DOC Finds A Reorganization Can Include A Rehabilitation

Until last year, Ambac Assurance, a Wisconsin domiciled insurer, was one of the largest monoline insurers in the world. Originally it insured low-risk, public finance bonds. However, in the 1990s it started to offer financial guarantee insurance on residential mortgage backed securities and collateralized debt obligations of asset-backed securities. Not surprisingly, Ambac was a casualty of the 2008 financial crisis. In response, Ambac stopped writing policies and began an informal run-off.

The separate account and its rehabilitation

In 2010, Ambac created a segregated account for the purpose of isolating certain of its liabilities. The segregated account holds many of the policies against which there are significant existing claims or the likelihood of significant claims. Under Wisconsin insurance law, the segregated account is treated as a separate insurer from Ambac for purposes of rehabilitation. The Wisconsin Office of the Commissioner of Insurance (OCI) filed this petition for a rehabilitation for the segregated account.

Please see full article below for more information.

LOADING PDF: If there are any problems, click here to download the file.

Published In: Bankruptcy Updates, Business Organization Updates, Finance & Banking Updates, Insurance Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Allen Matkins Leck Gamble Mallory & Natsis LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »