May 9, 2000
Insurers Reject Most Claims in Holocaust Cases
By HENRY WEINSTEIN,
EUROPEAN insurers are rejecting three of every four claims submitted on behalf of Holocaust victims seeking to recover on policies purchased between 1930 and 1945, according to internal documents of the international insurance claims settlement commission.
The commission was established in 1998 in hopes of expeditiously resolving contentions that a number of insurers had improperly failed to honor claims filed by Holocaust survivors or the heirs of those who perished. The high rate of rejections is striking, according to U.S. insurance regulators, because the initial claims were submitted by the commission on behalf of individuals considered to have particularly strong cases. Those cases were supposed to be assessed with relaxed standards of proof, on a "fast track" basis instituted by the commission.
"I am very seriously concerned about how the companies have participated in this process," said Deborah Senn, the insurance commissioner for Washington state. "The companies are turning down claims even when they are well documented. If three out of four claims are being rejected in the fast track, how are the larger groups of survivors or their heirs going to see some justice?"
Commission records show that the five companies participating in the international commission have thus far agreed to settle 124 of 909 claims submitted. The companies have rejected 393 claims, and the remainder have been pending for more than 90 days.
Andrew Frank, spokesman for German-based Allianz, one of five companies participating in the international commission, said the numbers are accurate and show "what the companies were saying all along: They will not pay for a claim that is not valid against them, even with lowest common denominator of proof." He said individuals whose claims had been rejected "should theoretically be taken care of" through a separate humanitarian fund that will be administered by the International Commission on Holocaust Era Insurance Claims, headed by former Secretary of State Lawrence S. Eagleburger.
Details on how much money will be provided by the insurance companies for that fund, or who specifically would qualify for payments, are still evolving, according to commission members. Rejected claims are subject to appeal before the commission, but it is not clear when that process will begin or how long it will take. Meanwhile, Holocaust survivors and the children of individuals who were annihilated by the Nazis -- many of whom are in their 70s or older -- continue to die at a rate of about 10 a month. Participation in the commission is voluntary, so it has no formal enforcement power.
The five companies on the commission -- Allianz AG of Germany, Assicurazioni Generali of Italy, Axa of France, and Winterthur and Zurich, both of Switzerland -- wrote about 35% of the policies in Europe during the period from 1930 to 1945. Numerous other insurance companies have declined to participate in the international commission. Although commission officials have not commented publicly on the number of settlement offers made by the insurers, the high percentage of rejected claims has prompted concern inside the commission.
The fast track process is "an issue which is crucial to the credibility of the entire ICHEIC claims process," Geoffrey E. Fitchew, the commission's vice chairman, said in an internal memo. Fitchew also expressed concern that the companies were not adhering to the criteria delineated for the fast track process. For example, he said that in some instances companies had rejected claims on the grounds that the company found no evidence in its records. He noted that some of the companies' records are incomplete. Additionally, Fitchew expressed concern that "the insurers have turned down a number of claims on the ground that the policy claimed was paid or 'probably paid.'"
In cases in which there was clear evidence that the company had paid on a policy, then a new claim on it should be rejected, he said. However, he added, some companies were assuming policies had been paid on the basis of "negative" evidence -- such as the absence of any reference to a policy in a wartime register of unpaid policies. Fitchew said there was reason to question those decisions given how incomplete the companies' records were and the possibility that some companies may have declared policies that were confiscated by the Nazis as paid.
The policies at issue include ones for life, homeowner and dowry insurance. Elan Steinberg, executive director of the World Jewish Congress, said he plans to raise the issue of rejected claims at the commission's next meeting in June in London. "I have found my experience in the international commission as dispiriting; it has been a struggle every step of the way," Steinberg said. Although the commission had posted about 20,000 names on its Internet site for review by potential claimants, Steinberg and several other Jewish leaders said that was far fewer than what could be made available by the companies.
At a hearing in January, several insurers sparred with Washington state insurance officials about the extent of their obligations to turn over policyholder lists. Allianz officials said in Seattle that they should not have to make public all 1.5 million policies they wrote in the period at issue. The company said it already had provided 15,000 names and ultimately would provide 150,000. But Jewish leaders say that full disclosure of all policies is absolutely crucial.
Bobby Brown, the Israeli government representative to the international commission, said in a court declaration that without disclosure of full policyholder lists, "many survivors and their heirs will have no knowledge as to whether their relatives purchased any insurance, whether they are eligible to make a claim, or against what company such a claim should be made." Brown submitted his declaration in support of a 1999 California statute that requires all insurance carriers licensed in the state to provide lists of all the policies they wrote in Europe from 1929 to 1945.
Brown's declaration was included in 800 pages of legal papers filed Monday in Sacramento by Century City attorney Frank Kaplan, special counsel to the California Insurance Commission, seeking dismissal of four federal lawsuits by insurers trying to overturn the law. Kaplan contends that since the companies are resisting paying claims submitted to the international commission, the need for California's law is all the more important. Most of the survivors and heirs of Holocaust victims have no documentary proof of the policies.
In some instances, the relevant papers were seized and destroyed as Jewish people were uprooted from their homes and taken to concentration camps. Heirs would have even less information than the survivors, said Rabbi Abraham Cooper of the Simon Wiesenthal Center in Los Angeles. Sponsored by Assemblyman Wally Knox (D-Los Angeles), the disclosure law is part of a package of bills enacted in California the past two years designed to make it easier for Holocaust survivors to collect on unpaid policies. The statute is being challenged by the American Insurance Assn. -- which includes the five carriers who are members of the commission -- and several individual European insurers, including one that has not joined the commission.
The insurers contend that the law, which passed the Legislature without dissent in 1999, is an illegal attempt to investigate and regulate European insurance companies, based on transactions that took place more than 50 years ago outside California. State officials counter that they have jurisdiction over the companies because they now do business in California.
Knox said that he believed that California Insurance Commissioner Chuck Quackenbush should immediately commence proceedings to remove the licenses of companies not complying with the law. Quackenbush has been publicly critical of the companies for failing to provide the lists but has not attempted to revoke any licenses. While commission officials have not taken a formal position on the insurers' suits, Eagleburger recently signed a declaration, submitted on behalf of the insurers, that states that the five companies who are participating in the commission should be given a "safe harbor" if they are acting "in good faith."
So far, Eagleburger takes the position they are -- a view not shared by large numbers of survivors. Among them is Jack Brauns, a 75-year-old West Covina physician, who grew up in Lithuania. Brauns and his parents were imprisoned in concentration camps during the war and he was liberated from Dachau by U.S. Army troops in 1945.
Brauns' claim stems from a $2,000 life insurance policy his father purchased in 1930 that was guaranteed by Generali, according to a suit Brauns filed in Los Angeles County Superior Court on Monday. Brauns' father died in September 1945. The physician, who moved to California in 1957, said he has made numerous efforts since his father died to collect on the policy.
Last summer, Generali offered Brauns $5,000 to settle his claim, a sum Brauns and his attorney say is ridiculously low considering how long they made him wait and numerous misrepresentations made by the company over the past 55 years.
Harry Wall, a spokesman for Generali, said Brauns' claim was reviewed closely and the company's offer was based on a formula established by the international commission. A spokesman for the international commission said Monday that settlements arranged through the commission have averaged about $10,000. But, said Brauns, "When you get a life insurance policy, you put your trust in the insurance company to honor it. This trust has been violated."
May 9, 2000