Heirs of Holocaust Victims Sue Insurer

The family of five Holocaust victims filed a $135-million lawsuit Wednesday in Los Angeles Superior Court alleging that an Italian insurance company has refused to honor decades-old policies.

The suit alleges that Assicurazioni Generali acted in bad faith when it refused to pay benefits on policies issued beginning in 1929 to Moshe “Mor” Stern, a leading wine producer in what was then Czechoslovakia.

Stern, his wife and three of their seven children died in the gas chamber at Auschwitz. The family has made about half a dozen attempts to collect on the policy, but for 53 years the company has refused to pay, Los Angeles businessman Alan Stern said at a news conference Wednesday at the Simon Wiesenthal Center in West Los Angeles.

Flanked by an aunt who is a Holocaust survivor, his wife and a black-and-white 1930s photo of his grandparents, Mor and Regina Stern, 42-year-old Alan Stern said his family had placed its trust in Generali. But, he said, “This trust was cruelly betrayed.” His aunt Anne Stern, 55, of Beverly Hills added: “This is not charity. This is our due.”

Later Wednesday, a lawyer for the company said Generali owes the Sterns nothing.

The lawsuit is the first filed in U.S. courts by a family alleging the wrongful withholding of life insurance benefits from policies issued to those who died in the Holocaust--in which the Nazis executed 6 million people, most of them Jews.

The suit seeks $10 million in insurance claims and $125 million in punitive damages. “The heirs of the Holocaust are frankly disgusted with Generali and its affiliates for doing business as usual,” said Alan Stern’s wife, Lisa, a Los Angeles attorney. She and Claremont lawyer William M. Shernoff, a nationally recognized expert in insurance bad-faith cases, filed the suit.

In recent months, efforts to seek redress from European insurance companies have gained momentum as Holocaust survivors race against time, against what some have called the “biological solution” to outstanding claims--in which policyholders die of old age.

Last year, a class-action lawsuit was filed in New York federal court against 16 European insurers. And in the wake of hearings held in recent weeks in Los Angeles and San Francisco, California Insurance Commissioner Chuck Quackenbush issued subpoenas Monday to Generali, ordering the company to appear Feb. 19 at an investigatory hearing in San Francisco.

Quackenbush, a member of a National Assn. of Insurance Commissioners task force on the issue of unpaid Holocaust-era claims, also appeared Wednesday at the Wiesenthal Center and said he could bar Generali from doing business in the state if he finds it acted in bad faith.

Generali handles about $22 million annually in premiums in California and about $125 million in the United States, Quackenbush said.

The company issued a statement later Wednesday that said it had been working in good faith with Quackenbush and other state insurance commissioners. It is unfortunate, the statement said, that Quackenbush “opted to serve subpoenas rather than simply ask for a private meeting.”

Generali, founded by Jews in 1831 and based in Trieste, Italy, is the largest insurer in Israel. In June it announced that it would establish a $12-million philanthropic fund to be administered by an administrative committee in Israel in honor of Generali policyholders who died in the Holocaust.

Meanwhile, M. Scott Vayer, Generali’s New York-based attorney, said the Sterns’ policies were among those nationalized by the Communist government of Czechoslovakia in 1945, within months after the end of the war.

That government assumed “all policy obligations,” he said, adding that Generali “respectfully states that it is not legally liable for this policy or others similarly situated.”