Ambac Assurance Corp.’s segregated account won court approval to make cash payments of more than of 25 percent of on certain policies, the company said.
The payments will “maximize the cash reimbursements” and benefit all policyholders, Ambac said today in a statement. The order was approved in a Wisconsin state court, and Ambac expects the payments will begin this month, it said. Ambac in 2011 had court approval to pay claimants 25 percent of their losses in cash.
Ambac Assurance was the second-biggest U.S. bond insurer before the 2008 financial crisis, after which mounting claims spurred by mortgage defaults swamped the company with claims and threatened its viability.
In June 2012, Wisconsin’s insurance commissioner secured court approval of cash payments to policyholders who had filed more than $3 billion in claims.
State Insurance Commissioner Theodore Nickel’s office undertook rehabilitation of a segregated portfolio of Ambac policies covering as much as $50 billion in mortgage-backed securities and other corporate liabilities two years ago.
The case is In re Rehabilitation of Segregated Account of Ambac Assurance Corp., 2010-cv-001576, Dane County, Wisconsin, Circuit Court (Madison).