Metropolitan News-Enterprise


Friday, October 21, 2005


Page 1


Court of Appeal Rejects Suit Over Holocaust-Era Insurance Claims


By KENNETH OFGANG, Staff Writer/Appellate Courts


Holocaust survivors who claim to have been treated unfairly by the commission set up to settle claims based on life insurance policies issued in pre-World War II Europe cannot sue the commission, the Court of Appeal for this district ruled yesterday.

“The foreign policy of the United States with respect to claims for unpaid insurance benefits arising out of the Holocaust era favors settlement over litigation, and provides that the exclusive forum for resolution of such claims should be the International Commission on Holocaust Era Insurance Claims,” Justice Walter Croskey wrote for Div. Three.

“While this foreign policy is reflected in executive agreements the President signed with Germany and Austria, the policy itself extends to claims against insurance companies in nations with which no executive agreement has been executed,” the justice went on to say.

The ruling affirms Los Angeles Superior Court Judge William Highberger’s dismissal of a suit by Holocaust survivors and their heirs against the commission. The plaintiffs alleged that the commission’s procedures for handling their claims against the Italian insurer Assicurazioni Generali violate California’s unfair business practices statute.

Agreement Reached

The commission was established in 1998 as part of an agreement in which Generali and five other insurers arranged to contribute $400 million—with one-fourth of that coming from the Italian company—to resolve claims for the deaths of policyholders from countries other than Germany and Austria who died in the Holocaust.

The German and Austrian claims were the subject of a separate $5.1 billion settlement endorsed by international agreement.

Numerous claimants have alleged that when they attempted to collect on the policies after World War II, they were told that they could not be paid due to the lack of a death certificate or a written policy. The insurers asserted that they owed nothing to claimants where the policy was confiscated by the Nazis and payment made on their demand before the fall of the Third Reich, on policies issued in Eastern Europe by affiliates that were later nationalized by Communist governments, or where they could not find proof that a policy was ever issued.

The commission—a private association organized under Swiss law—is chaired by former Secretary of State Lawrence Eagleburger and includes California Insurance Commissioner John Garamendi, two other American insurance regulators, and representatives of several Jewish organizations.

Settlement Evaluations

The commission evaluates claims and makes settlement offers according to certain guidelines. The practices complained of in the suit include denial of claims based on “negative evidence”—the lack of proof of insurance in the insurer’s files, even if those records are known to be incomplete or incorrect.

The plaintiffs also allege that the commission’s agreement to seek dismissal of suits against the member insurers violates their right of access to courts, that settlement offers are unreasonably low, and that the commission is biased against claimants.

One of the plaintiffs, Auschwitz survivor Manny Steinberg of West Hills, told the Jewish Journal, a Los Angeles weekly, two years ago that the commission practices reminded him of the way the Nazis would choose which Jews would live and which would die at the concentration camp.

“Eagleburger and Generali act like little gods.”

In sustaining the commission’s demurrer and alternatively granting its motion to quash service, Highberger said the case involved a matter “under the primary jurisdiction of our executive branch in conducting the foreign relations of this country,” and that there was an insufficient nexus between the commission’s California activities and the plaintiffs’ allegations to sustain long-arm jurisdiction.

 The Court of Appeal agreed with Highberger as to preemption and did not reach the jurisdictional issue.

Croskey cited American Ins. Assn. v. Garamendi (2003) 539 U.S. 39, which struck down a California law designed to assist state residents in collecting on policies issued by insurers who do business in the United States. That case, like this one, reflects the principle that state courts must honor expressions of U.S. foreign policy, even where there is no statute expressly preempting their exercise of jurisdiction.

The case is Steinberg v. International Commission on Holocaust Era Insurance Claims, 05 S.O.S. 4771.


Copyright 2005, Metropolitan News Company