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Questions & Answers > General > What is Rehabilitation?

The following questions and answers are provided to the general public for informational purposes only. They are not legal documents and do not bind the Segregated Account of Ambac Assurance Corporation, the Office of the Commissioner of Insurance, or the Rehabilitator to any position or interpretation of the rehabilitation court's orders in these proceedings, now or in the future. Interested parties should review the court documents available on this site and consult their own legal counsel with any questions they may have regarding any effect this rehabilitation proceeding may have on their legal rights and obligations.

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Rehabilitation is a proceeding whereby an insurance regulator, with court approval, takes control of a troubled insurer in order to protect the interests of policyholders, creditors, and the public by maximizing claims paying resources, providing a fair and orderly payment procedure, and taking actions to reform and revitalize the insurer. Unlike a bankruptcy reorganization, a rehabilitation is government action intended to establish a durable solution for policyholders.

Here, OCI has taken control of the management of the Segregated Account of AAC, not AAC as a whole. Certain AAC policies and other liabilities were allocated to Segregated Account prior to rehabilitation, which OCI will administer under the orders of the rehabilitation court.

Last updated on March 27, 2010 by Ambac Policyholders Administrator