Despite U.S. Government Protests, States Pursue Unpaid Insurance Claims

As the complex battle over unpaid Holocaust-era insurance claims continues in the international arena, smaller skirmishes are being played out in states across the United States.

In 1998, an international commission with strong leadership from the United States was established to address the issue of unpaid insurance policies of Holocaust survivors or their heirs.

The commission launched its full-scale claims and outreach program in February, targeting European insurance companies that never paid out insurance policies to the appropriate beneficiaries.

But some states feel the commission — which is charged with getting insurance companies to join it, publish names of policyholders and pay out those policies to survivors or their heirs — is not progressing fast enough.

And they are taking the issue into their own hands.

Last week, Minnesota became the latest state to enact comprehensive laws that make it easier for victims to recover their claims.

Two other states — California and Washington — already passed similar laws, and others, including New Jersey and Maryland, are following their lead.

But the states that are taking on insurance companies are running into trouble, not just from resistant companies, but also from the U.S. government.

Deputy Treasury Secretary Stuart Eizenstat believes the methods of the International Commission on Holocaust-Era Insurance Claims are the best and most expeditious ways for resolving insurance claims.

Eizenstat, who serves as the special representative of the U.S. secretary of state and the president on Holocaust-related issues, has warned states against taking action, saying their efforts could “undermine the work” of the international commission and could complicate other negotiations regarding Holocaust-era reparations.

Minnesota’s Holocaust Victims Insurance Relief Act instructs the state’s Department of Commerce to assist victims and their beneficiaries in recovering claims, encourages European insurers to participate in the international commission and warns those companies that do not participate that the commerce commissioner may strip them of their certification to issue new policies in the state.

The Jewish Community Relations Council there estimates that the state has between 200 and 300 Holocaust survivors. Five companies identified by the international commission as ones that should voluntarily join the commission operate in Minnesota.

In a March letter to Minnesota Gov. Jesse Ventura, Eizenstat said the legislation could be counterproductive to the efforts of the international commission.

Legislators did alter certain provisions of the law, but the governor signed the bill despite Eizenstat’s uneasiness.

One of Eizenstat’s worries is that state laws could get bogged down in court and the ensuing lengthy litigation would delay payments to survivors.

Indeed, insurance companies in Florida — which acted on the issue prior to the creation of the international commission — have challenged the constitutionality of the state statute. The statute calls on companies to report what policies they had issued, identify unpaid policies and establish a restitution plan.

Dennis Silverman, assistant director of the legal division for the state’s Department of Insurance, said that even though Florida’s law predates the commission, “everything we’re trying to do is consistent” with what the international commission is trying to do.

The Florida department also is working with local Jewish groups to get companies that identify heirless claims to contribute to a humanitarian fund that would provide for home health care for survivors.

In Washington state, Insurance Commissioner Deborah Senn has been actively involved in the insurance claims issue since 1997. She wants to press for all the European insurers who sold policies between 1933 and 1945 to release their records, including policy lists, so that Holocaust survivors and their families can check for themselves to see if relatives’ benefits had ever been paid.

“The vast majority of survivors have no records from that period, only memories,” Senn has said. “They remember their parents’ conversations. They remember the horror. They don’t remember policy numbers.”

A year ago Washington State passed the Holocaust Victims Insurance Act of 1999. It established a Holocaust Survivor Assistance Office to assist survivors and heirs in recovering proceeds from insurance policies and other assets that were improperly denied or processed.

Danny Kadden, a staffer at the new office, has heard the concerns from Eizenstat and said that while he recognizes the claims are a “unique issue,” they are also an insurance regulatory issue.

“We have a responsibility to claimants,” he said.

Roman Kent, chairman of the American Gathering of Jewish Holocaust Survivors, believes that the commission is making some progress.

At the same time, however, Kent believes the commission is not moving fast enough, and that the states efforts might not necessarily be the wrong way.

“We must bring it somehow to closure,” Kent said. “By whatever means necessary.”