Assembly OKs Holocaust Claim Bill

By a 74-0 vote, the California Assembly passed a bill Thursday that will make it easier for Holocaust survivors and the heirs of people who died in the Holocaust to prevail in lawsuits against European-based insurance companies for payments on World II-era policies.

Having already passed the state Senate without dissent, the measure now heads to Gov. Pete Wilson, who is expected to sign it within two weeks.

The bill permits Holocaust victims and their heirs to file suit in California against an insurer doing business in the state (or having sufficient business contacts in the state to satisfy jurisdictional requirements) to recover proceeds due under a life, annuities, dowry, educational or casualty insurance policy that was sold by that insurer in Europe between 1920 and 1945.

That provision would make it more difficult for a European insurance company to have a case moved to a European court.

The bill, AB 1334, also would extend the statute of limitations on such claims until Dec. 31, 2010--a key point because insurance companies are expected to contend that the suits were filed decades beyond the existing four-year statute of limitation for breach of contract claims.

Indeed, the bill’s author, Assemblyman Wally Knox (D-Los Angeles), said that it was designed to assist California plaintiffs whose Holocaust insurance cases might otherwise be thrown out of court.

In particular, Knox cited the case of the Stern family of Los Angeles, which has alleged in a case filed this year in Los Angeles Superior Court that a large Italian insurance company, Assicurazioni Generali, has refused to honor valid decades-old policies. The Sterns are seeking more than $135 million in damages.

In a statement announcing the bill’s passage, Knox said Generali, based in Trieste, is expected to seek dismissal of the case this month on procedural grounds. “The bill seeks to address the procedural hurdles in an attempt to put the Stern family case and others like it before the courts,” Knox said.

As an urgency measure, the bill would go into effect immediately.

“I am absolutely delighted on behalf of all the survivors and their heirs,” said Los Angeles attorney Lisa Stern, who testified on behalf of the bill in April. “It has been suggested that this is akin to moving the goal posts during a football game. Rather, I see it as leveling the playing field--a necessary measure to allow people who are 80, 90 or 100 to seek legal redress. Without this bill, it would have been most problematic.”

The bill would affect about a dozen European insurance companies, all of which do business in California under their own names or through affiliates. The companies allegedly failed to honor valid claims and have been sued in a national class-action suit pending in New York, as well as individual actions in California and other states.

There was no organized opposition to the bill, which is similar to legislation being considered in other states. But lawyers for the insurance companies might attempt to challenge the statute in court. The Times was unable to get immediate comment from any of those attorneys.

Emilio Galli-Zugaro, director of corporate communications for Allianz of Germany, said that although the bill was well-intentioned, it represented the wrong approach. In an interview from Munich, he stressed that Allianz and four of the other defendant insurance companies already had signed an agreement with major Jewish organizations and the insurance commissioners of California and New York in an attempt to resolve the issue of Holocaust insurance claims as swiftly as possible.

Galli-Zugaro said his company has paid out eight claims since setting up a hotline last year. He said that based on calls to the hotline, “the real dimension of the case is much lower than anyone would expect.”

California Insurance Commissioner Chuck Quackenbush, who supported the Knox bill, has estimated that the state has about 15,000 to 20,000 Holocaust survivors or heirs of people who died in the World War II-era genocide.

In her testimony supporting the Knox bill in April, Lisa Stern recounted the story of how members of her family had tried on numerous occasions since 1946 to collect on policies issued starting in 1929 to family patriarch Moshe “Mor” Stern, a leading wine purchaser in Czechoslovakia who died in the gas chamber at Auschwitz.

She said Generali officials had demanded that Stern family members produce a death certificate from Auschwitz. For many years, the company denied that there were any policies. But Stern said the policies were found at a warehouse in 1997.

In recent months, Generali attorneys have taken the position that the company owes nothing to the Sterns because their policies were among those nationalized by the Communist government of Czechoslovakia in 1945, within months after the end of World War II.

Both Knox and state Sen. Tom Hayden (D-Los Angeles) have related bills pending in the Legislature that are expected to be voted on in coming weeks.