Probe ‘Phantom Rule,’ Says Congressman

An investigation should be launched into charges of a so-called “phantom rule” favoring insurance companies being improperly used to decide Holocaust-era insurance claims, according to Rep. Eliot Engel (D-Bronx).Engel was responding to a claim by Albert Lewis in The Jewish Week that he was pressured into applying this rule while he served as an arbitrator for the International Commission on Holocaust-Era Insurance Claims (ICHEIC).

“His charges should be looked into” by Congress or the Justice Department, Engel told The Jewish Week. “These are very serious allegations.”

Lewis, a former New York State insurance superintendent, said he believes the “phantom rule” may have played a role in the commission’s decision to deny 84 percent of all claims it reviewed.

Engel said he is co-sponsoring a bill that would require Holocaust-era insurance companies to disclose the names of all Holocaust-era policies and to permit federal courts to consider claims stemming from unpaid insurance claims.

ICHEIC, which was created to handle all Holocaust-era insurance claims, ceased operations earlier this year after saying the deadline for filing claims had ended and that it had resolved all outstanding claims. In all it awarded more tha $300 million to survivors and their heirs.

“You cannot put a timetable on justice,” Engel insisted, “when we’re talking about crimes as monumental as the Holocaust. In no way could you ever have a statute of limitations … While some people want to slam the door on it and move on to more pleasant things, the victims and justice” should not allow that.

But passage of such legislation would do no more than “give rise to decades of further litigation on top of all the litigation that has already occurred,” according to Peter Simshauser, a lawyer representing Assicurazioni Generali, the largest insurance writer at that time in Europe and one of six major European insurance companies that provided the money.

He said claims had already been resolved through the actions of organizations such as ICHEIC that had been created by both the Bush and Clinton administrations.

“Generali has paid more than $170 million with respect to these claims in reliance on those policies [of the Bush and Clinton administrations],” he said.

Asked about the high percentage of claims that had been rejected by ICHEIC, Simshauser insisted that Generali “was audited by independent authorities, including prominent international accounting firms, which have verified that its historical records are complete and enabled it to make a determination of which policies were in effect in 1936 and thereafter. And those findings were accepted by ICHIEC and its members, including State of Israel and the insurance commissioners in the United States.”

Another attorney involved with the case said the insurance companies “bent over backward” to side with claimants, but that many of the claims were invalid, accounting for the high percentage of rejected claims. “Standards were lenient, but some evidence was required,” said the attorney, who asked not to be named.

Nevertheless, Leo Rechter, director of the National Association of Jewish Child Holocaust Survivors, said he knew of individuals who submitted claims to collect the death benefits of their family members and were rebuffed because they had no documentation.

“Very few people kept the actual policy,” he said. “When you are running for your life, you don’t want to identify as a Jew.”

Alex Moskovic of Sound Hope, Fla., said he applied to ICHEIC when it was established in 1998 and didn’t receive a reply. He said he later saw the name of his father, Joseph Moskovic of Sobrance, Hungary, and two uncles — along with their hometowns — on the Web site of two insurance companies. “In 2001 I received a $1,000 check from a humanitarian fund” from ICHEIC, Moskovic said.

He said he believes he should have received more than that because “we had a store and two houses and were pretty well off. I was 13 when we were taken away and I remember them [his relatives] talking about policies.”

But Moskovic said he had no further details.Esther Finder of Rockville, Md., president of the Generation After in Washington, D.C., said her organization and others have been sending letters to House members asking them to support the legislation.

Told Generali’s position that its historical record is complete, she said: “I don’t know that all the records have been made available. There is always another archive opening here and another there. The archive in Vienna just became available. It could be that not a single piece of paper is in there having to do with insurance claims, but we still need to open the process. … I’m tired of hearing everyone’s assurances. I’d like to see for myself that there is no paper in there. Show me.”

Lewis, the former ICEIC arbitrator, provided The Jewish Week with copies of e-mails he said he had received from Katrina Oakley, the commission’s law administrator in London, who suggested that he reconsider his decision to pay two claimants. (See June 29, page one.) Oakley said the two claimants didn’t have copies of the policies and none of the insurance companies in ICHEIC claimed to have a record of those policies, therefore they should be denied.

Oakley cited the actions of another arbitrator who denied similar claims, noting that the rule is that when no written proof exists, the burden on the claimant is a “heavy one.”

But Lewis said no such rule existed. And in a note to Oakley, Lewis wrote that he reviewed that arbitrator’s records and found that he had granted awards “where there was no written evidence of a policy” simply based on anecdotal evidence.

“I had accepted such evidence in granting my monetary awards,” Lewis wrote. He then questioned why this arbitrator’s other decisions granting awards based solely on anecdotal evidence was not sent to him.

“Were any other arbitrators similarly pressured by you and changed their awards?” he asked.