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Deal Frees Up $275 Million for Holocaust Payouts

THE NATION

Negotiations: After two years, panel reaches agreement with German group on reparations for insurance claims from World War II era.

September 20, 2002|HENRY WEINSTEIN | TIMES STAFF WRITER

The International Commission on Holocaust Era Insurance Claims announced Thursday that it reached an agreement with a German foundation that will free $275 million for reparations.

The pact came after two years of contentious negotiations, which pitted Jewish groups and U.S. regulators against the foundation, with commission Chairman Lawrence S. Eagleburger in the middle.

"This agreement is a major step forward for many [Holocaust] survivors and their heirs who had no readily available routes for pursuing valid German insurance claims," said Eagleburger, who was secretary of State under former President Bush.

The settlement calls for German insurance companies to publish lists of likely affected policyholders from the World War II era, making it easier to determine who has a potential claim. It also extended the deadline for filing claims from Sept. 30 to March 31, to give the public time to review the lists.

Advocates for survivors have long maintained that disclosure of policyholder lists is the key to an equitable process because nearly all Holocaust victims lost their records when they were taken to the Nazi death camps. Consequently, hardly any survivors or their heirs have valid paperwork for claims, making them dependent on insurance companies to search their files and make them public.

The German companies' earlier refusals to publish those lists, and contention that they had failed to honor various agreements during the last four years, nearly unraveled the international negotiations. Nat Shapo, who heads the National Assn. of Insurance Commissioners' Holocaust Task Force, had threatened to bolt the international commission and seek fines against the U.S. affiliates of the German companies unless they complied.

Shapo, who heads Illinois' Insurance Department, also strongly resisted a request by the insurance companies--primarily Allianz, the largest German insurer--for a $30-million reimbursement for operating funds they had provided to the commission. The reimbursement would have come out of money set aside for survivors' claims.

After months of haggling, the companies backed off that demand, removing the last obstacle to a settlement, several sources said.

The international commission was formed four years ago to resolve claims by Holocaust survivors and heirs of people murdered by the Nazis who contend that insurance companies have refused to pay on life insurance policies written in pre-World War II Europe.

Faced with massive class-action lawsuits in U.S. courts, several major insurers agreed to join the commission, hoping to resolve the conflict outside the U.S. legal system.

The commission has been under fire for excessive spending and failing to deliver compensation. Since its creation, the commission has run up about $40 million in costs, while only $12 million in payments have been made, according to a House committee report.

More than two years ago, as the commission foundered, negotiators for the U.S. and German governments reached a $4.6-billion deal--funded by a foundation of more than 6,300 German companies and the German government--that would pay the insurance claims, as well as slave labor reparations to Holocaust survivors. Hundreds of millions of dollars have been paid to those who were forced to work in concentration camps.

But the $275 million allocated in that deal to cover insurance claims has been hung up over disputes about disclosure of the policyholder lists, reimbursement for operating expenses and other issues.

Under the deal announced Thursday, survivors will be able to lodge claims against dozens of German insurance companies, not just the original five companies that agreed to work with the commission--only one of which is a German firm. The settlement also relaxes the standards of proof required for claims.

The agreement, expected to be finalized by the end of the month, was hammered out in talks between Eagleburger and Hans Otto Brautigam, the former German ambassador to the United Nations.

Praising the agreement, Eagleburger said the companies have an electronic database of more than 5 million Holocaust-era policies. Under the proposal, the names of Jews who lived in Germany from 1933 to 1938 will be matched against the database, with results published on the commission's Web site, http://www.icheic.org.

Andrew Frank, a spokesman for the German companies, and California Insurance Commissioner Harry Low also praised the deal, but there were voices of discord.

Sam Dubbin, a lawyer for survivor groups in Florida, said the agreement contained nothing about the publication of names from Allianz, which issued about 1.5 million policies from 1920 to 1945. He said that left a void in determining the number of people who have potentially valid claims. So far, Allianz has disclosed the names of only 380 policyholders, according to commission records.

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