State Threatens Sanctions for 5 Insurers
California Insurance Commissioner Chuck Quackenbush said Thursday that five European insurers are impeding progress of the international commission attempting to resolve disputes over Holocaust-era insurance policies. The firms could face sanctions in California, Quackenbush warned after leaving a commission meeting in Washington.
“It’s clear that the insurance companies are not taking this as seriously as we would like,” Quackenbush said.
He said the companies had backed away from agreements they made in June to provide the commission with lists of people who bought policies in the 1930s. And he said that Allianz AG, the large German insurer and the parent company of Firemen’s Fund, had reneged on a commitment it made in Israel in June on how policies purchased in the pre-World War II era would now be valued.
Quackenbush said the five companies that are members of the commission no longer have a “safe harbor” in California and may face charges for failing to honor valid claims filed by Holocaust survivors. Such an action could result in the California subsidiaries of those firms losing their licenses to sell insurance in the state.
However, Quackenbush declined to state whether he would soon file charges against Allianz or any of the four other firms. All five are defendants in a massive federal class action case filed by Holocaust survivors in New York, and one of the firms, Assiscurazioni Generali of Italy, also is a defendant in a case set for trial next year in Los Angeles. Quackenbush announced earlier this year that the state insurance department was taking Holocaust-related action against Munich Reinsurance, the world’s largest reinsurance company, with hearings set to start in September.
Later Thursday, international commission Chairman Lawrence S. Eagleburger reported some progress in the commission’s work. Eagleburger said the commission would start its claims process with several thousand claims already filed with Jewish organizations, Israel and regulators in various states. Neal M. Sher, Eagleburger’s chief assistant, said the commission would send those claims to the insurers and hoped to start getting them paid soon.
Earlier this year, Eagleburger said he hoped that some payments could be made by the end of this month. It is not clear if that goal can be met. Many of the affected survivors are in their 80s and in poor health.
In addition, Eagleburger, who was secretary of state in the Bush administration, said that by Oct. 29 the commission’s London office would start a full-fledged claims process and begin a worldwide outreach program to potential claimants.
Eagleburger’s formal statement reflected some of the difficulties he has encountered in the thorny job of attempting to reconcile the conflicting goals of Jewish organizations and state regulators on one side and the insurers on the other side. He said that over the next 10 days he would issue a series of directives on several unresolved issues, including the valuation of policies issued in Germany and Eastern Europe.
At a commission meeting in May, the insurers agreed to pay the “real value” of the policies. Subsequently, a formula was adopted that was based on long-term government bond rates. Elan Steinberg, executive director of the World Jewish Congress, said the formula takes inflation into account.
Steinberg said Allianz had proposed Wednesday making payments that are 1.7 times the value of a policy when it was purchased--a proposal he branded “outrageous.” “No reasonable person would say that a dollar in 1936 is worth $1.70 today,” he said.
An Allianz spokesman would say only that German insurers should not have to pay as much as insurers from other European countries because the German government already had paid out huge sums in reparations.
In 1953, West Germany reached a reparations agreement with Israel and the Western countries that prevailed in World War II. Under that program, reparations in generally small amounts have been paid to hundreds of thousands of individuals.
“That was a limited government restitution program,” said Gideon Taylor, executive director of the Conference on Jewish Material Claims Against Germany and Austria, an organization that specializes in Holocaust reparations. “That program did not involve payments from insurance companies to their insureds,” he said.
Eagleburger said Thursday that a representative of the Czech Republic gave the international commission the names of an additional 15,000 people who had insurance policies. Earlier, Generali gave Yad Vashem, the Israeli Holocaust memorial in Jerusalem, a list of 100,000 names of policyholders. Yad Vashem, with a grant from the international commission, is attempting to match those names with those of Holocaust survivors or heirs of individuals who were killed by the Nazis.