial hazards to the company and all of its policyholders. At the time, approximately 700 in-force policies covering a net par outstanding amount of approximately $50 billion were in the Segregated Account.
"I would like to take this opportunity to congratulate and thank Special Deputy Commissioner Dan Schwartzer, Steven Junior, Richard Wicka, and our financial team for their focus and dedication to ensuring a successful conclusion of this rehabilitation process," continued Commissioner Nickel.
OCI closely monitored AAC's capital position and financial health since the subprime mortgage crisis began resonating through the national economy beginning in 2007. The economic downturn, combined with AAC's substantial investment in, and insurance of, mortgage-related exposures particularly damaged AAC's business and financial position.
AAC is domiciled in Wisconsin and is regulated by OCI. AAC's parent company, Ambac Financial Group Inc., headquartered in New York, is not regulated by OCI and is not subject to the terms of the Plan.
Court Order Attachment
Created by the Legislature in 1870, Wisconsin's Office of the Commissioner of Insurance (OCI) was vested with broad powers to ensure that the insurance industry responsibly and adequately met the insurance needs of Wisconsin citizens. Today, OCI's mission is to lead the way in informing and protecting the public and responding to its insurance needs.