Insurers try to block states Holocaust Registry Law

A handful of European insurance companies and their U.S. subsidiaries argued before a federal judge Tuesday in Sacramento that California's Holocaust Registry Law should be declared unconstitutional.

The companies are trying to block the California Department of Insurance and its commissioner, Chuck Quackenbush, from forcing them to hand over lists of policies sold in Europe from 1920 through 1945.

The embattled Quackenbush didn't appear at the three-hour, U.S. District Court hearing, instead spending much of the day in testimony before an Assembly committee investigating him.

Federal Judge William Shubb gave no indication of when he will rule on the Holocaust insurance issue.

"It's really hard to know," Frank Kaplan, an attorney for the Department of Insurance, said by phone after the hearing. "It could be anywhere between a week and a month."

The insurers — including Allianz AG, AXA, Generali, Winterthur, Zurich Financial Services and more than 80 of their U.S. affiliates — filed four separate lawsuits challenging the constitutionality of the state's Holocaust Registry Law, officially known as AB 600.

Passed last year by state legislators, it allows the insurance commissioner to strip insurance companies of their California licenses if they don't turn over requested policy-holder lists.

The lists, which will aid policy-holders and their heirs in collecting unpaid claims, were supposed to be due April 7, but Quackenbush had agreed to delay implementation of the law until after the hearing.

"In our arguments, we focused largely on the commerce clause," said Paula Nowakowski, a spokesman for the American Insurance Association, the legal counsel for five companies that did significant business in pre-World War II Europe.

The California law violates the U.S. Constitution's commerce clause, which allows only the federal government to regulate commerce with foreign companies, Nowakowski said.

Kaplan was particularly critical of a motion for a preliminary injunction that would prohibit the Department of Insurance from implementing the law. He argued to have that motion dismissed.

"What they're really trying to do is stall," Kaplan said, making the argument that many policy-holders are old and dying, and that the beneficiaries don't realize they're entitled to unpaid claims.

In an unrelated development, a California foundation recently pulled $119 million out of an investment fund managed by Pimco.

A spokesman for the California Community Foundation said the "difficult but morally correct" decision was made because Pimco's parent company, German insurer Allianz AG, has failed to comply with the state's Holocaust insurance law.

The withdrawal marked the first time a philanthropic group has taken action over the Holocaust insurance issue, foundation spokesman Allan Parachini told Reuters.

The California Community Foundation makes donations to community charities and has an endowment of $540 million, Parachini said.

Allianz acquired the Newport Beach-based Pimco in a $3.3 billion deal May 5.

Andy Altman-Ohr

Andy Altman-Ohr was J.’s managing editor and Hardly Strictly Bagels columnist until he retired in 2016 to travel and live abroad. He and his wife have a home base in Mexico, where he continues his dalliance with Jewish journalism.