Transamerica is off the hook, but an international commission looking into Holocaust-era insurance claims is on the hot seat.
The World Jewish Congress called off a boycott against the S.F.-based insurance giant last week when Transamerica’s parent company joined a panel probing Holocaust-era insurance claims.
Aegon, along with Holland’s other biggest insurers, Fortis and ING, signed a memorandum of understanding on May 24, increasing to eight the number of major European insurers that have joined the commission.
They are now subject to the terms and procedures of the commission, which include disclosing policy-holder lists and making good on prewar policies.
However, there is now skepticism regarding whether or not the International Commission on Holocaust-era Insurance Claims is doing its main job — getting insurance companies to honor their unpaid claims.
Jack Mahan, the spokesman of a group representing the interests of Californians in Holocaust-insurance matters, said the commission is “failing horribly.”
He cited a recent Los Angeles Times report stating that European insurers are rejecting three out of every four claims seeking to recover on policies issued between 1930 and 1945.
“The international commission is not serving the interests of survivors,” said Mahan, of the California Holocaust Insurance Settlement Alliance.
“They are not making the survivors their first priority. The insurance companies are able to delay the process, and they are prevailing on issues.”
Nancy Sher Cohen, an attorney in Los Angeles who is working on a class-action lawsuit against an Italian insurance company, was even stronger in her criticism.
Speaking on behalf of her clients, she said, “We think the international commission is bogus.”
Because of so many delays — first getting companies to join, then seeking policy-holder lists, then trying to get claims paid — the commission actually serves the insurance companies better than it serves survivors and their heirs, Cohen claimed.
“The commission [serves] as just another way to stall people from getting paid,” Cohen said. “We’re talking about elderly people here, and every day they’re not paid is a day when some of them might die.”
Moreover, she added, “the international commission is completely voluntary. There is no compulsion for the company to pay [an unpaid claim]. If they don’t pay, there’s nothing anybody can do.”
The Los Angeles Times report said that the five companies participating in the international commission before last week had agreed to settle 124 of 909 claims submitted. The companies had rejected 393 claims and the remainder had been pending for more than 90 days.
Elan Steinberg, the executive director of the WJC, an advocacy group that sits on the international commission, said he was aware of the problem and that it was the “fundamental issue we’re going to have to deal with in June.”
The commission, headed by former U.S. Secretary of State Lawrence Eagleburger, has scheduled a June 21 meeting in London.
Steinberg admitted that the desired success was not being achieved “despite the millions of dollars that have been paid.”
In some instances, he added, companies have agreed to make payments, but have never gotten around to issuing a check.
“The insurance companies were supposed to have acted in good faith,” Steinberg lamented. “The bigger issue is that it’s been a struggle every step of the way. Now we have to work to insure that the process works better.”
The director said an appeals panel will be put in place to ensure that claims get paid. While the companies will be given an opportunity to act in good faith, the panel offers claimants to at least have some recourse.
Another “struggle every step of the way” for Steinberg was getting Aegon, Fortis and ING to join the commission, which finally happened last week.
Aegon, the world’s seventh largest insurer, made overtures that it was ready to join the panel in February and again in March.
Steinberg had been prodding Aegon and threatening a WJC-sponsored boycott against Transamerica in December — and by January it was launched.
Aegon had purchased Transamerica the previous July for $10 billion.
Two months into the boycott, Aegon USA officials discounted its impact. “The boycott has not made a big difference,” Don Shepard, Aegon USA’s president and CEO, told Reuter’s at the time. “It’s not really on people’s radar screen.”
In the end, what might have sparked the Dutch insurers to join was ING’s $6.1 billion purchase last month of ReliaStar, a Minneapolis-based life insurance company.
Minnesota officials said they were going to take ING’s record on Holocaust-era insurance issues into account when reviewing the purchase, a stance that likely would have delayed a deal.
“It was crucial,” Steinberg said of the pressure the state applied to ING. “That was clearly hanging over their heads, and I think that in the last few days, ING became the company most eager to resolve this issue.”