Senate Judiciary Committee Issues Testimony From Ex-U.S. Ambassador Eizenstat
"I want to thank you, and the members of the Committee, for inviting me here today to testify on the very important issue of Holocaust-era insurance claims.
"I appreciate the sentiment that has motivated this hearing and may lead you to propose legislation similar to S. 258, introduced last year. Providing belated justice for Holocaust survivors and for families of victims and preserving the memory of the Holocaust has been a central part of my public service in four
"In the
"In the
"In a non-governmental capacity, in addition, since 2009, as the Special Negotiator for the
- In unprecedented fashion, it would totally undermine the legally binding Unites States government agreement providing "legal peace" with our allies. This was promised to the German and Austrian governments and their private corporations, including some 70 insurance companies, as the basis upon which they joined with some one thousand other German companies to pay 10 billion DM (
- It would complicate our ability to negotiate additional agreements with
* It would fail to direct those Holocaust insurance claimants, free of charge, to the European insurers who continue to apply the cost-free, more expeditious procedures initially applied by the
- It would fail to recognize the opposition of virtually every major American Jewish organization and Holocaust survivor group, as shown by the attached letters and statements. Over the years, I have testified before various Committees of the
"Members of the Committee, there is no doubt we all share a common goal to assist the survivors of the greatest horror inflicted by humanity on fellow man. We all want to seek justice. But under legislation you may be considering, this admirable goal would not lead to more justice to survivors. Indeed, allowing for litigation of these claims in US would NOT help survivors and to the contrary is likely even harm them. While cruelly raising false hopes for those who can least afford them, passage of the legislation also would negatively impact upon the
"First, I will address the emergence of the
"Second, I will suggest that legislation, similar to S.258, as circulated last year, threatens the integrity of the
"Fifth, because of the shortness of the notice for this hearing and for health reasons no survivor is testifying today against any proposed legislation similar to S.258, But I know that there are many Holocaust survivors and survivor organizations opposing the legislation. I have been privileged to work with and continue to work with Holocaust survivor leaders, such as
""S. 466 will raise unreasonable hopes, setting up false expectations for survivors only, in the end, to disappoint them. Litigation of the sort envisioned by the bill will be lengthy and costly, especially since the issue of attorneys' fees are not addressed by the proposed legislation. As a result, unless the bill is really intended as a class action tool to benefit certain attorneys, few claimants will be able to sue individually"
"His concern then, as now, is that this legislation, supported by lawyers who will benefit from filing cases, falsely raises the hopes of Holocaust survivors when in fact the survivors would have little chance of success in Court. Such legislation risks jeopardizing future agreements and settlements that I lead along with
"Our mission to achieve a measure of justice for Holocaust survivors and heirs is ,far from complete. There are many open issues and agreements yet to be negotiated in Central and
"
Background
"Since the end of the Second World War, restitution for Nazi crimes has been an important policy objective of the United States Government. Unfortunately, the ability of the United States Government to seek restitution and compensation for many individuals was compromised during the Cold War. Efforts to seek funds directly from European companies were particularly hindered in this regard. Following the end of the Cold War, however, the United States Government's policy was to seek justice and to do so with urgency. We wanted to ensure that survivors and their families received justice, but it was equally important that they get some measure of justice quickly. The fifty-year duration of the Cold War meant that time was running short.
"The twin goals of justice and urgency gave life to what became the fundamental policy of
"Defenses which defendant companies and governments could use in lawsuits including post-War settlements, transaction costs including attorneys' fees, statutes of limitation and rules of evidence, as well as the burden of proof that would apply to survivors' claims in
Emergence of the ICHEIC Process
"The ICHEIC process emerged initially not from our efforts inside the federal government, but rather from the impetus provided by the insurances regulators of a number of states. The initiators of the ICHEIC process were
"In the spring of 1998, the insurance commissioners and Holocaust survivor organizations invited the
"Our support for the ICHEIC process was premised on the Government's interest in obtaining as quickly as possible some measure of justice for Holocaust victims and their families, including many
"At the time, I was at the
"We also felt that we had to ensure the inclusion of the broadest possible number of companies and countries because, as a practical matter, the state insurance regulators had influence over only those European companies with significant operations in
"So, as I met with the heads of insurance companies or other insurance company representatives, I put them in touch with
"As you know, ICHEIC was chaired by former Secretary of State,
"The
* The
"West German Chancellor Konrad Adenauer expressed, in
"On behalf of the
"I met with the Prime Minister of
"It is important for the Committee to understand that the ICHEIC process emerged voluntarily. It was not forced on the insurance companies. New York Insurance Superintendent Levin once described the theme of the effort to establish ICHEIC as "voluntary action based on a moral foundation."
"It is also important for the Committee to appreciate that support for the ICHEIC process was bipartisan. After the
"ICHEIC and the insurance claims it processed were only one part of the
"The single largest piece of the broader effort was the Executive Agreement between
"After 18 months of very difficult negotiations, on
"As an initial matter,
"In typical settlement negotiations with foreign countries, the United States Government is the sole party negotiating on behalf of, and seeking to protect the interests of, individual American claimants. In the case of our Holocaust-related negotiations, however, the interests of the survivors and heirs were represented by a number of different groups, each of which had every reason to seek the best settlement possible. First, they were represented by a number of
"Third, Jewish groups, such as the
"As shown, the interests of survivors and heirs were broadly and vigorously represented throughout the negotiations, and in the end, all parties accepted the Foundation "Remembrance, Responsibility and the Future" I negotiated with the German government and private sector as a worthy result. The
"The most difficult issues in our German negotiations were the scope of the beneficiaries to be covered -- not just Jewish slave laborers but also non-Jewish forced laborers, for example; the total amount to be paid-in by
"The 26 members on the board of trustees included representatives of the German Government, the
"Ultimately, we reached a solution whereby
"The
"By the time I left government in
"It must be said that ICHEIC got off to a painfully slow and expensive start due to the complexity of the issues and the distrust of the parties. Eliminating that distrust took years, but in the end, ICHEIC was able to achieve its mandate of providing some measure of justice for Holocaust survivors and their heirs as quickly as possible.
"ICHEIC ultimately was successful. It paid
"ICHEIC paid claims regardless of whether the company which issued the claimant's policy was actively participating in the ICHEIC process. This is important, because it meant that individuals who owned policies issued by companies that were liquidated, nationalized, or otherwise no longer existed, could still submit a claim to ICHEIC and be paid the full value of the claim. Approximately
"Much has been made of the amount paid by ICHEIC - approximately
"Certain data - the size of the insurance market in a certain country and the Jewish population of that country is not controversial. The question of the Jewish propensity to insure - generates more discussion. It is known that Jews insured at a higher rate than the general population but it is unclear at what number - in any event this fact is not determinative. The factors that can change the estimate of the value of unpaid policies by the greatest degree are (1) percentage of policies unpaid (2) how to convert the values of the currencies in 1938 currencies into US dollars ($) (3) how to determine the present day valuation of these US Dollars. How these questions and assumptions are answered can result in radically different estimates as to the value of unpaid policies today.
"While the amount paid by the companies to ICHEIC is lower than the amount estimated by some, both the
"In its report "Insurance Industry and the Economies of Central and
""In order to evaluate how effectively it fulfilled its mission, however, others have attempted to calculate the present day value of the universe of outstanding policies and compared this to the amount paid out through the ICHEIC process. The process of calculating current value implies many areas where estimates and assumptions must be made and it is possible to produce a wide range of estimates using assumptions that can be well defended. This is particularly true because ICHEIC produced a range of estimates rather than a single estimate..." In 2011, the HCPO report pointed out that by far the largest and most developed insurance market was in
"Director of the HCPO
""The calculation [of the value of the prewar insurance market] yielded a
"Victims of Nazi persecution made up a small percentage of the prewar population of the largest European insurance market (
"In the final analysis, ICHEIC successfully compensated individuals for their Holocaust - era insurance policies. Much has been said about the substantial administrative costs ICHEIC incurred, which amounted to approximately 17.4% of the funds it paid out.
"But it is important to understand what is included in this 17.4% figure. It includes all costs incurred by ICHEIC in publicizing its programs; in the difficult task of researching all claims at no cost to the claimants; in creating and staffing
Proposed new legislation could Jeopardize
"The United States Government's policy on Holocaust restitution and compensation matters was and is that claims should be resolved through negotiation and cooperation, using administrative processes without payment of attorneys' fees, and not through a slow, costly, uncertain adversarial process like litigation. The policy is based on a belief that it was necessary to work with our European allies and other interested parties to secure restitution and compensation as quickly as possible. The policy also recognizes that litigation presents what would be, in the vast majority of cases, prohibitive barriers to recovery -- including statutes of limitation, rules of evidence, and burdens of proof -- and significant transaction costs in the form of high attorneys' fees. The policy is based also on consideration of
"The approach that was taken by S.258 is squarely at odds with this United States Government policy. The bill provides for an adversarial, litigation process. It imposes the probability of litigation on companies that have cooperated fully with the United States Government and in the ICHEIC process and that have paid tens of millions of dollars in an effort to satisfy their obligations. It further imposes the probability of litigation on companies that have been deemed by the United States Government to be entitled to "legal peace," thereby undermining the word and credibility of the
"I am concerned with two groups of companies that could be subjected to litigation under the bill. First, are the German insurance companies. These companies participated in the ICHEIC process pursuant to the Executive Agreement between
"The second group of companies are those that participated fully in the ICHEIC process without the benefit of an Executive Agreement calling for a Statement of Interest in the event of litigation. While there was no technical legal peace extended by the
"The consequences of upsetting
"Third, the United States Government continues to seek agreements with other governments and industries that have not yet dealt fully with Holocaust restitution and compensation. Its ability to negotiate likewise would be impaired. In
"Countries and companies will be unwilling to negotiate with survivors' groups or the United States Government if it appears to them -- not unreasonably -- that
"Legislation Will Not Increase the Likelihood of Recovery on Holocaust-Era Insurance Claims, and Will Subject Them to Lengthy, Costly, Uncertain Litigation with High Levels of Proof and Technical Defenses They Would Have Difficulty Overcoming
"The ICHEIC process included extremely favorable rules for claims processing. HCPO 's research indicates that over 85% of the insurance com panies doing business in
"Rather than being required to prove his or her claim by a "preponderance of the evidence," a Claimant before ICHEIC was required only to prove that his or her claim was "plausible." Even in the absence of evidence establishing plausibility, thousands of Claimants received humanitarian payments which required an even lesser showing.
"Claims were paid for defunct companies or those that had been nationalized during the post-war Communist era.
"Participants in the ICHEIC process likewise were not bound by any rules of evidence. The insurance companies agreed to these relaxed standards of proof, far more lenient than any court of law would require.
"Finally, claims were resolved through the ICHEIC process at no cost to Claimants -- unlike costly discovery in lawsuits. This included considerable research ICHEIC performed to help Claimant's develop their claims.
"The
"I would urge that any attorneys or others with potential insurance claims give them to HCPO for resolution. This is a request I made a decade ago.
A Better Way Forward
"At the conclusion of the ICHEIC process, the participating European insurance companies provided undertakings that they would continue to process claims using the valuation guidelines and relaxed standards of the ICHEIC process. A copy of those commitment letters were provided by
"According to information from the GDV (available on their website https://www.gdv.de/en/issues/our-news/compensation-of-insurance-policies-of-holocaustvictims- 16160), since
"This Committee might usefully decide that one way forward should be to have those companies submit periodic reports to an appropriate office of the United States Government on their claims processing. This reporting should include the number of new Holocaust-era claims submitted, the number granted, the reasons for any refusal, and the amount offered in compensation. The report could be submitted to the
"
"Further, it is currently possible to search the list of approximately 500,000 names of potential Holocaust era insurance policyholder names at the Yad Vashem website (on https://www.yadvashem.org/pheip/ICHEC_Search.ASP) . There should be notices in
Conclusion
"In conclusion, I would simply like to say that I appreciate and share the emotions which motivate the desire on the part of
"At the same time, I would support legislating a reporting requirement to ensure that European insurers pay claims in the future under ICHEIC standards and do so with continuing Congressional supervision. I would support notification of the existence of the searchable ICHEIC list of names and renewed efforts to inform the public of the availability of claims processing by the ICHEIC companies and assistance by the HCPO.
"Finally,
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