NEW YORK( TheStreet) -- Ambac Assurance policyholders are concerned that they could lose billions of dollars in Ambac Financial Group's ( ABK) bankruptcy restructuring plan favored by Wisconsin regulators.

A press release issued by the The RMBS Policyholders Group says that regulators favor a plan that would put Ambac's net operating losses on the insurance subsidiary's balance sheet. The plan for rehabilitation can be viewed on a website for Ambac Policy Holders. Ambac Assurance holds policies totaling about $57.6 billion.

"The Group is dismayed to discover that not only has the OCI failed in its statutory obligation to protect policyholders, but arranged behind closed doors with AFG, its management and creditors to strip policyholders of valuable assets," the press release says.

--Written by Maria Woehr in New York.

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