The Wisconsin Office of the Commissioner of Insurance (OCI) has obtained confirmation of its Plan of Rehabilitation for the Segregated Account of Ambac Assurance Corporation in Dane County Circuit Court in Wisconsin. Absent further orders by this or other courts, the Segregated Account expects to promptly begin processing allowed claims under the terms of the Plan of Rehabilitation upon satisfaction of certain conditions in the plan.

Once the plan takes effect, holders of permitted policy claims will receive 25% of their permitted claims in cash and 75% in surplus notes bearing interest at the rate of 5.1% per year with a scheduled maturity on 7 June 2020. The decision to adopt a 25/75 split was guided by the need to preserve sufficient cash to pay all valid policy claims, including those may arise in the future. The cash/note ratio may be adjusted in conjunction with a yearly assessment of liabilities and claims-paying resources.

Substantially all claims-paying resources of AAC will be available to pay claims of policyholders whose policies have been allocated to the Segregated Account. As of October 2010, approximately 700 in-force policies covering a net par outstanding amount of approximately US$50bn were held in the Segregated Account.