Insurers Ease Stand on Holocaust Claims

Major European insurance companies, representatives of Jewish organizations and regulators have reached agreements on several major issues involving insurance claims from victims of the Nazi Holocaust--a development that could open the way for a settlement of their cases.

The agreements involved major concessions by the insurance companies on two central issues, according to sources who were present for the negotiations, which took place in London.

In the most important concession, the firms agreed to pay the “real value,” rather than the face value, on life insurance policies that had been purchased by European Jews in the 1920s and 1930s.

In thousands of cases, insurers refused after the Holocaust to pay off such policies, arguing, for example, that they could not pay because records had been destroyed or because heirs were unable to produce death certificates for people who had been murdered in concentration camps.

A “real value” calculation for the policies would include compound interest and is designed to take into account inflation, meaning that Holocaust survivors and the heirs of people who were killed by the Nazis are likely to collect thousands of dollars more on their policies than they would have if the companies paid only face value, said California Insurance Commissioner Chuck Quackenbush and leaders of Jewish organizations who participated in the talks.

Estimates of the overall value of the policies at issue have ranged as high as $4 billion, although spokesmen for the insurance companies have called those figures highly exaggerated.

The companies also agreed to back off from their insistence that they are not responsible for paying off policies that were issued in Eastern European countries, where insurance firms were nationalized by Communist regimes after World War II. The bulk of European Jews killed in the Holocaust lived in such countries.

But there was no definitive agreement on either of those two matters, and sources on both sides said further negotiations will be needed before an actual settlement can be reached.

“I would call this an extremely reluctant admission of responsibility by the companies,” Quackenbush said. “They didn’t want to do this.”

Christopher Worthley, a spokesman for Munich-based Allianz AG, one of the five insurance companies participating in the talks, cautioned that there is still “a considerable amount of work to define what ‘real value’ truly means.”

The chairman of the international commission that is conducting the negotiations, former Secretary of State Lawrence Eagleburger, established committees to work on those remaining issues and report back by the end of May. The commission’s next meeting is scheduled for June 23 in Jerusalem.

Quackenbush described the London meeting as very contentious, a view echoed by other participants.

Elan Steinberg, executive director of the World Jewish Congress, said that the companies agreed to the real value calculation only after Eagleburger threatened to tell the press that the negotiations had failed.

“Eagleburger is a very effective chairman but it takes everyone in the room to reach decisions,” Worthley said.

A declaration that the negotiations had failed could have triggered a California law that bars the companies from selling insurance in the state unless they are participating in good faith in a viable international process to resolve Holocaust-era claims.

Steinberg and Gideon Taylor, executive vice president of the Conference on Jewish Material Claims Against Germany, an organization that works on Holocaust reparations issues, said the specter of Quackenbush suspending the license of a California subsidiary of one of the major European insurers clearly had an impact on the negotiations.

Eagleburger was unavailable for comment Friday. After the meeting ended Thursday, he issued a brief statement saying simply that the parties had resolved “contentious” issues.

“The arrangements needed to make the claims process a reality will take some time, but will be moved forward as fast as possible,” Eagleburger said.

Additionally, Worthley and a source from one other company said the firms had agreed to rapidly process some claims they already have received, even before the commission agrees to a formal claims process.

The slow pace of negotiations over the insurance claims has frustrated advocates for Holocaust survivors and their heirs, including state Sen. Tom Hayden (D-Los Angeles), who has urged Quackenbush to form a state panel that would seek to ensure that the international commission is treating survivors fairly. In many cases, the survivors are elderly and may not live out a lengthy negotiating process, Hayden said.

The five major European insurers participating in the commission are defendants in a major class-action suit filed by Holocaust survivors. They all have U.S. subsidiaries doing business in California.

Each of the companies has retained U.S. attorneys and other influential advisors who were present at the London meeting, including William Webster, the former director of the Central Intelligence Agency, Richard Burt, a former ambassador to West Germany in the Reagan administration and New York attorney Kenneth Bialkin, the former chairman of the Anti-Defamation League.