3 Insurers Agree to Settle Holocaust Claims

California Insurance Commissioner Chuck Quackenbush announced Wednesday that he had reached Holocaust insurance settlements with three European insurers. But he threatened to bar a much larger company from doing business in the state if it fails to comply with a new California law requiring insurers to make broad disclosure of policies issued in the Holocaust era.

Quackenbush made the threat at a Los Angeles hearing for which he drew criticism from Stuart E. Eizenstat, the Clinton administration’s special envoy on Holocaust issues, and former Secretary of State Laurence S. Eagleburger, who heads an international commission attempting to resolve Holocaust-era insurance disputes. They said that five firms should have been excused from testifying before Quackenbush because of their participation in the international commission.

Quackenbush said that he had reached agreements with three other companies--Aegon, ING and Fortis, all in the Netherlands--to provide a total of $4.2 million to a humanitarian fund for California’s 22,000 Holocaust survivors.

He praised the companies as “models of moral and corporate leadership.” They also agreed to provide lists of all the policies they issued from 1920 to 1945 to comply with a new state law written by Assemblyman Wally Knox (D-Los Angeles). The law also requires insurers to prove that the policies have been paid, or that no heirs could be located. If heirs cannot be found, the remaining proceeds are to be contributed to a nonprofit organization and passed on to Holocaust survivors.

“This is the first time I have seen a company act not to hide information, deny responsibility and pursue avenues to delay payments,” said developer Jona Goldrich, a concentration camp survivor and Gov. Gray Davis’ liaison on Holocaust issues. The companies were excused from testifying at the hearing because of the pacts.

At the same time, Quackenbush and Knox blasted Italian insurer Assiscurazioni Generali for responses made by Christopher Carnicelli, chief of the firm’s U.S. branch, at the hearing.

Carnicelli said that he believed that the company had complied with the spirit of the Knox bill by providing a list of 98,000 names of policyholders to Yad Vashem, the Jewish Holocaust memorial in Jerusalem. He also noted that Generali and four other companies had provided $90 million to the commission to pay claims and administrative costs.

Quackenbush did not allow Carnicelli to read his prepared statement. And he said repeatedly that he was tired of hearing Generali’s comments about its support of the international commission at the same time the firm indicates it is not obliged to provide further information to the state.

State Insurance Commission attorney Leslie Tick said that under the California law, Generali was obliged to provide a much larger list of about 300,000 names with more information on it than has been provided to Yad Vashem.

Carnicelli, under withering questioning from Quackenbush, Tick and two other attorneys, repeatedly declined to say whether Generali would comply with the Knox law, which formally goes into effect in April.

Generali “might as well just leave” California, Quackenbush said, if the company does not comply. He also vowed to seek revocation of the firm’s license to operate in California if it does not provide the information called for in the Knox bill.

Generali, Italy’s largest insurance company, handles about $22 million of business in California annually and about $125 million across the United States, Quackenbush said last year. Generali is one of five large insurers participating in the international commission formed by state insurance regulators, the insurance firms and Jewish organizations. Eizenstat and Eagleburger said that the August 1998 agreement creating the commission contained a clause providing that commission members, including Quackenbush, would work to obtain exemptions from pending Holocaust-related legislation for participating companies.

Eagleburger said the five companies had been participating in good faith in the commission and thus should be freed from subpoena. But Quackenbush said that the companies were obliged to testify about their intent to comply with the new California law. Commission attorneys on Wednesday questioned one of the other firms, Zurich Insurance Co. of Switzerland, and plan to query representatives of the other three--Axa of France, the world’s largest insurance company, Allianz of Germany, the world’s second-largest insurance company, and Winterthur of Switzerland--today in San Francisco.

For decades, World War II survivors and relatives of those killed by the Nazis have attempted to get payment on insurance policies purchased earlier as Jews attempted to gain some protection for assets after Adolf Hitler came to power. About a dozen companies have been sued in California, New York and other places for allegedly acting in bad faith by failing to honor those claims. Quackenbush’s office has supported those recovery efforts.

Eizenstat, in a letter to Quackenbush and in an interview, said that Quackenbush’s aggressive action toward the five companies could undermine the work of the international commission and his efforts to forge an agreement on Holocaust-era slave labor issues.

He noted that Allianz is also part of a consortium of German companies that have agreed to pay $2.6 billion to resolve slave labor issues--an amount described as much too small by attorneys for the victims. Eizenstat is attempting to persuade the German companies and the German government, which has pledged to put in an additional $1.6 billion, to increase the size of the deal. “We are at a very sensitive stage” on both issues, he said, noting that the international commission has a critical meeting next week and that the German companies have set a Dec. 8 deadline for attorneys representing plaintiffs in the slave labor cases to accept their offer.

Eizenstat, who has led U.S. efforts to get compensation for Holocaust survivors and the children of people killed in Nazi death camps, said he understood that Quackenbush and the survivors “are frustrated by the length of time this has taken. We would also like this to go faster . . . but this is infinitely faster than litigation.”

Eizenstat acknowledged that while the U.S. government could sign an agreement giving foreign companies a haven from future federal lawsuits on insurance matters, it could offer them no such protection from state insurance regulations that would enable Quackenbush to revoke a license.

Quackenbush said that he had “nothing but the highest respect for Eagleburger and Eizenstat.” But he quickly added, “I’m working here in California to move this along and I hope that these hearings will spur action. Generali has significant exposure on this issue.”

Whittier Law School professor Michael Bazyler, who has closely followed the Holocaust cases, said that since Generali had acknowledged that it has a “moral obligation” to assist Holocaust victims, the only reason for the company not to provide a full list of the policies it issued was because it feared further financial exposure.

Quackenbush played an instrumental role in the creation of the international commission. But he has said for months that the commission has not made sufficient progress and that California had to take more aggressive steps as Holocaust survivors continue to die without having their insurance policies honored by the companies.

Indeed, Arthur Stern, a concentration camp survivor and a representative of the Jewish Federation of Greater Los Angeles, testified Wednesday that 7% to 8% of California’s 22,000 Holocaust survivors are dying each year.