European insurers are asking the International Commission on Holocaust Era Insurance Claims to return $20 million they gave the commission for expenses between 1998 and 2000.
The insurers want to use the money to cover the cost of handling claims on Nazi-era policies filed by Holocaust survivors and survivors heirs, according to U.S. state insurance regulators interviewed.
The insurers themselves are processing the claims, and managers of a $4.4 billion German Holocaust compensation foundation say ICHEIC no longer needs the $20 million, because the foundation will pay $20 million of its costs, regulators say.
These insurers want to have the $20 million reimbursed from ICHEIC after the foundation pays the $20 million to ICHEIC.
But the regulators note that the foundation has budgeted only $130 million for claims against German insurers and their affiliates. If the insurers are reimbursed, regulators say that the money available for claimants would be reduced.
“Im hoping the foundation will relent from its position, so that an appropriate amount of money can go to the survivors and their heirs,” says Nathan Shapo, Illinois insurance director and chair of the Holocaust task force at the National Association of Insurance Commissioners, Kansas City, Mo.
ICHEIC held a special, closed meeting on the claims review process last week near its headquarters in Washington.
Shapo says a confidentiality agreement prevents him from discussing the meeting. A representative for the German compensation foundation also declined to comment.
A German government agency paid many Holocaust-related insurance claims in the 1950s, but the NAIC began working with insurers and representatives of Jewish groups to organize ICHEIC in the late 1990s, to address concerns that some survivors and heirs were having trouble with claims.
Representatives of the NAIC and the Jewish groups attend ICHEIC meetings, but most meetings are closed to the public, according to a complaint filed in May in Los Angeles state court on behalf of Felicia Spirer Haberfeld, an elderly Holocaust survivor.
The commission is supposed to help Holocaust survivors and heirs resolve disputes with insurers over Nazi-era policies.
The commission is also supposed to protect the insurers that sold the policiesand the insurers possible legal successorsfrom lawsuits, by setting the rules for an out-of-court claims review system.
ICHEIC asks insurers to use “relaxed standards of proof” and accept claims “which have little or no supporting documentation,” according to Washington state insurance regulators.
But Dennis Silverman, a spokesman for the Florida Department of Insurance, says some consumers with well-documented claims are still having problems. “We dont believe that German claims have been addressed in a timely and appropriate manner,” Silverman says.
State regulators want insurers to help potential claimants who have no records by publishing lists of all known, potentially unpaid holders of Nazi-era policies.
Insurers say publishing the lists would violate Germany’s privacy laws.
ICHEIC is also considering the possibility of setting up independent review panels that would hear appeals from consumers unhappy with insurers decisions.
Meanwhile, ICHEIC officials are facing charges that they have squandered funds intended for Holocaust survivors on high-priced airline tickets, fancy hotel rooms and public relations firms.
ICHEIC may have spent $30 million on administrative expenses, according to the Spirer Haberfeld complaint.
Steven Green, chief counsel of the California Department of Insurance, says ICHEIC officials reported in June that they had paid $10 million in claims.
ICHEIC officials have insisted that the percentage of funds going to claimants will increase as the claims review operations mature.
Reproduced from National Underwriter Life & Health/Financial Services Edition, July 20, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.