A California panel looking into Holocaust-era insurance claims has received an offer from a German company that one state official simply calls “shameful.”
On Feb. 17, Munich Reinsurance Company responded to a court-imposed deadline and offered access to hundreds of policies written between 1920 and 1945.
However, the company would not guarantee that California Department of Insurance investigators who came to Germany could do anything more than view the records, citing German law. Investigators, for example, couldn’t make photocopies of documents.
Dan Edwards, California’s deputy insurance commissioner, deemed Munich Re’s offer “disingenuous.” The world’s largest insurer of insurance companies is on the road to facing sanctions and perhaps losing its right to do business in this state, he added.
“With the eyes of more than 20,000 California Holocaust survivors directly on them,” Edwards said, “they had an opportunity not only to do the right thing, but to abide by the stipulation they had entered into freely. Instead, they chose the route of delay and obfuscation, which is nothing short of shameful.”
Five months ago, Munich Re entered into an agreement with California to provide access to Holocaust-era policyholder lists and other documents.
Munich Re promised to open the files of a Dusseldorf-based insurance company, Victoria, with which it is strongly linked. California has received about 50 claims against Victora, Edwards said.
At a hearing two weeks ago, Munich Re’s progress was challenged by lawyers working on behalf of the state. An administrative law judge set a Feb. 17 deadline for Munich Re to fulfill the agreement.
Edwards said Munch Re’s offer on that date was “insufficient.” He said California officials wanted access to the records without any stipulations.
“The bottom line is that the information is there and it’s damning and they don’t want it to come out. It’s just another avenue of delay,” said Edwards, who is part of the state’s effort to develop a registry of Holocaust victims, survivors and their heirs who might have unpaid insurance claims.
However, a lawyer for Munich Re told Reuters that the offer was “extraordinary” because it allowed California regulators to review records on site in Dusseldorf.
The arguments were set to continue Wednesday in a hearing in San Francisco.
At that hearing, Munich Re was expected to argue that it shouldn’t even be subject to California regulations because it never issued insurance policies to individuals.
Munich Re also planned to stress that it cannot speak on behalf of Victoria.
However, in a brief filed last month, a lawyer working on behalf of the state of California insisted that Munich Re “controls” Victoria through a 60 percent ownership of ERGO Insurance Group, which in turn owns 99 percent of Victoria.
If the judge rules for California on the question of jurisdiction, Edwards said, “we are contemplating going to a full investigatory hearing, really putting them through the ringer.” Munich Re could face fines and its U.S. affiliate, American Reinsurance, could lose its right to do business in California.
Starting April 6, a new law enables state Insurance Commissioner Chuck Quackenbush to begin proceedings that can yank the state licenses of companies that don’t make broad disclosures of policies issued in Europe from 1920 to 1945.
Edwards called it a “pretty grueling, time-exhausting process,” but one the state might be willing to pursue against Munich Re.