While bond insurer Ambac Assurance Corp. (AAC) has been paying policyholder claims for the last several years, its related segregated account branch has not been doing so. On Wednesday the Wisconsin Commissioner of Insurance applied to a Wisconsin court for the segregated account to make cash payments to policyholders for 25% of claims.
After the economic downturn the segregated account was created to hold poorly performing Ambac assets. Most of these were MBS. The account also holds bonds connected with the now-bankrupt Las Vegas Monorail.