MADISON, Wis., March 25 /PRNewswire/ --The Wisconsin Office of
the Commissioner of Insurance (OCI) today filed a petition to take
control of and to rehabilitate the Segregated Account of Ambac
Assurance Corporation (Segregated Account). The Segregated Account
was established in order to segregate certain liabilities of Ambac
Assurance Corporation (AAC).
In order to provide a durable solution for all policyholders,
the OCI filed the petition for rehabilitation with the Honorable
William D. Johnston of the Lafayette County Circuit Court in
Wisconsin. AAC is domiciled
in Wisconsin. AAC's parent
company, Ambac Financial Group Inc. (NYSE: ABK) is headquartered in
New York and is not regulated by
the OCI and isn't directly included in the OCI's plan for
rehabilitation.
Commissioner Dilweg, as Rehabilitator, received court approval
to impose a temporary moratorium on further claim payments to
Segregated Account policyholders pending approval of a plan of
rehabilitation.
Policies that are not transferred to the Segregated Account will
remain in AAC. Under Wisconsin law, the Segregated Account is
treated as a separate insurer from AAC for purposes of
rehabilitation. As a result, the rehabilitation of the
Segregated Account does not require a rehabilitation of AAC as a
whole.
"I am taking action to protect policyholders, including
investors in thousands of state and local municipal bond issues and
other public finance securities, who rely on AAC's guaranty," said
Wisconsin Insurance Commissioner Sean
Dilweg. "I have a concrete plan for rehabilitation,
and details will be reviewed in court over the coming weeks."
The OCI has been closely monitoring AAC's capital position and
financial health since the subprime mortgage crisis began
resonating through the economy more than two years ago. The
economic downturn, combined with AAC's substantial investment in,
and insurance of, mortgage-related exposures damaged AAC's business
and financial position and reduced its claims-paying resources.
These events created a potential financial hazard to
policyholders, creditors, and the public. There also has been
a steady, significant increase in AAC's projected loss
impairments.
"I am implementing a durable solution for all policyholders
while maximizing AAC's resources, pursuant to OCI's regulatory
authority," said Commissioner Dilweg. "For nearly two years,
I have worked closely with AAC's board and management, and outside
advisors, to address the pressing challenges facing the
Company."
In connection with the filing, the Court appointed Kimberly
Shaul Special Deputy Rehabilitator for the Rehabilitation of the
Segregated Account. Ms. Shaul presently is the Deputy Commissioner
of the Wisconsin Office of the Commissioner of Insurance, a
position she has held since early 2007.
"My goal at every step along the way has been and will continue
to be the provision of a durable solution for all AAC's
policyholders," said Commissioner Dilweg.
For more information on the rehabilitation of Ambac Assurance
Corp., including official filings, background information and an
extensive Q&A, please refer to www.ambacpolicyholders.com
Please direct additional queries as follows:
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Policyholders
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www.ambacpolicyholders.com/questions
(or)
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policyholder@ambacpolicyholders.com
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from within the U.S.:
877-301-2046
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from outside the
U.S.: 212-660-6373
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About OCI: Created by the Legislature in 1871, 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.
SOURCE Wisconsin Office of the Commissioner of Insurance