Holocaust-Era Insurance Claims





Statement of
Baird Webel
Specialist in Financial Economics
Before
Committee on the Judiciary
U.S. Senate
Hearing on
“Holocaust-Era Insurance Claims”
September 17, 2019
Congressional Research Service
https://crsreports.congress.gov
TE10038




Congressional Research Service
1
Mr. Chairman, Ranking Member, and Members of the Committee, thank you for the opportunity to testify
before you today. My name is Baird Webel. I am a specialist in Financial Economics at the Congressional
Research Service (CRS) focusing on non-health insurance, including such topics as terrorism insurance,
the Dodd-Frank Wall Street Reform and Consumer Protection Act, and the role of the insurer AIG in the
2008 financial crisis. I have been in this role at CRS since 2003 and have written about Holocaust-era
insurance during past Congresses. CRS’s role is to provide objective, nonpartisan research and analysis to
Congress. CRS takes no position on the desirability of any specific policy. Any arguments presented in
my written and oral testimony are for the purposes of informing Congress, not to advocate for a particular
policy outcome.
My testimony today will begin with a brief background on insurance and the post-World War II efforts to
provide compensation and restitution. I will then provide details on the International Commission on
Holocaust Era Insurance Claims (ICHEIC), including one of the central issues faced by ICHEIC or by
any attempt to provide compensation—the current-day valuation of policies issued many decades ago. My
testimony will conclude with a discussion of past congressional concerns and legislative attempts to
address these issues. It is substantially based on previous work at CRS that was coauthored by my
colleague Paul Belkin.
Pre-World War II Insurance
Insurance markets in pre-World War II Europe were well developed, with many life insurance policies
going further than providing benefits to a family in the case of the policyholders’ death. In addition to
providing such benefits, these policies often acted as savings vehicles, similar in some ways to what are
known as whole life insurance policies in the United States today. For example, life insurance policies
were often purchased intending to provide for a son’s education or a daughter’s dowry. Such a policy
might have run for 20 years, with the policyholder committing to make periodic payments and the
insurance company committing to pay a certain sum, known generally as the “face value” of the policy, at
the end of the 20 years, or upon the policyholder’s death. Such a policy generally would have cancellation
provisions that would allow a policyholder to obtain a “surrender value” prior to the policy’s intended
end, or, if a policyholder wished to keep the contract but not pay further premiums, it could be converted
to “paid up” status, which would result in a smaller face value at the end of the policy.
In the run-up to World War II, the Nazi government made a concerted effort to confiscate assets belonging
to Jews in Germany and in various occupied countries.1 At first, these efforts were largely indirect, such
as placing high taxes or fees on those emigrating, which necessitated the liquidation of many insurance
policies. Later, the confiscation was more direct, with, for example, insurance companies being required
to pay insurance proceeds from claims or a policy’s cash value directly to the government. 2
General Postwar Compensation Efforts
The 1952 Luxembourg Reparations Agreement between the Federal Republic of Germany (West
Germany), Israel, and the Conference on Jewish Material Claims against Germany (Claims Conference)
marked the first and most significant of a series of postwar West German initiatives that have resulted in
total German government payments of an estimated $84 billion (about €76 billion) to Jewish and non-

1 Professor Gerald D. Feldman, a historian at the University of California, Berkeley, conducted extensive research into the Nazi
seizure of insurance assets. See, for one account, Chapter 6 of his work Allianz and the German Insurance Business, 1933-1945,
(Cambridge, UK: Cambridge University Press, 2001).
2 This was the case, for example, with regard to property damage claims from the anti-Jewish riots on Krystallnacht, November 9,
1938, as well as with life insurance policies.
CRS TESTIMONY
Prepared for Congress —————————————————————————————————

Congressional Research Service
2
Jewish victims of Nazi crimes and their heirs.3 Although most agree that Germany will never be able to
adequately compensate for Nazi atrocities, many scholars and advocates for Holocaust victims have
commended the compensation and restitution efforts of successive German governments.4
The governments of other Western European countries known to have collaborated with the Nazis also
undertook compensation efforts in the years after the Second World War. However, with the possible
exception of those in the Netherlands, these efforts are generally thought to have been less comprehensive
than West Germany’s. In the years following the war, these countries, whose economies had been
devastated, tended to argue that Germany should assume responsibility to compensate for Nazi crimes.
The communist governments of East Germany and Central and Eastern Europe offered minimal
restitution or compensation, if any.5
The fall of the Berlin Wall (1989) and collapse of the Soviet Union (1991) led to renewed efforts by
Jewish organizations, Holocaust survivors, and the U.S. and Israeli governments to obtain compensation
for survivors who had lived or continued to live in Central and Eastern Europe.6 Initial efforts focused
largely on property restitution and victims’ compensation for forced and slave labor. Simultaneously, a
series of class-action lawsuits against European companies were filed in U.S. courts on behalf of Jewish
Holocaust survivors; these lawsuits shed light on the fact that up to billions of dollars worth of assets
seized by the Nazis from individual citizens and deposited in private and national banks throughout
Western Europe had never been returned. In March 1997, the first class-action lawsuits focused
exclusively on the issue of unpaid Holocaust-era life insurance policies were filed in New York (the so-
called “Cornell Class Action” against 16 European insurers).
The mid-to-late 1990s’ class-action lawsuits against Swiss, German, Austrian, Italian, and French
companies brought widespread international attention to the issue of looted Holocaust-era assets, unpaid
insurance policies, and dormant bank accounts. Given the immense significance and sensitivity of the
issues, and the unprecedented nature of the legal cases before U.S. judges, the U.S. government sought to
facilitate settlement of the lawsuits through a series of complex agreements involving national and state
governments, class-action lawyers, private industry, and a variety of Jewish and other victims’ groups.
Most agree that U.S. Administration efforts to facilitate resolution of these claims by involving a range of
interested parties, including national governments, victims, and private industry, played an important role
in both securing support for and impeding subsequent legal challenges to the government-negotiated
settlements. The Clinton Administration took the lead in facilitating broad compensation agreements—
each with insurance-related components—with German, Austrian, and French companies and their
governments. The Clinton Administration also was involved in negotiating a settlement with Swiss banks,
although some U.S. officials contended that a lack of Swiss government involvement weakened that
agreement, which led to heightened international criticism of Switzerland. According to Stuart Eizenstat,

3 This figure represents the present-day value of all payments through the year 2018, as reported in German Ministry of Finance,
Compensation for National Socialist Injustice, January 27, 2018, at https://www.bundesfinanzministerium.de/Content/EN/
Standardartikel/Press_Room/Publications/Brochures/2018-08-15-entschaedigung-ns-unrecht-engl.html.
4 For more information, see CRS Report RL33808, Germany’s Relations with Israel: Background and Implications for
German Middle East Policy
, by Paul Belkin.
5 See, for example, Stuart Eizenstat (former U.S. Under Secretary of State and Deputy Treasury Secretary and lead Clinton
Administration negotiator on Holocaust compensation matters), Imperfect Justice: Looted Assets, Slave Labor, and the
Unfinished Business of World War II,
(New York: Public Affairs, 2003).
6 For additional background information on these efforts see ibid; John Authers and Richard Wolffe, The Victim’s Fortune:
Inside the Epic Battle over the Debts of the Holocaust
, (New York: Harper Collins, 2002); and Michael Bazyler, Holocaust
Justice: The Battle for Restitution in America’s Court
, (New York: NYU Press, 2003). For U.S. government documents and a
report on the 1998 Washington Conference on Holocaust-era Assets, see the electronic archive at https://1997-2001.state.gov/
regions/eur/wash_conf_material.html.
CRS TESTIMONY
Prepared for Congress —————————————————————————————————

Congressional Research Service
3
the Clinton Administration’s lead official in the negotiations, the damaging effects of a wave of
international criticism of Switzerland arising from its perceived poor handling of the “Swiss bank affair”
led the German, Austrian, and French governments to proactively seek to resolve pending lawsuits against
companies in their countries and stem the possibility of future lawsuits.7 Each of these governments
established broad settlement funds to compensate victims of forced and slave labor, looted assets, and
insurance policy theft, among other crimes; each also reportedly viewed U.S. government approval of
their compensation programs as a top priority. Official U.S. endorsement, it was believed, could ensure
that future lawsuits or settlement challenges would have difficulty succeeding in U.S. courts.8
Pre-ICHEIC Insurance Compensation Efforts
Historians agree that of all Holocaust victims, Jews were most likely to have owned substantial life and
other insurance policies. Efforts to honor unpaid insurance policies have focused almost exclusively on
Jewish victims. Initial postwar efforts in Western Europe to honor unpaid insurance policies belonging to
victims are widely considered to have been far less comprehensive than other compensation and
restitution programs. Several countries home to companies known to have sold such policies, including
Germany, Austria, Switzerland, and the Netherlands, passed laws in the 1950s and 1960s attempting at
least partially to honor these policies. However, a variety of factors led these efforts to fall short. These
factors included uncertainty regarding the present value of the policies, difficulties with verification of
policy ownership, disagreement over how to compensate the many Jews who were forced to either cash in
their policies or surrender them to the Nazis, and an insurance industry in dire economic straits.
As has generally been the case with postwar settlement issues, German and Dutch companies are thought
to have made greater efforts than other companies in addressing unpaid insurance policies after the war.
In the late 1990s, German insurance giant Allianz went so far as to claim it had honored approximately
70% of its wartime policies sold in Germany—either before the war ended or through its participation in
other postwar compensation programs.9 Critics disputed Allianz’s claim, arguing that policyholders were
often grossly undercompensated, both during the war and with a greatly devalued currency in the war’s
aftermath. Other countries home to companies known to have sold insurance policies throughout the Nazi
Reich, such as France and Belgium, did not administer any insurance-related compensation programs
until the 1990s; to this day, the Italian government appears to have involved itself in the matter minimally,
if at all.
The fact that many such Jews lived and purchased policies in Central and Eastern European countries that
later became part of the Soviet Bloc—primarily Poland, Hungary, and Czechoslovakia—proved to be a
significant complicating factor in postwar efforts to have these policies honored. Many of the companies
that sold insurance in these countries no longer exist; however, several Western European companies that
accounted for a significant portion of the Central and Eastern European markets continue to operate today.
Specifically, the Italian company Assicurazioni Generali S.p.A (hereinafter “Generali”) is known to have
been active in Central and Eastern Europe. Generali and others have argued that responsibility to honor

7 With regard to the importance of national government involvement, Eizenstat says, “My bitter experience with the Swiss
negotiations, in which the Swiss government refused to be a negotiating partner, taught me a lesson that I never forgot in joining
the German, Austrian, and French talks. I would never again risk the prestige of the U.S. government in trying to settle class-
action lawsuits against foreign companies, unless their governments were willing to become directly engaged ... Fortunately,
Germany, Austria, and France ... recognized that the reputation of their private companies reflected on their nations’ reputations.”
Eizenstat, op. cit., p. 341.
8 Ibid.
9 Statement of Mr. Herbert Hansmeyer, member of the Board of Management of Allianz AG. Washington Conference on
Holocaust-era Assets (1998), op. cit., p. 594.
CRS TESTIMONY
Prepared for Congress —————————————————————————————————

Congressional Research Service
4
these policies was transferred to state-run insurance entities by way of the state takeover and
nationalization of the industry under communist rule.10
The International Commission on Holocaust Era Insurance Claims
In 1997, in response to increasing claims against European insurance companies operating in the United
States, the National Association of Insurance Commissioners (NAIC) formed a Working Group on
Holocaust Insurance Claims to reach out to Holocaust victims and their heirs to better determine the scope
of the problem and to initiate a dialogue with European insurers about how to resolve the issue of unpaid
claims. A series of often emotional and contentious meetings between Holocaust survivors and their heirs,
insurance regulators, and insurance companies over the course of the next year resulted in a joint decision
to form an independent international commission to resolve unpaid claims.
In August 1998, the NAIC, six European insurers (Allianz, AXA, Basler,11 Generali, Winterhur, and
Zurich), the Claims Conference, the World Jewish Restitution Organization (WJRO), and the State of
Israel signed a Memorandum of Understanding (MOU) establishing an international commission tasked
with both identifying Holocaust victims who had purchased insurance policies from 1920 to 1945 and
administering the repayment of these policies. Although the U.S. federal government did not have a
voting representative on the International Commission on Holocaust Era Insurance Claims’ (ICHEIC)
board, state insurance regulators were officially represented through the NAIC and a State Department
representative was granted observer status.12 The board was chaired by former U.S. Secretary of State
Lawrence Eagleburger and included 12 other members: three NAIC representatives; two representatives
of Jewish organizations (the Claims Conference and WJRO); a representative of the state of Israel; and
six representatives of European insurers and insurance regulators.
ICHEIC members agreed that ICHEIC’s claims process would adhere to the following principles:
 The claims process would be free of charge to the claimant;
 ICHEIC would evaluate claims based on relaxed standards of proof—given that a
significant number of potential claimants did not possess policy documentation,
claimants would not be required to name a specific insurance company or provide
documentation of an insurance policy; and
 ICHEIC and participating insurance companies would conduct archival research to
establish a database of potential policyholders against which to match submitted claims.13
ICHEIC’s claims process opened in 2000 and closed in March 2007. It offered payments totaling
approximately $306 million to 48,263 of about 91,500 claimants. Of the roughly 48,000 claimants who

10 For example: “Generali branches in these regions were nationalized by the Communist governments that came into power
immediately after WWII, and consequently Generali lost ownership of the assets held in these countries as reserves for payment
of the policies (the insureds’ policies themselves also were nationalized). Generali decided for humanitarian reasons to make
payments on these policies to insureds and heirs…” Generali, “Holocaust-Era Insurance Programs,” at https://www.generali.com/
info/holocaust.
11 Basler subsequently withdrew from the International Commission on Holocaust Era Insurance Claims (ICHEIC). According to
German Insurance Association (GDV) representatives, claims against Basler were covered through the Association’s
participation in ICHEIC.
12 There is no federal regulator for insurance companies that are instead overseen by the individual states. The National
Association of Insurance Commissioners (NAIC) is a “standard-setting and regulatory support organization created and governed
by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories.” See NAIC, “About the
NAIC,” at https://www.naic.org/index_about.htm.
13 For additional background information on ICHEIC, see the ICHEIC Final Report, Finding Claimants and Paying Them, June
2007, at http://www.icheic.org/.
CRS TESTIMONY
Prepared for Congress —————————————————————————————————

Congressional Research Service
5
received ICHEIC payment offers, about 31,300 were offered one-time “humanitarian” payments of
$1,000. Observers and others involved in the process report that rejected claims were often determined to
have been honored under previous compensation agreements or were determined to fall short of the
relaxed standards established by the commission. Some critics contend that ICHEIC applied these
standards inconsistently, rejecting what were often valid claims.14
In addition to the funds paid to individual claimants, ICHEIC allocated $169 million to a “humanitarian
fund” overseen by the Claims Conference. According to Claims Conference guidelines, 80% was
designated to Holocaust survivors, and 20% to Holocaust education and remembrance.
Ultimately, ICHEIC received a total of about $550 million from participating insurers. Of this, $350
million was secured from German companies through a watershed 2000 executive agreement between the
United States and Germany, in which the German government and industry committed $5 billion to
compensate former forced and slave laborers and other victims of Nazi crimes.15 Of the remainder, $100
million came from Generali; $25 million came from a U.S.-Austrian executive agreement; $25 million
came from bilateral agreements between ICHEIC and Swiss insurers; and $50 million came from
agreements with the Dutch and Belgian insurance associations. In addition to the five insurers on
ICHEIC’s board, ICHEIC secured the participation of 75 other companies through bilateral agreements
with the German, Dutch, and Belgian insurance associations.
Despite ICHEIC’s closure, some European insurers, including members of the German Insurance
Association (Gesamtverband der Deutschen Versicherungswirtschaft, or GDV) and Generali, report they
are continuing to accept and honor legitimate claims based on ICHEIC’s relaxed standards of proof.
According to the GDV, between March 2007 and July 2019, the association received 520 inquiries that
resulted in the identification of 317 insurance policies. Of these policies, 130 were eligible for
compensation and 187 were determined to have been previously paid or compensated for. In total, GDV
companies report they have paid $3.2 million for claims brought since March 20, 2007.16
Administration Policy on ICHEIC
U.S. Administrations consistently endorsed ICHEIC as an important and unprecedented mechanism to
provide support and compensation to individuals whose insurance claims were believed unlikely to have
been satisfactorily resolved through existing legal channels. The Clinton Administration sought to secure
funding for ICHEIC and its claims process as part of the broader compensation agreements it negotiated
with the German, Austrian, and French governments in the late 1990s. In exchange for financial
commitments made to ICHEIC by German and Austrian companies by way of these agreements, the
Clinton Administration agreed to endorse ICHEIC as the exclusive mechanism for resolving unpaid
Holocaust-era insurance claims.
The Administration also sought to grant participating German companies so-called legal peace from
further action against them in U.S. courts by committing to file statements of interest encouraging
dismissal of any future legal action against German companies in the United States.17 This commitment

14 Such criticism was, for example, expressed by former New York Superintendent of Insurance and ICHEIC appeals arbitrator
Albert Lewis. See Stewart Ain, “Probe ‘Phantom Rule,’ Says Congressman,” The New York Jewish Week, July 6, 2007.
15 See U.S. Department of State, “German Foundation,” at https://www.state.gov/german-foundation/.
16 GDV, “Post-ICHEIC Statistics (AVHO),” July 1, 2019, at https://www.en.gdv.de/resource/blob/29874/
adcb184cc070366c005d2e5630272e04/inquiries-received-by-german-companies-since-the-conclusion-of-the-icheic-
compensation-data.pdf.
17 President Clinton’s National Security Adviser Samuel Berger summarized the U.S. commitment to give German companies
“enduring and all-embracing legal peace” in a June 2000 letter to his German counterpart. See June 16, 2000, letter from U.S.
National Security Adviser Samuel Berger to German Foreign Policy and Security Adviser Michael Steiner.
CRS TESTIMONY
Prepared for Congress —————————————————————————————————

Congressional Research Service
6
appears to have effectively impeded subsequent legal challenges or the development of alternatives to
ICHEIC. Most significantly, in 2003, the U.S. Supreme Court struck down legislation in California that
would have imposed additional reporting requirements on European insurers. In American Insurance
Association v. Garamendi,
18 the Court ruled that the California law ran counter to the U.S. commitment to
ICHEIC as enshrined in the executive agreements with European governments.
Key Points of Contention
Despite receiving the support of U.S. Administrations, ICHEIC was broadly criticized, including by
Members of Congress. Critics put forward the following charges: ICHEIC’s administrative and claims
processes suffered from a lack of transparency and oversight; ICHEIC often did not meet its commitment
to apply relaxed standards of proof in assessing claims; and ICHEIC and participating insurance
companies did not make comprehensive policyholder lists available to the public.19 Since ICHEIC’s
closure, critics have emphasized that the roughly $306 million made available to Holocaust survivors and
their heirs falls far short of their estimates of the total value of unpaid Holocaust-era insurance policies,
which range from $17 billion to $200 billion.20 ICHEIC proponents have responded that ICHEIC
administered a claims-based process, giving all claims fair consideration. They argue, for example, that
the total amount ICHEIC paid falling short of some estimates of the value of unpaid policies suggests a
lack of claimants rather than a flawed claims process.
Policy Valuation
A central critique of the ICHEIC process is that it paid out a relatively low proportion of the value of the
insurance assets in question. In the 110th Congress, one House bill on the issue (H.R. 1746, 110th
Congress) would have included a finding that “(12) Experts estimate that the value in 2006 of unpaid life,
annuity, endowment, and dowry insurance theft from European Jewry from the Holocaust and its
aftermath ranges between $17,000,000,000 and $200,000,000,000.”
The estimates referenced, $17 billion to $200 billion, generally came from critics of the ICHEIC process
and advocates for Jewish survivors and their heirs.21 The insurance companies involved have produced
estimates that are significantly less, in the range of $2 billion to $3 billion. ICHEIC itself commissioned a
task force led by Glenn Pomeroy (then insurance commissioner of North Dakota) and Philippe Ferras
(then executive vice-president of AXA Insurance) to assess the value of Holocaust-era insurance
markets.22 The Pomeroy-Ferras Report, as it is usually known, lays out in great detail various facts and
assumptions around the issue of valuation, including ranges of estimates for each country in the home
currency. It does not itself give a current-day number for the value of all unpaid claims, although it would

18 539 U.S. 396 (2003).
19 Eizenstat captures much of the criticism surrounding ICHEIC in his characterization of ICHEIC Chairman Eagleburger’s own
complaints about the ICHEIC process as follows: “there was incessant internal bickering over every issue—how to value policies
from prewar days, which lists of policyholders should be opened, the costs to be borne in processing claims, the ICHEIC claims
process itself. Eagleburger had difficulty getting the companies, particularly Allianz, to fulfill the terms of the MOU ... And
ICHEIC’s administrative failings led to few claims paid and large costs.” Eizenstat, op. cit., p. 267.
20 See, for example, Sidney Zabludoff, “The International Commission of Holocaust-Era Insurance Claims: Excellent Concept
but Inept Implementation,” Jewish Political Studies Review, Spring 2005.
21 The $17 billion figure appears to come from the previously cited work of Mr. Sydney Zabludoff. The $200 billion appears to
come from the work of Professor Joseph Belth in The Insurance Forum, “Life Insurance and the Holocaust,” vol. 25, no 9
(September 1998), p. 81.
22 ICHEIC, Report to Lawrence Eagleburger, Chairman, by the Task Force Co-Chaired by Glenn Pomeroy and Philippe Ferras
on the Estimation of Unpaid Holocaust Era Insurance Claims in Germany, Western and Eastern Europe
, at
http://www.icheic.org/pdf/Pomeroy-Ferras%20Report.pdf.
CRS TESTIMONY
Prepared for Congress —————————————————————————————————

Congressional Research Service
7
be possible to calculate such a value using the ICHEIC valuation calculations applied to individual claims
(these guidelines are discussed below).
Despite the seemingly wide range of estimates—between $2 billion and $200 billion—the basic method
for the competing calculations is largely the same—estimate the total amount of insurance held by Jews in
the relevant parts of Europe prior to World War II, subtract the amounts that have been previously paid on
these policies, and adjust this amount for the intervening decades. Although the figures for total insurance
amounts and the approximate Jewish population are generally accepted, the figures used in most other
steps of the calculation are often disputed. These include the specific propensity for the Jewish population
to purchase insurance and the method used to value assets denominated in historical foreign currencies
from the 1930s in current U.S. dollars. Unfortunately, there is often little objective evidence upon which
to base the choice of what figure to use.
Perhaps the single factor that can have the widest impact on the range of estimates is the method used to
translate the values of insurance policies from the 1930s denominated in European currencies to current-
day U.S. dollars.
 The first part of this question is, what index does one use to adjust for the intervening
decades? The answer to this can change the final value dramatically. At the current day,
using the U.S. Consumer Price Index, $1 in 1938 is equivalent to approximately $18.33;
if that $1 from 1938 had been invested in 10-year U.S. government bonds, it would be
worth approximately $70.09; if it had been invested in the S&P 500, $1 in 1938 would be
worth approximately $5,096. The corresponding figures for Germany, for example, are
much lower, reflecting, of course, the economic damage suffered during the war, among
other factors. One unit of German currency adjusted from 1938 to the current day using
German inflation would be multiplied by approximately 8.3; adjusted using German bond
returns, the figure would be 15.2; and, using German stock returns, it would be 357.5.23
In general, the ICHEIC process used multipliers based on long-term bond rates, although
there were times when the multipliers apparently were arrived at through negotiation
between the parties involved.
 The second part of the question is, when does one choose to exchange the policy value
from the original currency into U.S. dollars? This is particularly important for German
policies since, following World War II, West Germany reformed its currency from
Reichsmarks (RM) to Deutsche Marks (DM). This was done at a rate of 10 RM to 1 DM
for most currency and 5 RM to 1 DM for long-term financial assets. Thus, if one chooses
to change a RM policy into dollars prior to the currency reform, the current-day dollar
value of that policy would be 5 or 10 times greater than if one chooses to change that
policy into dollars after the currency reform. In general, for Germany and Western
Europe, values were kept in original currencies until the current day. For Eastern Europe,
currencies were converted to dollars in the past.
ICHEIC’s method of determining the present-day value of individual policies differed according to the
country of origin and whether the policy specified a particular currency. German policies were paid
according to a formula in a general German postwar restitution law that was then adjusted using German

23 The stock and bond yield calculations assume reinvestment of interest and dividends and do not include the effect of taxes.
Calculations by CRS using data series from http://www.globalfinancialdata.com and https://finance.yahoo.com/. For inflation and
bond yields, the series used for the entire time periods were “United States BLS Consumer Price Index,” “Germany Consumer
Price Index,” “USA 10 year Government Bond Total Return Index ,” and the “Germany 10 year Government Bond Return
Index.” For stock returns, the series used were “S&P 500® Total Return Index” (1938-2008), and “Germany CDAX Total Return
Index” (1938-2008) and “S&P Total Return Index” and “DAX Performance Index” (2008-2019).
CRS TESTIMONY
Prepared for Congress —————————————————————————————————

Congressional Research Service
8
long-term bond rates. ICHEIC offers on German policies were made in euros or converted to dollars at
the then-current exchange rate. Other Western European policies generally were left in the original
currencies and brought forward in time using long-term bond rates in the country of origin, with ICHEIC
offers made in the original currencies. Eastern European policies were first converted into dollars, using
1938 exchange rates that were discounted 30%, and then multiplied by 11.286 to bring the value to the
year 2000.24 After 2000, the values were brought forward to the current day using a rate based on long-
term bond rates. Policies that specified a currency, such as British pounds or Swiss francs, were generally
left in those currencies and then brought to the current day using long-term bond rates. ICHEIC also used
minimum valuation thresholds for each individual policy claimant. If the ICHEIC valuation standards
resulted in a present-day value that was below a certain minimum value, the actual offer given to the
claimant was raised. The minimum values ranged from $500 to $4,000, depending on the country
involved and whether the policy was held by someone who survived the Holocaust.25
Congressional Concerns and Proposed Legislation
Since the late 1990s, Members of Congress have taken a variety of steps seeking to ensure that Holocaust
survivors and their heirs receive fair compensation for unpaid insurance policies. Between 2001 and 2003,
several congressional concerns regarding problems with ICHEIC administration, oversight, and its claims
process were brought to light during a series of hearings before the House Committee on Government
Reform focused specifically on ICHEIC and on proposed legislation intended to create alternative and
more effective means for Holocaust survivors and their heirs to resolve unpaid insurance claims. During
the 2001 hearing, critics expressed dismay that ICHEIC had not launched its claims process until early
2000—1½ years after the MOU was signed—and that a year-long “pilot” claims process resulted in what
some considered remarkably high rejection rates. 26 ICHEIC also was confronted with complaints of high
administrative costs and board secrecy. ICHEIC supporters generally acknowledged that the claims
process got off to a slow and problematic start, but they argue that initial missteps were addressed and that
the claims process was ultimately fair and comprehensive.
In the year following the 2001 congressional hearing, an Executive Monitoring Group appointed by
Chairman Eagleburger to investigate claims handling found widespread mismanagement in insurance
company handling of documented claims. As a result, ICHEIC implemented a system to “verify”
company claims decisions and compelled participating insurance companies to undergo audits of their
claims decisions after 2002.27
In 2003, the Supreme Court’s Garamendi ruling effectively halted initiatives that would have required
European insurers to disclose policyholder records and provided Holocaust survivors and their heirs a
cause of action to pursue claims substantiated by these records. In Garamendi, the Supreme Court cited
an absence of congressional action to counter or amend Administration support of ICHEIC. Specifically,
the failure of numerous legislative proposals aimed at amending Administration policy was considered
evidence that “Congress has done nothing to express disapproval of the President’s policy” and that

24 The 30% discount on the exchange rates and the multiplier value of 11.286 were the result of negotiations by the ICHEIC
participants and apparently included because of the postwar nationalization of Eastern European insurance companies.
25 ICHEIC, “Guide to Valuation Procedures: Edition Dated 22-10-02,” at http://www.icheic.org/pdf/ICHEIC_VG.pdf.
26 U.S. Congress, House Committee on Government Reform, The Status Of Insurance Restitution For Holocaust Victims And
Their Heirs
, 107th Cong., 1st sess., November 8, 2001, Serial No. 107-47.
27 In June 2007, ICHEIC reported having “verified” 30,000 total claims. ICHEIC Final Report, op. cit.
CRS TESTIMONY
Prepared for Congress —————————————————————————————————

Congressional Research Service
9
furthermore, “Given the President’s independent authority ‘in the areas of foreign policy and national
security,... congressional silence is not to be equated with congressional disapproval.’”28
Several bills introduced in Congress since Garamendi would have largely counteracted the ruling,
including altering U.S. policy by requiring European insurers to disclose policyholder lists from the
Holocaust era and by strengthening survivors’ ability to bring cases against European insurers in U.S.
courts.29 None of these bills was enacted, and each was opposed by the George W. Bush and Barack
Obama Administrations, which continued to consider ICHEIC the exclusive vehicle for resolving
Holocaust-era insurance claims.
The most recent legislation, introduced in the House and Senate in the 115th Congress (H.R. 762 and S.
258), would have provided a congressionally sanctioned vehicle for the pursuit of claims by individuals.
The bills would have granted beneficiaries of insurance policies purchased during the period surrounding
World War II in Nazi Germany, or areas controlled by that government, as well as their heirs or successors
in interest, the right to sue in a civil action against insurers and their successors in interest to enforce any
rights under the policy. The legislation essentially would have reversed Garamendi by explicitly stating
that the state laws that create a cause of action related to covered policies against insurance companies
(i.e., the laws at issue in the class action lawsuits, described above) and the state laws that imposed
disclosure requirements on insurance companies relating to covered policies (i.e., the California statute at
issue in Garamendi) should not be preempted by executive agreements or executive foreign policy.
Furthermore, the proposed legislation would have prohibited the use of federal funds to file the statements
of interest that the Department of Justice has filed in the civil suits against insurance companies stating
that it is the policy of the United States to resolve all claims through ICHEIC.
In general, those supportive of proposed legislation on the Holocaust-era insurance issues have argued
that both the ICHEIC process and previous agreements between the United States and European
governments failed to compensate a significant number of Holocaust survivors and their heirs and
beneficiaries. Some of those critical of ICHEIC and supportive of the proposed legislation acknowledge
that the standards of proof placed on a claimant in a U.S. court of law would likely be far more stringent
than those exercised by ICHEIC. However, they argue that in light of ICHEIC’s closure, the courts
represent one of the few, if not the only, remaining avenues by which to pursue claims. Furthermore, a
strong sense of distrust regarding ICHEIC’s application of its relaxed standards of proof, and of insurers’
thoroughness in searching their records, appears to have increased hope that public disclosure of
Holocaust-era records could lead to substantive claims.
Opponents of the proposed legislation often argued that by effectively reversing past commitments made
by the U.S. government—specifically, the granting of legal peace to German companies—the bills could
damage future cooperation with European governments on other Holocaust compensation and restitution
issues. In addition, some U.S. and German government representatives suggest that the credibility of
future U.S. and German commitments to European companies in these areas could be called into question.
Specifically, German government officials indicated that new lawsuits against German companies would

28 In its decision, the Supreme Court highlighted the failure of the following proposed legislation to achieve enactment: H.R.
1210, 108th Congress (2003); S. 972, 108th Congress (2003); H.R. 2693, 107th Congress (2001); H.R. 126, 106th Congress (1999).
539 U.S. at 429, citing, Haig v. Agee, 543 U.S. 280, 291 (1981).
29 See, for example, H.R. 3129, 108th Congress, the Holocaust Victims Insurance Act, introduced by Rep. Adam Schiff on
September 17, 2003; H.R. 1746, 110th Congress, the Holocaust Insurance Accountability Act of 2008, introduced by Rep. Ileana
Ros-Lehtinen on March 28, 2007; H.R. 4596, 111th Congress, the Holocaust Insurance Accountability Act of 2010, introduced by
Rep. Ileana Ros-Lehtinen on February 4, 2010; and S. 4033, 111th Congress, the Restoration of Legal Rights for Claimants under
Holocaust-Era Insurance Policies Act of 2010, introduced by Sen. Arlen Specter on December 15, 2010.
CRS TESTIMONY
Prepared for Congress —————————————————————————————————

Congressional Research Service
10
likely limit their ability to gain future financial commitments from these and other German companies in
Holocaust compensation and restitution cases.30 Critics also argued that given the legal and historical

30 CRS interviews of German foreign ministry officials, Berlin, November 2007.
CRS TESTIMONY
Prepared for Congress —————————————————————————————————

Congressional Research Service
11
complexities of substantiating the existence and value of Holocaust-era insurance policies, it is unlikely
that claims would be satisfactorily settled in U.S. courts. They maintained that it was precisely this fact
that drove U.S. insurance regulators, the Claims Conference, and others to back ICHEIC. In addition,
given the likelihood of legal challenges from European insurers, some question whether claims could ever
be resolved within a reasonable period of time.


Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff
to congressional committees and Members of Congress. It operates solely at the behest of and under the direction of
Congress. Information in a CRS Report should not be relied upon for purposes other than public understanding of
information that has been provided by CRS to Members of Congress in connection with CRS’s institutional role.
CRS Reports, as a work of the United States Government, are not subject to copyright protection in the United
States. Any CRS Report may be reproduced and distributed in its entirety without permission from CRS. However,
as a CRS Report may include copyrighted images or material from a third party, you may need to obtain the
permission of the copyright holder if you wish to copy or otherwise use copyrighted material.

CRS TESTIMONY
Prepared for Congress —————————————————————————————————
TE10038