European Firms Face Sanctions for Dormant Insurance Policies

A California state senator has warned that European insurance firms are pressing lawmakers to water down legislation intended to force the companies to pay out policies from the Holocaust era.

The bill, sponsored by Sen. Tom Hayden, would require the California insurance department to suspend the business license of the companies involved until the claims of Holocaust survivors, or descendants of Holocaust victims, are met. It has already passed the Senate and is pending in the state Assembly.

California is one of several states across the country that have joined in a national effort to use every legal means available to force insurance companies to open their records to locate dormant polices taken out by Holocaust victims.

Deborah Senn, the insurance commissioner for Washington state who is spearheading the national campaign, last week suggested a new way to gather information about possible policyholders and their heirs.

At an international gathering of Jewish genealogists in Los Angeles, Senn urged families of Holocaust victims to use a global computer database to help track down relatives who may have left unclaimed insurance policies dating back to the Holocaust era.

The value of such policies could total billions of dollars, said Senn, who was attending the convention of the Association of Jewish Genealogical Societies to learn more about tracing her own family’s roots.

The association’s president, Sallyann Amdur Sack, announced that the group is working with the Tel Aviv-based Museum of the Diaspora and an Internet site called Jewish Gen to compile a family tree of the Jewish people that could be used to discover living relatives of Holocaust victims who held insurance policies.

The potential stakes for the European companies are large.

Most of the European firms linked to Holocaust-era insurance claims are major players in the insurance market in the United States — they collected some $14.7 billion in American premiums in 1996, according to a recent report by the National Association of Insurance Commissioners.

California policy-holders, for example, paid $2.3 billion in premiums to branches of the companies licensed in the state in 1996 alone, Hayden said.

By far the largest is the German-based Allianz, whose 14 branches in California collected more than $1.4 billion in premiums.

“The big European insurance firms, which have 73 branches licensed in California, are now lobbying behind the scenes to weaken my bill,” Hayden said. A few weeks ago, he said, representatives of major German, Italian and French insurance companies presented him with an amended draft of his own bill.

The proposed amendments would nullify the license suspensions if the affected firms participated “reasonably and meaningfully” in an international commission to address the claimants’ grievances, and also protect the companies from future liabilities. Hayden said he rejected the proposals.

An international commission was established in April by four major European insurance companies — including Allianz — three Jewish organizations and several state insurance commissioners to expedite the processing of claims.

Hayden also said that he would shortly introduce a bill in the legislature directing state employee pension funds to suspend investments in recalcitrant Swiss banks for one year. Such state funds currently have $350 million in Swiss banks, and another $3 billion in Swiss-related investments, he said.

The proposed move comes in the wake of a call earlier this month by U.S. public finance officials to lift a moratorium on sanctions against Swiss banks in a bid to press them to reach an agreement with Jewish groups on settling Holocaust-era claims.

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