Some members of the Senate are looking into the idea of canceling a key part of the 1998 agreement that created the International Commission on Holocaust Era Insurance Claims (ICHEIC).
The Holocaust Survivors Foundation USA and its backers have been asking Congress to void a provision that’s supposed to create “legal peace” between the survivors, the U.S. government, the German government, and the insurers and other entities that were part of ICHEIC.
The foundation and its supporters want the U.S. government to let the Holocaust survivors and heir sue the insurers in court.
The National Association of Insurance Commissioners (NAIC) now has a life insurance policy locator for policyholders and beneficiaries who are looking for lost life insurance policies.
ICHEIC operated like an insurance policy locator for Holocaust survivors, and for the children and other heirs of people who died in the Holocaust, who were not able to resolve problems with collecting on policy benefits in the five decades after the end of World War II. ICHEIC paid $306 million in benefits to 48,000 claimants between 1998, when it started up, and 2007, when it shut down, along with another $169 million in humanitarian fund payments.
The benefits payments made averaged about $6,375 per claim.
New York’s Holocaust Claims Processing Office has been handling claims involving Holocaust-era insurance policies since 2007. That agency has helped 2,465 claimants collect $34 million in benefits, for an average of about $14,000 per claim.
Anna Rubin, director of the Holocaust Claims Processing Office, said she believes that many of the claims that can be resolved have been resolved, and that claimants who get a chance to sue insurers in court may end up with an exaggerated sense of what might be accomplished through litigation.
The Holocaust Survivors Foundation USA Position
Samuel Dubbin, counsel for the foundation, testified last week in Washington, at a hearing of the Senate Judiciary Committee, that the U.S. government never formally agreed to waive the Holocaust survivors’ ability to take insurers to court.
“The basis of the policy was State Department press releases and congressional testimony,” Dubbin said. “No treaty, no act of Congress or executive order has any preemptive effect.”
Insurers and the Germany government are saying that the ICHEIC agreement gives the insurers immunity from survivor lawsuits, Dubbin said.
The issuers of the Holocaust-era policies have immunity now because the U.S. Supreme Court ruled in 2003 that federal policy favoring nonadversarial resolution of Holocaust victims’ claims preempted state insurance commissioners’ ability to subpoena records from German insurers, Dubbin said.
“Only Congress can now correct a major historic injustice,” Dubbin said.
A Survivor’s Testimony
One of the witnesses at the hearing, David Mermelstein, is president of the Holocaust Survivors of Miami-Dade and vice president of the Holocaust Survivors Foundation USA.
Mermelstein was born in Czechoslovakia in 1928.
“My parents, my four brothers, my sister, and grandparents were all murdered in Auschwitz,” Mermelstein said at the hearing. “I am the only member of my family to survive.”
Mermelstein said that he knew his family had insurance from Generali, because the family home had an insurance company plaque on the wall, and because an agent came around every two weeks to collect the premiums.
ICHEIC claimed it could not find information about Mermelstein’s father’s policy and it sent out a check for $1,000 as a “humanitarian” payment, Mermelstein said.
Mermelstein said he used the Freedom of Information of Act to get Justice Department records that show that Generali was not promised protection against policyholder lawsuits.
“They admitted the government lied,” Mermelstein said. “When a congressman and our lawyer Sam Dubbin used those memos in a congressional hearing, the Justice Department told me to give the records back. They still wanted to hide the truth. ”
Some Jewish groups may oppose passing a new law, but “ they are not, I repeat, not, Holocaust survivor groups and do not represent survivors in any way,” Mermelstein said. “They have no right to speak for us, or to act for us, and they never did.”
Stuart Eizenstat’s Position
Stuart Eizenstat helped manage efforts by the administration of former President Bill Clinton to negotiate a wave of agreements related to compensating Holocaust survivors and their heirs for property lost due to the Holocaust.
Eizenstat argued that the United States has agreed to make the ICHEIC process the exclusive remedy for resolving Holocaust-era insurance claims.
Canceling the insurers’ immunity from suits “would undermine legally binding international executive agreements,” Eizenstat said. “It would complicated future Holocaust agreements, since the word of the United States could not be trusted.”
Eizenstat also argued that the ICHEIC process and New York’s Holocaust Claims Processing Office have much lower standards of evidence than a court would impose, and that letting the survivors and heirs sue the insurers would probably lead to disappointing results for the claimants.
Eizenstat suggested that Congress could strengthen the insurance restitution program by:
- Recognizing that European insurers must comply with strict European privacy laws, and that the European privacy laws might conflict with U.S. orders to post the names of Holocaust-era policyholders on a public website.
- Having insurers search the database of potential Holocaust-era insurance policyholders using a database available on the Yad Vashem website.
- Holding periodic oversight hearings, to verify that insurers are living up to promises to handle future claims involving Holocaust-era insurance policies with the relaxed ICHEIC documentation standards.
European Insurance, 1936
Baird Webel, an economist at the Congressional Research Service, and Rubin, director of the Holocaust Claims Processing Office, presented extensive information in hearing testimony, and in hearing-related documents, about what the
Webel noted that many people who lived in Europe before World War II used life insurance policies that resembled modern whole life policies to save for the future, as well as to provide death benefits.
- The European life insurance market generated the equivalent of about $908 million in premium revenue in 1936.
- The average level of 1936 life insurance premiums per person, for the entire population, ranged from 2.2 cents per year, in Yugoslavia, up to $6.70 per year, in Germany. The average premiums per person was 19.3 cents per year in Poland, where many of the Jewish people killed in the Holocaust lived before World War II, and 90 cents per year in Hungary, another country that was home to many of the Jewish victims of the Holocaust.
- At the Holocaust Claims Processing Office, insurance restitution has accounted for about 19% of the assets the office has helped claimants recover. The rest of the compensation has been related to loss of assets such as bank accounts and works of art, Rubin said.
Links to resources related to the hearing, including a video recording of the hearing, are available here.
— Read Holocaust Settlement Advances, on ThinkAdvisor.