Metropolitan News-Enterprise


Tuesday, July 16, 2002


Page 3


Ninth Circuit Rejects Challenge to Holocaust Insurance Reporting Law


By a MetNews Staff Writer


California insurance companies affiliated with foreign firms that issued Holocaust-era insurance policies must disclose information related to those policies, the Ninth U.S. Circuit Court of Appeals ruled yesterday.

In a victory for activists trying to hold German, Italian and other insurers accountable for Holocaust claims, the court lifted an injunction against enforcing of a 1999 state law requiring release of claims data.

The court rejected the contention of insurers that California’s Holocaust Victim Insurance Relief Act of 1999 is an unconstitutional attempt by the state to regulate the affairs of overseas companies.

Unlike a similar Florida law that another federal court did strike down, the Ninth Circuit panel said the California law does not violate the companies’ right to due process because it simply requires reporting—and requires it only of the California companies, even if they have to check in with their related foreign companies to fully comply.

“[B]oth the demands and the sanctions of the statute fall solely on California insurers,” Judge Susan Graber wrote for the court. “Should the foreign company desire not to help a California affiliate company comply with HVIRA, if need not do so.”

Graber added that the California companies’ employees could always go to the foreign headquarters and conduct their own due diligence search, or could disaffiliate  from the foreign firm.

The ruling came in a suit brought against California State Insurance Commissioner Harry W. Low by several insurers, who sought to block Low from enforcing the disclosure law passed in 1999 by the state Legislature. The company won a permanent injunction from a U.S. district judge in Sacramento, who ruled that the Legislature could not purport to require disclosure of information held by foreign companies on foreign shores, and could not hold the local insurance entities to account for nondisclosure.

Unlike cases that strike down laws in which an attempt is made to regulate the substance of an out-of-state transaction, Graber said, the Relief Act does not require insurers to pay any claims or alter the terms of Holocaust-era insurance policies.

Graber also rejected the assertion that the express purpose of the Relief Act is to eventually force California-licensed insurers and their foreign affiliates to pay any outstanding Holocaust era claims, many years after the statute of limitations on those on those claims has run.

There are other purposes served by the law as well, the judge said, including a possible attempt by the Legislature to protect Californians from companies that have not paid valid insurance claims

The panel, which also included Judges Richard A. Paez and Alfred T. Goodwin, rejected a host of other constitutional challenges to the statute.

The case is Gerling Global Reinsurance Corp. of America v. Low, 01-17023.


Copyright 2002, Metropolitan News Company