the company 's critical accounting policies and estimates are as follows : financial guarantee insurance losses and loss expenses : the loss and loss expense reserves for financial guarantee insurance discussed herein relates only to ambac 's non-derivative insurance business for insurance policies issued to beneficiaries , including vies , for which we do not consolidate the vie . losses and loss expenses are based upon estimates of the ultimate aggregate losses inherent in the non-derivative financial guarantee portfolio as of the reporting date . the evaluation process for determining the level of reserves is subject to certain estimates and judgments . asc topic 944 , financial servicesinsurance clarifies how existing guidance applies to financial guarantee insurance contracts issued by insurance enterprises , including the recognition and measurement of claim liabilities ( i.e . , loss reserves ) . ambac adopted the loss reserve provisions of asc topic 944 on january 1 , 2009. asc topic 944 is required to be applied to inforce financial guarantee insurance contracts issued upon adoption as well as new financial guarantee contracts issued in the future . under asc topic 944 , a loss reserve is recorded on the balance sheet for the excess of : ( a ) the present value of expected net cash outflows to be paid under an insurance contract , ( i.e . , the expected loss ) , over ( b ) the unearned premium reserve ( upr ) for that contract . to the extent ( a ) is less than ( b ) , no loss reserve is recorded . changes to the loss reserve estimate in subsequent periods are recorded as a loss and loss expense on the income statement . expected losses are based upon estimates of the ultimate aggregate losses inherent in the non-derivative financial guarantee portfolio as of the reporting date . the evaluation process for determining expected losses is subject to certain estimates and judgments based on our assumptions regarding the probability of default and expected severity of performing credits as well as our active surveillance of the insured book of business and observation of deterioration in the obligor 's credit standing . ambac 's loss reserves are based on management 's on-going review of the non-derivative financial guarantee credit portfolio . active surveillance of the insured portfolio enables ambac 's surveillance group to track credit migration of insured obligations from period to period and update internal credit ratings for each transaction . non-adversely classified credits are assigned a class i or survey list ( sl ) risk classification , while adversely classified credits are assigned a risk classification of class ia through class v. the criteria for an exposure to be assigned an adversely classified credit includes the deterioration of an issuer 's financial condition , underperformance of the underlying collateral ( for collateral dependent transactions such as mortgage-backed securitizations ) , poor performance by the servicer of the underlying collateral and other adverse economic events or trends . the servicer of the underlying collateral of an insured securitization transaction is a consideration in assessing credit quality because the servicer 's performance can directly impact the performance of the related issue . for example , a servicer of a mortgage-backed securitization that does not remain current in its collection and loss mitigation efforts could cause an increase in delinquencies and potential defaults of the underlying obligations . similarly , loss severities increase when a servicer does not effectively handle loss mitigation activities such as ( i ) the advancing of delinquent principal and interest and default-related expenses which are deemed to be recoverable by the servicer , ( ii ) pursuit of loan charge-offs which maximize cash flows from the mortgage loan pool , and ( iii ) foreclosure and real estate owned disposition strategies and timelines . 46 the population of credits evaluated in ambac 's loss reserve process are ( i ) all adversely classified credits ( class ia through v ) and ( ii ) non-adversely classified credits ( class i and sl ) which have been downgraded since the transaction 's inception . one of two approaches is then utilized to estimate expected losses to ultimately determine if a loss reserve should be established . the first approach is a statistical expected loss approach , which considers the likelihood of all possible outcomes . the base case statistical expected loss is the product of : ( i ) the net par outstanding on the credit ; ( ii ) internally developed historical default information ( taking into consideration internal ratings and average life of an obligation ) ; ( iii ) internally developed loss severities ; and ( iv ) a discount factor . the loss severities and default information are based on rating agency information , are specific to each bond type and were established and approved by ambac 's senior management . for certain credit exposures , ambac 's additional monitoring and loss remediation efforts may provide information relevant to adjust this estimate of base case statistical expected losses . as such , the loss severities used in estimating the base case statistical expected losses may be adjusted based on the professional judgment of the surveillance analyst monitoring the credit with the approval of senior management . analysts may accept the base case statistical expected loss as the best estimate of expected loss or assign multiple probability weighted severities to determine an adjusted statistical expected loss that better reflects a given transaction 's potential severity . the second approach entails the use of more precise estimates of expected net cash outflows ( future claim payments , net of potential recoveries , expected to be paid to the holder of the insured financial obligation ) . ambac 's surveillance group will consider the likelihood of various possible outcomes and develop cash flow scenarios . this approach can include the utilization of internal or external models to project net claim payment estimates . story_separator_special_tag ambac 's estimate of subrogation recoveries includes two components : ( 1 ) estimated dollar amounts of loans with material breaches of representations and warranties based on an extrapolation of the breach rate identified in a random sample of loans taken from the entire population of loans in a securitization ( random sample approach ) ; and ( 2 ) dollar amount of actual loans with identified material breaches of representations and warranties discovered from samples of impaired loans in a securitization ( adverse sample approach ) . we do not include estimates of damages in our estimate of subrogation recoveries under either approach . the amount the sponsors believe to be their liability for these breaches is not known ; however , certain large financial institutions who have served as sponsors for certain transactions that ambac has insured have disclosed that reserves have been established related to claims by financial guarantors and others for breaches of representations and warranties . 51 the random sample approach to estimate subrogation recoveries was based on obtaining a statistically valid random sample for all the original loans in the pool . first , a breach rate was computed by dividing ( i ) the loans identified in sample as having breached representations and warranties by ( ii ) the total sample size . second , an extrapolation to the entire loan pool was performed by multiplying the breach rate by the sum of ( a ) the current unpaid loan pool balance ( culpb ) plus ( b ) realized losses resulting from loan liquidations or charge-offs to date , to compute an estimated repurchase obligation . the culpb includes principal only on non-charged-off and non-liquidated loans , and the realized losses include principal , interest and unreimbursed servicer advances and or trustee expenses on charged-off and liquidated loans . as a result , the culpb and realized loss components , which are used in extrapolating the estimated repurchase obligation , do not precisely correspond to each sponsor 's contractual repurchase obligation as defined in the transaction documents . nonetheless , the culpb and realized loss components are provided through trustee reports we receive in the normal course of our surveillance of these transactions and is the best information we have available to estimate the sponsor 's repurchase obligation under the random sample approach . third , a realization factor ( which incorporates ambac 's views about the uncertainties surrounding the litigation process and or settlement negotiation ) was then applied to the estimated repurchase obligation to compute the undiscounted subrogation recovery . the realization factor was developed from a range of realization factors using ambac 's own assumptions about the likelihood of outcomes based on all the information available to it including ( i ) discussions with external legal counsel and their views on ultimate settlement , ( ii ) recent experience with loan put back negotiations where the existence of a material breach was debated and negotiated at the loan level , and ( iii ) the pervasiveness of the breach rates . finally , a discount factor was applied ( using the assumptions discussed in the paragraph subsequent to the next table below ) to the undiscounted subrogation recovery to compute the estimated subrogation recovery . due to the nature of the sampling methodology used , the subrogation recovery estimate ambac has recorded based on the above-described random sample approach includes all breached loans which ambac believes the sponsor is contractually required to repurchase , including extrapolation to a loan pool which includes loans which have not defaulted , and , in fact , may not default in the future ( i.e . performing loans ) . in theory , a loan that continues to perform in accordance with its terms through repayment should have little or no effect on ambac 's anticipated claim payments , regardless of whether or not the sponsor repurchases the loan . in other words , since there will be sufficient cash flows to service the notes in either situation ( i.e . whether cash is received from a sponsor loan repurchase or whether cash is received from the underlying performing loan ) , there should be no claim payment under ambac 's insurance policy in respect of such loans . nonetheless , ambac may have recorded a subrogation recovery for certain performing loans because it believes the breaches of representations and warranties are so pervasive that a court would deem it impractical to have the sponsor re-underwrite every loan in a given transaction and repurchase only individual loans that have breached . rather , ambac believes there is precedent for the utilization of a statistical sampling and extrapolation methodology across a population to prove liability and damages where it would be impractical to make a determination on an individual loan basis ( a recent court ruling in a similar suit unrelated to ambac but in the same jurisdiction in which ambac has filed its litigation to date , supports the view that a sampling methodology is permissible . ) ambac believes a court would likely award damages based on a reasonable methodology , such as our random sample approach , which damages would be either remitted directly to ambac , placed in the securitization trust , or otherwise held under an arrangement for the benefit of the securitization trust ; however , ambac believes that under such an approach individual loans would not be repurchased from the trust . in either case , ambac believes those damages would compensate ambac for past and future claim payments . consequently , since the sponsor is contractually obligated to repurchase those loans which breach representations and warranties regardless of whether they are current or defaulted , ambac believes the appropriate measure in estimating subrogation recoveries is to apply the breach rate to both performing and defaulted loans . the adverse sample approach to estimate subrogation recoveries was based on a sample taken from those loans in the

cash flows . as a result of ambac 's bankruptcy filing on november 8 , 2010 , ambac 's pre-petition obligations are reported as liabilities subject to compromise in the consolidated balance sheets which will be disbursed in accordance with our plan of reorganization , including future interest on ambac 's debentures . additionally , since august 15 , 2009 , ambac has deferred interest payments on its $ 400 million of directly issued subordinated capital securities due 2087. by deferring interest payments on the discs , ambac reduced its 2010 cash debt service requirements by $ 24.6 million . net cash used in operating activities was ( $ 2,087.0 ) million , ( $ 1,877.3 ) million and ( $ 845.7 ) million during 2010 , 2009 and 2008 , respectively . operating cash flows were negatively impacted by cds loss payments , net of recoveries from hedge counterparties , of $ 2,789.0 million , including the settlement agreement of cdo of abs , partially offset the reduction in insurance losses paid as a result of the claim moratorium with respect to the rehabilitation of the segregated account ( $ 1,411.4 million of claims presented but not paid in 2010 ) .


 Write a concise suspicious activity report of the following text delimited by triple backquotes. Return your response as a formal report which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.
     ```cash flows . as a result of ambac 's bankruptcy filing on november 8 , 2010 , ambac 's pre-petition obligations are reported as liabilities subject to compromise in the consolidated balance sheets which will be disbursed in accordance with our plan of reorganization , including future interest on ambac 's debentures . additionally , since august 15 , 2009 , ambac has deferred interest payments on its $ 400 million of directly issued subordinated capital securities due 2087. by deferring interest payments on the discs , ambac reduced its 2010 cash debt service requirements by $ 24.6 million . net cash used in operating activities was ( $ 2,087.0 ) million , ( $ 1,877.3 ) million and ( $ 845.7 ) million during 2010 , 2009 and 2008 , respectively . operating cash flows were negatively impacted by cds loss payments , net of recoveries from hedge counterparties , of $ 2,789.0 million , including the settlement agreement of cdo of abs , partially offset the reduction in insurance losses paid as a result of the claim moratorium with respect to the rehabilitation of the segregated account ( $ 1,411.4 million of claims presented but not paid in 2010 ) .
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 Suspicious Activity Report : the company 's critical accounting policies and estimates are as follows : financial guarantee insurance losses and loss expenses : the loss and loss expense reserves for financial guarantee insurance discussed herein relates only to ambac 's non-derivative insurance business for insurance policies issued to beneficiaries , including vies , for which we do not consolidate the vie . losses and loss expenses are based upon estimates of the ultimate aggregate losses inherent in the non-derivative financial guarantee portfolio as of the reporting date . the evaluation process for determining the level of reserves is subject to certain estimates and judgments . asc topic 944 , financial servicesinsurance clarifies how existing guidance applies to financial guarantee insurance contracts issued by insurance enterprises , including the recognition and measurement of claim liabilities ( i.e . , loss reserves ) . ambac adopted the loss reserve provisions of asc topic 944 on january 1 , 2009. asc topic 944 is required to be applied to inforce financial guarantee insurance contracts issued upon adoption as well as new financial guarantee contracts issued in the future . under asc topic 944 , a loss reserve is recorded on the balance sheet for the excess of : ( a ) the present value of expected net cash outflows to be paid under an insurance contract , ( i.e . , the expected loss ) , over ( b ) the unearned premium reserve ( upr ) for that contract . to the extent ( a ) is less than ( b ) , no loss reserve is recorded . changes to the loss reserve estimate in subsequent periods are recorded as a loss and loss expense on the income statement . expected losses are based upon estimates of the ultimate aggregate losses inherent in the non-derivative financial guarantee portfolio as of the reporting date . the evaluation process for determining expected losses is subject to certain estimates and judgments based on our assumptions regarding the probability of default and expected severity of performing credits as well as our active surveillance of the insured book of business and observation of deterioration in the obligor 's credit standing . ambac 's loss reserves are based on management 's on-going review of the non-derivative financial guarantee credit portfolio . active surveillance of the insured portfolio enables ambac 's surveillance group to track credit migration of insured obligations from period to period and update internal credit ratings for each transaction . non-adversely classified credits are assigned a class i or survey list ( sl ) risk classification , while adversely classified credits are assigned a risk classification of class ia through class v. the criteria for an exposure to be assigned an adversely classified credit includes the deterioration of an issuer 's financial condition , underperformance of the underlying collateral ( for collateral dependent transactions such as mortgage-backed securitizations ) , poor performance by the servicer of the underlying collateral and other adverse economic events or trends . the servicer of the underlying collateral of an insured securitization transaction is a consideration in assessing credit quality because the servicer 's performance can directly impact the performance of the related issue . for example , a servicer of a mortgage-backed securitization that does not remain current in its collection and loss mitigation efforts could cause an increase in delinquencies and potential defaults of the underlying obligations . similarly , loss severities increase when a servicer does not effectively handle loss mitigation activities such as ( i ) the advancing of delinquent principal and interest and default-related expenses which are deemed to be recoverable by the servicer , ( ii ) pursuit of loan charge-offs which maximize cash flows from the mortgage loan pool , and ( iii ) foreclosure and real estate owned disposition strategies and timelines . 46 the population of credits evaluated in ambac 's loss reserve process are ( i ) all adversely classified credits ( class ia through v ) and ( ii ) non-adversely classified credits ( class i and sl ) which have been downgraded since the transaction 's inception . one of two approaches is then utilized to estimate expected losses to ultimately determine if a loss reserve should be established . the first approach is a statistical expected loss approach , which considers the likelihood of all possible outcomes . the base case statistical expected loss is the product of : ( i ) the net par outstanding on the credit ; ( ii ) internally developed historical default information ( taking into consideration internal ratings and average life of an obligation ) ; ( iii ) internally developed loss severities ; and ( iv ) a discount factor . the loss severities and default information are based on rating agency information , are specific to each bond type and were established and approved by ambac 's senior management . for certain credit exposures , ambac 's additional monitoring and loss remediation efforts may provide information relevant to adjust this estimate of base case statistical expected losses . as such , the loss severities used in estimating the base case statistical expected losses may be adjusted based on the professional judgment of the surveillance analyst monitoring the credit with the approval of senior management . analysts may accept the base case statistical expected loss as the best estimate of expected loss or assign multiple probability weighted severities to determine an adjusted statistical expected loss that better reflects a given transaction 's potential severity . the second approach entails the use of more precise estimates of expected net cash outflows ( future claim payments , net of potential recoveries , expected to be paid to the holder of the insured financial obligation ) . ambac 's surveillance group will consider the likelihood of various possible outcomes and develop cash flow scenarios . this approach can include the utilization of internal or external models to project net claim payment estimates . story_separator_special_tag ambac 's estimate of subrogation recoveries includes two components : ( 1 ) estimated dollar amounts of loans with material breaches of representations and warranties based on an extrapolation of the breach rate identified in a random sample of loans taken from the entire population of loans in a securitization ( random sample approach ) ; and ( 2 ) dollar amount of actual loans with identified material breaches of representations and warranties discovered from samples of impaired loans in a securitization ( adverse sample approach ) . we do not include estimates of damages in our estimate of subrogation recoveries under either approach . the amount the sponsors believe to be their liability for these breaches is not known ; however , certain large financial institutions who have served as sponsors for certain transactions that ambac has insured have disclosed that reserves have been established related to claims by financial guarantors and others for breaches of representations and warranties . 51 the random sample approach to estimate subrogation recoveries was based on obtaining a statistically valid random sample for all the original loans in the pool . first , a breach rate was computed by dividing ( i ) the loans identified in sample as having breached representations and warranties by ( ii ) the total sample size . second , an extrapolation to the entire loan pool was performed by multiplying the breach rate by the sum of ( a ) the current unpaid loan pool balance ( culpb ) plus ( b ) realized losses resulting from loan liquidations or charge-offs to date , to compute an estimated repurchase obligation . the culpb includes principal only on non-charged-off and non-liquidated loans , and the realized losses include principal , interest and unreimbursed servicer advances and or trustee expenses on charged-off and liquidated loans . as a result , the culpb and realized loss components , which are used in extrapolating the estimated repurchase obligation , do not precisely correspond to each sponsor 's contractual repurchase obligation as defined in the transaction documents . nonetheless , the culpb and realized loss components are provided through trustee reports we receive in the normal course of our surveillance of these transactions and is the best information we have available to estimate the sponsor 's repurchase obligation under the random sample approach . third , a realization factor ( which incorporates ambac 's views about the uncertainties surrounding the litigation process and or settlement negotiation ) was then applied to the estimated repurchase obligation to compute the undiscounted subrogation recovery . the realization factor was developed from a range of realization factors using ambac 's own assumptions about the likelihood of outcomes based on all the information available to it including ( i ) discussions with external legal counsel and their views on ultimate settlement , ( ii ) recent experience with loan put back negotiations where the existence of a material breach was debated and negotiated at the loan level , and ( iii ) the pervasiveness of the breach rates . finally , a discount factor was applied ( using the assumptions discussed in the paragraph subsequent to the next table below ) to the undiscounted subrogation recovery to compute the estimated subrogation recovery . due to the nature of the sampling methodology used , the subrogation recovery estimate ambac has recorded based on the above-described random sample approach includes all breached loans which ambac believes the sponsor is contractually required to repurchase , including extrapolation to a loan pool which includes loans which have not defaulted , and , in fact , may not default in the future ( i.e . performing loans ) . in theory , a loan that continues to perform in accordance with its terms through repayment should have little or no effect on ambac 's anticipated claim payments , regardless of whether or not the sponsor repurchases the loan . in other words , since there will be sufficient cash flows to service the notes in either situation ( i.e . whether cash is received from a sponsor loan repurchase or whether cash is received from the underlying performing loan ) , there should be no claim payment under ambac 's insurance policy in respect of such loans . nonetheless , ambac may have recorded a subrogation recovery for certain performing loans because it believes the breaches of representations and warranties are so pervasive that a court would deem it impractical to have the sponsor re-underwrite every loan in a given transaction and repurchase only individual loans that have breached . rather , ambac believes there is precedent for the utilization of a statistical sampling and extrapolation methodology across a population to prove liability and damages where it would be impractical to make a determination on an individual loan basis ( a recent court ruling in a similar suit unrelated to ambac but in the same jurisdiction in which ambac has filed its litigation to date , supports the view that a sampling methodology is permissible . ) ambac believes a court would likely award damages based on a reasonable methodology , such as our random sample approach , which damages would be either remitted directly to ambac , placed in the securitization trust , or otherwise held under an arrangement for the benefit of the securitization trust ; however , ambac believes that under such an approach individual loans would not be repurchased from the trust . in either case , ambac believes those damages would compensate ambac for past and future claim payments . consequently , since the sponsor is contractually obligated to repurchase those loans which breach representations and warranties regardless of whether they are current or defaulted , ambac believes the appropriate measure in estimating subrogation recoveries is to apply the breach rate to both performing and defaulted loans . the adverse sample approach to estimate subrogation recoveries was based on a sample taken from those loans in the

