Ted Nickel was named commissioner of the Wisconsin insurance office on Tuesday, replacing Sean Dilweg.
Gov. Scott Walker, who assumed office Monday, also appointed Dan Schwartzer as deputy commissioner.
The state Office of the Commissioner of Insurance oversees Ambac Assurance Corp., a junk-rated insurer that has not written new policies in more than two years but continues to maintain the third-largest insured municipal bond portfolio in the industry. That portfolio included $206.6 billion of insured munis at the end of the third quarter.
“As one of the top 10 industries in Wisconsin, insurance plays a vital role in Wisconsin’s economy and the governor’s agenda for growth and job creation,” Nickel said in a press release.
Schwartzer added: “I believe our combined experience will make accomplishing the governor’s vision for the proper level of regulation of insurance a reality in Wisconsin.”
Nickel and Schwartzer were unavailable for additional comment. Spokespersons described them as “settling in.”
Nickel’s experience includes nearly 18 years with Church Mutual Insurance Co. in Merrill, Wis., where he was director of governmental and regulatory affairs.
He also was on the board of directors of the Wisconsin Insurance Alliance and the Wisconsin Insurance Security Fund. He is a member of the Oklahoma Property Casualty Insurance Guaranty Association and previously served with the legal and government affairs committee of the Property Casualty Insurance Association of America.
Schwartzer has spent 28 years in the industry. He began his career as a licensed insurance agent and more recently represented the industry to the legislature as well as regulatory agencies representing various trade associations.
Dilweg, who was insurance commissioner since January 2007, has played a key role in Ambac’s fate since the bond insurer started losing billions of dollars from insuring risky mortgage assets in the years leading up to the 2008 credit crisis.
In March 2010, Dilweg placed about 700 of Ambac’s riskiest policies covering a net par outstanding amount of about $50 billion into a walled-off account.
Claims in the separate account were frozen to stop Ambac from hemorrhaging more than $150 million a month. The rapid deterioration of residential mortgage-backed securities was threatening to dry up the insurer’s claims-paying abilities and leave policyholders of longer-duration debt with a worthless guarantee.
Policyholders of the risky assets that were frozen filed lawsuits to contest the move.
Dilweg spent the last several months of his tenure seeking approval of a rehabilitation plan for the walled-off assets. The proposed plan offers policyholders a quarter of their permitted claims in cash and the rest in notes backed by the insurer’s surplus. The notes bear a 5.1% coupon and mature in 2020.
Ambac’s parent, Ambac Financial Group, filed for bankruptcy in November and was recently delisted from the New York Stock Exchange.