Hope Raised for Holocaust Claim Payouts

In the face of doubts that Holocaust insurance claims will ever be honored, former Secretary of State Lawrence S. Eagleburger, who heads an international commission seeking to resolve the thorny issue, said he hopes the commission will make its first payments to claimants by summer’s end.

“We will not be successful until we have begun to pay some claims,” said Eagleburger, 68. In October he agreed to chair the commission, created last summer in response to legislation and massive lawsuits in California and New York claiming that a number of European insurers had denied valid insurance claims lodged by Holocaust survivors or the heirs of people who were killed by the Nazis during World War II.

Eagleburger, in his first interview on the commission’s work, also said he hoped that by the end of May the commission will establish procedures to identify, evaluate and pay claims on insurance policies issued to Holocaust survivors and the descendants of people who perished.

However, some key legislators and Jewish leaders remain skeptical that the commission--which has offices in Washington and London--can deliver without further external pressure.

This doubt parallels tensions between state and federal officials in recent years over how best to reach agreements between Holocaust survivors and Swiss banks and German corporations.

Prime among the skeptics is Assemblyman Wally Knox (D-Los Angeles). And today the Assembly begins consideration of Knox-authored legislation that would require any insurance company operating in California to disclose a list of all policies that it or its affiliates issued in Europe from 1929 to 1945, or face losing its license to do business in the state.

“Most people who may have a [Holocaust-related] claim against one of these companies don’t know it,” Knox said. “This bill would create a registry that would let people know whether they have a claim.

“For 50 years, the companies told the world there were no claims,” he said, noting that the firms’ position has been belied by revelations in the past two years that records of such policies still exist.

Earlier Measure Blocked by Veto

An identical Knox measure passed the Legislature without an opposing vote last year but was vetoed by then-Gov. Pete Wilson, who said it might serve simply as a catalyst for further litigation.

The Alliance of American Insurers, a national trade association, has said it will oppose the current measure, contending that it would put an unfair burden on the U.S. subsidiaries of overseas carriers and is superfluous because of other legislation passed last year.

Six European companies--Allianz AG, Axa, Generali, Zurich, Basler Leben and Winterthur Leben--with California affiliates are participating in the commission, which is charged with resolving all unpaid insurance claims of Holocaust victims.

But Knox and Jewish leaders said involvement with the commission is not enough.

“While I am supportive of the work of the commission, I firmly believe that pressure put on the insurance companies to be forthright and divulge this information is essential,” said Michael A. Hirschfeld of the Jewish Federation of Greater Los Angeles.

David A. Lash, executive director of Bet Tzedek, the Fairfax Avenue nonprofit legal services program that represents hundreds of Holocaust survivors, also strongly endorsed the bill, saying that “the continuation of litigation and legislation will keep the commission’s feet to the fire. The commission has no enforcement power; it is totally voluntary.”

Eagleburger has not taken a position on the Knox bill. But he said he was angry that state Sen. Tom Hayden (D-Los Angeles) had urged state Insurance Commissioner Chuck Quackenbush to use other legislation passed last year to strip the licenses of insurance companies that are not paying valid Holocaust-related claims.

Eagleburger contended that if California took such action it might prompt companies to cease their participation in the commission and discourage other companies from joining the commission process, thus possibly further delaying payments to elderly Holocaust survivors.

“As far as the commission is concerned, I wish we could move faster,” Eagleburger said in a telephone interview. Moreover, he said it was a “disgrace” that the U.S. government had not dealt with this problem decades ago. But he also stressed that under the terms by which it was created, the commission--whose 13 members include insurance company representatives, U.S. and foreign regulators and representatives of Jewish organizations--has to proceed by consensus “or we will get nowhere.”

To date, Eagleburger said, the companies have anted up $100 million to the commission. The lion’s share--$90 million--has been placed into an escrow account, for possible use as a humanitarian fund for people with apparently valid claims that cannot be thoroughly documented because records were destroyed or for some other reason. The other $10 million is going for commission operating expenses such as staff salaries and audits.

“As of today, the companies have sought to be reasonable in coming up with answers to complicated questions,” Eagleburger said. “They are obviously trying to defend their interests. Sometimes I have to bang them on the head, but on the whole they have not been bloodsucking people.”

Nonetheless, he said one company, which he declined to name, has “hidden behind the commission process, saying it can’t pay any claims while we are doing our work. I have told them that is B.S.,” he said.

A Plea to Give the Commission Time

Stuart E. Eizenstat, undersecretary of state for economic, business and agricultural affairs, also said he hoped that people will give the commission time to work through a series of tough issues. Among them: whether companies should pay interest on the claims of various kinds, ranging from life to home insurance, and what the burden of proof to establish a valid claim will be.

Eizenstat, the Clinton administration’s point man on Holocaust reparation issues, expressed concern about the prospect of California sanctioning insurance companies.

“At the State Department,” he said, “we have a dual goal--justice for Holocaust survivors and trying to avoid foreign policy tensions if sanctions are exercised against major [European-based] insurers.” Eizenstat said he had told Hayden and Quackenbush that the mere threat of sanctions “would be highly counterproductive.”

Hayden maintained that the insurers had only agreed to participate in the commission because they feared worse consequences, such as losing their licenses, if lawsuits against them were not settled as part of an overall resolution. “ It’s economic, not moral, as far I can see,” he said.

Quackenbush, who played a key role in the creation of the commission and heads its audit committee, has been trying to keep pressure on the companies without seeming overly belligerent. He says the Knox bill will help ensure that Holocaust victims obtain their rightful compensation.

“Insurance companies that have for over 50 years refused to pay Jewish and other policyholders should be held accountable, and be prepared to open their books and pay legitimate claims,” he said.