Subsequent Event

12 Months Ended

Dec. 31, 2012

Subsequent Event

17. SUBSEQUENT EVENT

During 2002 and 2003 Ambac recognized investment realized losses of approximately $150,000 relating to its $174,500 investment in asset-backed notes issued by National Century Financial Enterprises, Inc. (“NCFE”). These notes, which were backed by health care receivables and rated triple-A until October 25, 2002, defaulted and NCFE filed for protection under Chapter 11 of the U.S. Bankruptcy Code in November 2002. In connection with a full and final settlement of a lawsuit brought by NCFE bondholders against Credit Suisse Securities LLC, a subsidiary of Ambac Assurance expects to receive cash recoveries of approximately $40,000 in April 2013. This recovery will be recognized within net income in 2013.