NEW YORK (

TheStreet

) --

Ambac Financial Group

(ABK)

missed yesterday's deadline for filing statutory financial statements of subsidiary Ambac Assurance Corp., spokesman Peter Poillon confirmed today.

Poillon said third-quarter statements weren't yet completed but may be filed today. He declined to comment further. Wisconsin Office of the Commissioner of Insurance Sean Dilweg couldn't confirm whether an extension had been granted to the beleaguered bond insurer.

Legislation that gives Ambac $400 million in back-dated tax refunds was approved Friday. Ambac expects to receive those funds within 90 days, Poillon said.

The statutory filing is important because it will provide figures upon which the Wisconsin insurance regulator will base his decision on taking regulatory action, up to and including placing Ambac under regulatory control. In stock-market trading today, Ambac fell 4% to 72 cents, bringing a decline to 42% this year.

At the end of the second quarter, Ambac's capital and surplus level was $305.6 million, compared with $1.6 billion six months earlier. If, as expected, that level has deteriorated, it's possible the company will be required to raise money within a certain time frame, usually a month or two.

When the tax refund is received, it will be applied to the capital and surplus of Ambac Assurance via a tax-sharing agreement with Ambac Financial, according to Chief Financial Officer Sean Leonard. It remains to be seen whether that infusion of capital is sufficient to influence the insurance regulator to delay taking at least some level of regulatory action.

Following the receipt of Ambac's third-quarter financial statements, the commissioner should review the existing plan and could ask for a revision. He could then issue an order specifying corrective actions if risk-based capital levels don't meet minimum levels. The commissioner could even seize control of the company.

If that were to happen, debt defaults would follow, requiring the repayment of $1.6 billion and the potential termination of credit default swap contracts, according to Ambac. That would most likely lead to a bankruptcy filing. The balance between protecting policyholders and the consequences of taking action would be at the forefront of the Wisconsin commissioner's mind and, as indicated yesterday by

CreditSights

analyst Rob Haines, even with a risk-based capital deficit, there may be no action taken.

Reported by Gavin Magor in Jupiter, Fla.

Gavin Magor joined TheStreet.com Ratings in 2008, and is the senior analyst responsible for assigning financial strength ratings to health insurers and supporting other health care-related consumer products, including Medicare supplement insurance, long-term care insurance and elder care information. He conducts industry analysis in these areas. He has more than 20 years' international experience in credit risk management, commercial lending and analysis, working in the U.K., Sweden, Mexico, Brazil and the U.S. He holds a master's degree in business administration from The Open University in the U.K.