Statement of the

 

Honorable Lawrence S. Eagleburger

 

before the

 

U.S. House of Representatives

 

Committee on Foreign Affairs

 

Subcommittee on Europe

 

Hearing on America’s Role in Addressing Outstanding Holocaust Issues

 

 

                                               

 

Submitted October 15, 2007

Under terms of unanimous consent agreement

adopted by the subcommittee at the October 3, 2007 hearing

 

           

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Members of the Committee:

 

It is unfortunate that no one representing the International Commission on Holocaust Era Insurance Claims (ICHEIC) was invited to testify at the October 3 hearing on “America’s Role in Addressing Outstanding Holocaust Issues.”  Given the extensive discussion of the Commission’s work at that hearing, I appreciate being provided this opportunity by unanimous consent of the subcommittee to submit this statement to respond to several of the questions raised about ICHEIC during the course of the hearing, and to correct the record with respect to the many inaccurate allegations made. 

 

I will detail why the Commission’s members – representatives of Holocaust survivors’ organizations and the State of Israel, U.S. state insurance regulators, and European insurance companies alike – believe we were largely successful in accomplishing the Commission’s mission, identifying and compensating previously unpaid insurance policies.   I will then address specific repeated misrepresentations on two issues: (1) how the Commission assessed the scope/size of the European pre-Holocaust insurance market relevant to Holocaust victims and their heirs, and how ICHEIC’s $550 million overall settlement and $305 million in paid claims should be analyzed within that context; and (2) the role of the Commission’s published lists within the overall scope of the work of the Commission, and the relative utility of publishing more names going forward.

 

The Commission concluded its work with more than $305 million paid to Holocaust victims or their heirs for previously unpaid insurance policies.  Of this amount, more than half went to individuals with so little information about their potential claim that they were unable to identify a policy or name a company that was the source of their claim.  Nearly $200 million more was distributed or obligated for humanitarian purposes. 

 

As part of the ICHEIC process, we examined insurance company files, built a database constructed from research in archives across Europe, worked to make sure potential claimants world-wide knew how to file claims, developed a web site to provide easy access to information about our efforts, established a system to process the more than 90,000 claims submitted, and established an independent appeals system presided over by jurists who, over the life of the appeals process, reviewed hundreds of appeals that provided every claim that named a company the opportunity for review.  The relatively small percentage of reversals on original decisions underscored the strength of the initial system of checks and balances we had constructed, which included internal ICHEIC staff verification of every company decision, and outside independent audits of companies' records and decision-making practices to ensure they complied with ICHEIC rules and guidelines.   

 

 

 

 

 

The Commission established independent third-party audits for the claims review processes of each participating company and partner entity, to assess the status of existing records, and ensure that records were appropriately searched and matched, in accordance with ICHEIC rules and guidelines.  (The ground rules for these audits were dictated by written agreements that ICHEIC entered with its participating companies and partner entities, reviewed and ultimately approved by ICHEIC’s Audit Mandate Support Group, a Commission committee on which regulator and Jewish organization representatives served.)[1]

 

In the course of efforts that resulted in payments of more than $305 million, the Commission directly or through its member companies/partner entities offered payment to more than 48,000 of the 91,558 who made inquiries.  Only a small percent of all the claim forms the Commission received named a specific company.   Far fewer contained policy documents.   Despite assertions to the contrary, neither policy documents nor death certificates were required by the Commission’s standards of proof.  Some portion of those who did not receive Commission offers had been previously compensated.   The vast majority of claims for policies that originated in Germany were compensated under previous reparations efforts by the German government.  Under the Commission’s guidelines, research was conducted on each relevant claim to determine whether such previous compensation had occurred. Given these factors, I would note again the significance of awarding more than half of the $305 million plus to individuals who were unable to identify a policy or name a company that was the source of their claim. 

 

Now I must turn to an erroneous allegation that Chairman Wexler repeated throughout the hearing, and which is referenced as well in the Ros-Lehtinen legislation, H.R. 1746. Mr. Wexler stated that the more than $300 million paid to Holocaust victims or their heirs through the ICHEIC process was less than 5 percent of the total amount owed.  This seems to form the primary basis for his views with respect to the Commission’s unfulfilled mission.   Neither Mr. Wexler nor the legislation in question provides any substantiation for the figures they cite.

 

By way of contrast, I would direct Mr. Wexler and Members of the Committee interested in assessing actual data on this issue to the Pomeroy-Ferras report, available at www.icheic.org.   In October 1999, I appointed Glenn Pomeroy, then North Dakota Insurance Commissioner and former President of the National Association of Insurance Commissioners (NAIC) and Phillippe Ferras (then Executive Vice President of AXA France) as joint chairmen of a task force to report on the estimated number and value of insurance policies that Holocaust victims held.  The task force was staffed by outside experts as well as ICHEIC members, and included economists Frank Lichtenberg from  Columbia University Graduate Business School and Helen Junz, experienced in pre-World War II market issues, as well as actuaries with the Office of the California State Insurance regulator and AXA-Paris.

 

The resulting report determined how the relative maturity of the various European insurance markets might have affected local populations’ access to insurance.   It provided an overall view of what total damages might be by trying to determine the Jewish population’s respective rates of participation in the life insurance market and to estimate the average value of life insurance policies, based on the scope of the insurance market and the size of the Jewish population in each country.  While the propensity of the Jewish population to insure was found to be 2-3x that of the regular population in a given country, the propensity of population country by country to insure differed significantly, and affects dramatically overall estimates of market size.   By way of example, Poland had a very significant Jewish population (at 3.3 million at that time, by far the highest in Europe) but also was a highly agrarian and among the poorest countries in the region.  In contrast, Czechoslovakia’s Jewish population, while a smaller percentage of the overall population, would have been likely to be far more highly insured given the maturity of the insurance market.   The Pomeroy-Ferras task force also discussed what proportion of policies in each market might be deemed to have remained unpaid.  

 

The Pomeroy-Ferras report also details some of the challenges that participants faced in accurately assessing the value of unpaid policies. While the task force reached consensus on the overall size of the each country’s insurance market and estimated the propensity of Jews to purchase life insurance, it was far more difficult to determine the number, average value, and percentage of unpaid Jewish-owned policies.

 

Given these considerations, the Pomeroy-Ferras report generally provided a range of figures in different categories for different markets. These ranges served to guide the Commission as it entered its deliberations on how to assess appropriate settlement amounts company by company (and in some cases, with national insurance associations) across markets in Europe.  In the case of the German market, for example, the settlement amount provided in the 2002 agreement between ICHEIC, the German Foundation, and the German Insurance Association exceeded the companies’ estimates of unpaid policies in Germany as well as the lower figures presented by the Jewish organizations. 

 

The various national commissions working to assess their own situations have confirmed the reliability of the Pomeroy-Ferras work.  For example, the Dutch commission’s data showed the insured sum of all policies surrendered to the Nazi authorities to be within 5 percent of the task force’s mid-range value for Jewish policy-holders.  The Belgian commission found results very close as well.  The French commission, when defining the policies that could have belonged to victims of the Holocaust, generated a number that fell within the mid-range of the task force’s number for France.   The total overall settlement reached by the Commission with all its entities, approximately $550 million, was premised on the Pomeroy-Ferras work, and has thus proven the test of time, both with respect to more than $305 million paid out in claims, and the remaining amount going to humanitarian activities to honor the memory of those who were not able to make claims directly.

 

Turning to the issue surrounding list publication, here too I would like to try to shed some light, in contrast to the noise that was more prevalent during the hearing.   Since ICHEIC’s mission was to find potential claimants, identify unpaid Holocaust era insurance policies, and settle valid insurance claims at no cost to claimants, the number of claimants uncertain whom among their relatives might have been insured were among the Commission’s challenges.  So the Commission sought to maximize opportunities to identify policies and “match” policies with claims, even when submitted claims might have contained little accompanying documentation.  The Commission did so by supplementing the information that claimants provided with relevant archival information ICHEIC identified through our research and matched against relevant policy-holder lists through agreed-upon procedures.   This research and matching work identified thousands of policies related to claims where the claimant was not able to name a company.

 

Under the Commission’s process, in keeping with our mission of reaching out to the broadest possible universe of interested parties, ICHEIC published its research and the 519,009 potential Holocaust-era policy-holder names on its website.  ICHEIC published all names relevant to claimants seeking return of Holocaust-era life insurance policies during the relevant period and who were thought likely to have suffered any form of racial, religious, or political persecution during the Holocaust.  In so doing, however, the website also carried a clear warning that finding a name on the website was not evidence of the existence of an uncompensated policy. There were many similar names with spelling variations, as well as previous compensation programs, and policies that might have been cashed out or paid up during pre-Holocaust periods.

 

The legislation discussed at the hearing, introduced by Ms. Ros-Lehtinen, would mandate publication of all policy-holders during the entire relevant period.  I described at some length in previous testimony before the House Government Reform Committee (on September 16, 2003 and written responses to questions submitted after that hearing on October 23, 2003, available at www.icheic.org) why such mandatory publication will not serve the interests of Holocaust victims or their heirs, while posing an unmeetable burden on companies who already have fully complied with the commitments they made to the Commission, and who have further committed to continuing to process all claims  they receive, indefinitely.  

 

In short, ICHEIC companies had to identify which policy-holders might potentially fit the definition of Holocaust victim.[2]   For companies with many surviving records, this presents a considerable challenge.  In most instances, insurance companies did not identify policy-holders based on racial, religious, political, or ideological factors. Filtering on the basis of last names also was not possible given the inability to differentiate many German last names from distinctly Jewish names. The name Rosenberg, for example, often believed to be a typical Jewish name, was also the name of one of the Nazi party’s highest ranking ideologues.  Similarly, Anne Frank shares her last name with the notorious governor-general of occupied Poland, Hans Frank, who was hanged at Nuremberg.

 

ICHEIC’s published lists result from working closely with archival experts in Germany, Israel, the United States, and elsewhere, and drawing on information from company policy-holder records.  It is most important to emphasize that the Commission lists culled out from an overall list of policy-holder names that are those most likely to have been persecuted during the Holocaust.  It also however contains names far beyond those likely to have previously uncompensated policies.   Ms. Ros-Lehtinen’s legislation would cast a far broader net, resulting in publication millions of policy-holder names, to the extent companies were legally and practically capable of complying, and yet a very small percentage of the published names would be relevant to ascertain those who were persecuted during the Holocaust.

 

Finally, I want to address two additional erroneous assumptions that Chairman Wexler in particular seemed intent on promulgating: that supporting legislation introduced by Representative Ros-Lehtinen and using records from the Bad Arolsen archives will somehow help Holocaust victims and their heirs to gain increased access to previously uncompensated Holocaust-era insurance policies.

 

With respect to Bad Arolsen, while the increased public accessibility to Bad Arolsen archives is important because it means that researchers and historians can now access information related to persecution that only survivors and their relatives could access in the past, it does not mean individuals would have opportunities to further enhance their claims against European insurers.  The increased accessibility would not generate information that could lead to more eligible Holocaust era insurance claims than identified through the claims and appeals processes of ICHEIC, for two reasons: (1) ICHEIC always assumed that a person was persecuted unless information was presented that pointed to the contrary; (2) ICHEIC offered full valuation in instances where it was unclear when a person died.  The Bad Arolsen records offer information that shows persecution or shows a date when a policyholder died.   Moreover, because survivors and their relatives, and the families of those who did not survive, could access these records already, as could their representatives, the Commission already had full access to this information.

 

The Ros-Lehtinen legislation is egregious for any number of reasons, some of which I hope I already have made clear.  Most ironic is that it establishes a new federal cause of action – and thus purports to offer new routes to litigation – for cases that already have been shown to be highly unlikely to reach successful outcome in courts for Holocaust victims and heirs.  The Commission was created in part to try to help individuals without the expense and documentation that the litigation route requires.   Her bill contains inaccurate and misleading statements about the work of ICHEIC as well, both in scope and substance.  Creating new lists would mislead and create false expectations for Holocaust survivors and heirs, while perhaps obfuscating the bill’s less noble intended purposes and beneficiaries.   This is particularly wrong given that those individuals ICHEIC was created to serve can continue to file claims directly with the companies affiliated with the Commission, since these companies have committed, prior to ICHEIC’s closure, to continue to process new claims. It also breaks faith with the many who cooperated fully with the Commission, as our audit records and other documents will attest.

 

In closing, I recognize that no Commission can resolve the wrongs done by the Holocaust.  I firmly believe, however, that our efforts brought some measure of justice to the lives of thousands of survivors, their families, and the families of those who did not survive. 

 

 


[1] When Congressman Engel referenced a particular company’s inability to find a record of a specific policy continuing to be in effect in a given year, despite an individual holding a “water copy” of such policy, he is referencing a company for which the independent audit had verified a particularly extensive documentary record of historical policy information over a given set of years.  Congressman Engel is well aware of this situation, and the related Commission rules and guidelines, as my staff and I have communicated with him extensively on this issue, and with his constituent about his claim, over the years. Under the Commission’s rules, if a company’s records were found to be comprehensive for a time period in question, as determined by the agreed upon audit process, the company could assert that lack of registration of a given policy in its records as evidence that such policy was no longer in effect with that company.   The policy-holder in question may have cashed it out at an earlier time, for example, before the Holocaust.

 

[2] ICHEIC took as its definition of Holocaust victim or persecutee the German federal indemnification legislation definition, as follows, anyone who: “was deprived of their life, suffered damage to their mental or physical health; was deprived of their economic livelihood; suffered loss or deprivation of financial or other assets; suffered any other loss or damage to their property; as a result of racial, religious, political or ideological persecution by organs of the Third Reich or by other Governmental authorities in the territories occupied by the Third Reich or its Allies during the period from 1933 to 1945.”