[DOCID: f:hr820p1.110]
From the House Reports Online via GPO Access
[wais.access.gpo.gov]
110th Congress Rept. 110-820
HOUSE OF REPRESENTATIVES
2d Session Part 1
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HOLOCAUST INSURANCE ACCOUNTABILITY ACT OF 2008
_______
August 1, 2008.--Ordered to be printed
_______
Mr. Frank of Massachusetts, from the Committee on Financial Services,
submitted the following
R E P O R T
together with
ADDITIONAL VIEWS
[To accompany H.R. 1746]
[Including cost estimate of the Congressional Budget Office]
The Committee on Financial Services, to whom was referred the
bill (H.R. 1746) to require disclosure of Holocaust-era
policies by insurers and establish a federal cause of action
for claims arising out of a covered policy, having considered
the same, report favorably thereon with amendments and
recommend that the bill as amended do pass.
CONTENTS
Page
Amendment........................................................ 2
Purpose and Summary.............................................. 5
Background and Need for Legislation.............................. 5
Hearings......................................................... 9
Committee Consideration.......................................... 9
Committee Votes.................................................. 9
Committee Oversight Findings..................................... 10
Performance Goals and Objectives................................. 10
New Budget Authority, Entitlement Authority, and Tax Expenditures 10
Committee Cost Estimate.......................................... 10
Congressional Budget Office Estimate............................. 10
Federal Mandates Statement....................................... 12
Advisory Committee Statement..................................... 12
Constitutional Authority Statement............................... 12
Applicability to Legislative Branch.............................. 12
Earmark Identification........................................... 12
Section-by-Section Analysis of the Legislation................... 12
Additional Views................................................. 15
Amendment
The amendments are as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Holocaust Insurance Accountability Act
of 2008''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) The Holocaust was one of the most heinous crimes in
history, causing the suffering of millions of people through
torture and other violence, including the murder of 6,000,000
Jews and millions of others, the destruction of families and
communities, and the theft of their assets.
(2) After World War II, many Holocaust survivors and heirs of
Holocaust victims presenting claims to insurance companies
lacked policy information and vital records needed to satisfy
the burden of proof required to bring an insurance claim
because such documentation was confiscated by the Nazis or lost
in the devastation of World War II.
(3) Following the end of the Cold War, efforts to address
open issues concerning restitution and compensation to the
victims of Nazi persecution were renewed. International talks
involving the United States, Germany, Austria, France, Israel,
and other nations occurred and agreements were reached to
enable restitution for a variety of claims, including claims
based on Holocaust-era insurance policies.
(4) In response to the unique difficulties faced by those
seeking to bring claims based on Holocaust-era insurance
policies, Insurance Commissioners of the several States, the
National Association of Insurance Commissioners (NAIC), major
Jewish organizations and various European insurance companies
established the International Commission on Holocaust Era
Insurance Claims to provide a forum in which claimants could
bring claims based on Holocaust-era insurance policies.
(5) In recognition of the preeminence of the States in
protecting consumers in the insurance marketplace, Congress and
the executive branch have a limited role in facilitating and
assisting the Holocaust-era insurance restitution efforts of
the several States as embodied principally in the ICHEIC
process.
(6) After ICHEIC and its partner entities paid approximately
$300 million to more than 47,000 claimants and approximately
$200 million to Holocaust-related humanitarian organizations,
ICHEIC formally concluded its operation in March 2007.
(7) Experts agree that, by the conclusion of the ICHEIC
process, claims based on a substantial portion of Holocaust-era
insurance policies issued to Holocaust victims in Western
Europe had been addressed.
(8) Due to the political and economic conditions in Eastern
Europe until the end of the Cold War, compensation efforts
there have been more limited. The ICHEIC process did provide
compensation for policies issued by the Eastern European
branches and subsidiaries of Western European companies as well
as for policies issued by nationalized or liquidated Eastern
European insurers, drawing from ICHEIC's humanitarian funds.
However, the Eastern European companies and countries did not
participate in ICHEIC or any of the related compensation
processes. Now that the nations of Eastern Europe have joined
the community of free and modern nations, it is imperative that
the nations of Eastern Europe proactively seek to identify and
provide restitution for Holocaust-era insurance policies issued
within their borders.
(9) All insurers that participated in ICHEIC are now willing
to address all inquiries made by Holocaust victims and victims'
heirs, check their archives, and settle legitimate claims based
on relaxed standards of proof. To facilitate the ongoing
monitoring of claims based on Holocaust-era insurance policies,
the Insurance Commissioners of the several States have agreed
to coordinate their Holocaust-era insurance restitution efforts
through the NAIC and the Holocaust Claims Processing Office.
Similarly, entities that worked in partnership with ICHEIC have
agreed to maintain their claims processing facilities and
cooperate with the HCPO in the resolution of Holocaust-era
insurance claims.
(10) It has been the policy of the executive branch to
support the resolution of Holocaust-era insurance claims
through an alternative to litigation. To that end, the
executive branch has filed statements of interest in court
seeking the dismissal of cases involving claims for non-payment
of Holocaust-era insurance policies where there have been
independent legal grounds to support such dismissal.
(11) This Act does not endorse any State law cause of action
and does not alter any applicable law, legal precedent or
principle in effect at the time of its enactment that may be
applicable to the resolution of Holocaust-era insurance claims.
Nor does this Act alter the binding effect of any class action
settlement involving Holocaust-era insurance claims.
SEC. 3. INSURER RESPONSE TO INQUIRIES ABOUT COVERED POLICIES.
(a) Requirement.--
(1) In general.--Subject to paragraph (2), an insurer
receiving a written inquiry from an eligible person regarding a
covered policy for which the person may be a beneficiary
shall--
(A) not later than 90 days after such insurer
receives such written inquiry, acknowledge the inquiry
in writing and indicate whether such insurer is in
possession of information specifically relating to such
covered policy;
(B) within a reasonable period of time, provide to
such eligible person all information in the possession
of such insurer regarding whether such person is a
potential beneficiary of such policy; and
(C) immediately notify the Holocaust Claims
Processing Office in writing of the inquiry and provide
a copy of all acknowledgments and information provided
to such eligible person under subparagraph (A) or (B)
to the HCPO.
(2) Termination of requirement.--An insurer receiving a
written inquiry under paragraph (1) is not required to comply
with the requirements of such paragraph for any written inquiry
received on or after the date that is 10 years after the date
of the enactment of this Act.
(b) Agreements With European Countries.--
(1) Agreements.--The Secretary of State shall seek to enter
into an agreement with each European country with which no
appropriate agreement exists to facilitate the response
requirements of subsection (a).
(2) Report.--Not later than 180 days after the date of the
enactment of this Act, and annually thereafter, the Secretary
of State shall submit to Congress a report on efforts to carry
out this subsection.
SEC. 4. MONITORING BY THE HOLOCAUST CLAIMS PROCESSING OFFICE.
The Secretary of the Treasury is authorized and encouraged to enter
into an agreement with the Holocaust Claims Processing Office to
provide for--
(1) the HCPO to monitor compliance with the requirements of
section 3(a);
(2) the HCPO to notify the Secretary of the Treasury of the
identity of any insurer that the HCPO is aware of that is not
in compliance with the requirements of section 3(a) not later
than 30 days after the failure of such insurer to comply with
such requirements;
(3) the HCPO to annually notify the Committee on Financial
Services of the House of Representatives, the Committee on
Banking, Housing, and Urban Affairs of the Senate, the
Secretary of the Treasury, and the Secretary of State of the
identity of each insurer that fails to comply with the
requirements of section 3(a);
(4) subject to appropriations, the transfer to the HCPO of
amounts equal to the amounts received by the Government under
section 5 for use in carrying out paragraphs (1) and (2); and
(5) the issuance of such guidelines and regulations as are
necessary to carry out this section and sections 3 and 5(a).
SEC. 5. PENALTY.
(a) In General.--The Secretary of the Treasury shall assess a civil
penalty of not less than $5,000 for each day that an insurer fails to
comply with the requirements of section 3(a) for an inquiry referred to
in such section, as determined by the Secretary after consideration of
information provided by the Holocaust Claims Processing Office. Each
failure to comply with the requirements of section 3(a) for an inquiry
under such section shall be considered a separate offense.
(b) Alternative Assessment.--If an insurer based outside of the
United States is assessed a penalty under subsection (a) and refuses to
pay such penalty and the Secretary is unable to collect such penalty
from such insurer, the Secretary may seek to attach a lien on any
payment (including the remittance of a dividend or management fee) to
such insurer from a subsidiary of such insurer that is domiciled in the
United States if--
(1)(A) such insurer owns substantially all of the voting
shares of such subsidiary; or
(B) there is substantial overlap of membership of the board
of directors and executive officers of such insurer and such
subsidiary;
(2) the Secretary notifies such insurer, such subsidiary, and
the appropriate State regulator of such subsidiary of the
intent of the Secretary to attach a lien to such remittance;
and
(3) the Secretary provides such insurer and such subsidiary a
reasonable opportunity to contest the attachment of the lien.
(c) Regulations.--The Secretary shall issue regulations to carry out
subsection (b).
SEC. 6. FEDERAL CAUSES OF ACTION.
(a) Federal Cause of Action.--
(1) In general.--There shall exist a Federal cause of action
for any claim arising out of or related to a covered policy
against any insurer.
(2) Standing.--A claim under paragraph (1) may be brought by
an eligible person.
(3) Statute of limitations.--Any action brought under this
Act shall be filed not later than 10 years after the effective
date of this Act.
(b) Right to Opt Out of Class Action Proceedings.--
(1) Sense of congress.--It is the sense of Congress that
claimants have the right to opt out of new or ongoing class
action proceedings relating to claims based on Holocaust-era
insurance policies in accordance with Rule 23 of the Federal
Rules of Civil Procedure.
(2) Clarification.--Nothing in this Act shall be construed to
affect any class action settlement agreement, or releases given
therein, made before the date of the enactment of this Act.
SEC. 7. LIMITATION ON FEDERAL CAUSE OF ACTION AND REQUIREMENT TO
RESPOND TO INQUIRY.
(a) In General.--No cause of action shall exist for a claim against
an insurer relating to, and an insurer is not required to comply with
the requirements of section 3(a) for a written inquiry regarding, a
covered policy for which--
(1) payment has been made or release has been granted;
(2) payment has been received or denied under the process of
the International Commission on Holocaust Era Insurance Claims,
any similar process that was conducted in partnership with
ICHEIC, any government sponsored Holocaust claims process, the
Holocaust Claims Processing Office, or any process for the
resolution of Holocaust-era insurance claims established
pursuant to a class action settlement; or
(3) the claimant previously filed an action against such
insurer.
(b) Clarification of Applicability.--Subsection (a) shall not apply
to a claim for which a humanitarian payment has been received from
ICHEIC and that is being asserted--
(1) against an insurer that did not participate in ICHEIC; or
(2) based on information not reasonably available before the
conclusion of the ICHEIC process.
SEC. 8. EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT.
(a) In General.--The Secretary of the Treasury shall instruct the
United States Executive Director at the European Bank for
Reconstruction and Development to use the voice and vote of the United
States to create and advocate the policies of the Bank to encourage
Eastern European countries to engage in and pursue restitution programs
in compliance with this Act.
(b) Report.--Not later than one year after the date of the enactment
of this Act, and three years thereafter, the Secretary of the Treasury
shall submit to Congress a report on the progress of carrying out
subsection (a).
SEC. 9. DEFINITIONS.
In this Act:
(1) Commissioner of insurance.--The term ``commissioner of
insurance'' means the highest ranking officer of a State
responsible for regulating insurance.
(2) Covered policy.--The term ``covered policy'' means any
insurance policy that was--
(A) in effect at any time after January 30, 1933, and
before December 31, 1945; and
(B) issued to a policyholder or named a beneficiary
who was deprived of their life, suffered damage to
their mental or physical health, suffered loss or
deprivation of financial or other assets, or suffered
any other loss or damage to their property as a result
of racial, religious, political, or ideological
persecution by organs of the National Socialist
Government of Germany or by other Governmental
authorities or entities controlled by such Governmental
authorities in the territories occupied by the National
Socialist Government of Germany or its European allies
during the period described in subparagraph (A).
(3) Eligible person.--The term ``eligible person'' means a
person who purchased a covered policy, a beneficiary of such
person with respect to such policy, an heir of such person or
such beneficiary with respect to such policy, or an assignee of
such person, such beneficiary, or such heir with respect to
such policy.
(4) Holocaust claims processing office; hcpo.--The terms
``Holocaust Claims Processing Office'' and ``HCPO'' mean the
Holocaust Claims Processing Office of the New York State
Banking Department.
(5) International commission on holocaust era insurance
claims; icheic.--The terms ``International Commission on
Holocaust Era Insurance Claims'' and ``ICHEIC'' mean the
International Commission on Holocaust Era Insurance Claims
established through the memorandum of understanding and
bilateral or multilateral agreements between the Commission,
relevant foreign governments, and the following insurers and
their successors in interest:
(A) The Dutch Association of Insurers and the members
of the Association.
(B) AXA SA together with its subsidiaries (the AXA
Group).
(C) Assicurazioni Generali S.P.A.
(D) Zurich Life Insurance Company and its affiliates.
(E) Allianz SE.
(F) Winterthur Swiss Insurance Company together with
its subsidiaries (the Winterthur Group).
(G) All insurers participating in the process of the
Commission through bilateral or multilateral
agreements.
(6) Insurer.--The term ``insurer'' means any person engaged
in the business of insurance in interstate or foreign commerce,
if the person issued a covered policy, or a successor in
interest to such person.
Amend the title so as to read:
A bill to further facilitate payment of Holocaust-era
insurance claims.
PURPOSE AND SUMMARY
H.R. 1746, the Holocaust Insurance Accountability Act of
2008, is intended to build on prior Holocaust-era insurance
restitution efforts and further facilitate payment of
Holocaust-era insurance claims not previously addressed by the
courts or by other Holocaust restitution programs. H.R. 1746
requires that insurance companies respond within 90 days to any
new inquiry received from any potential beneficiary of any
Holocaust-era insurance policy. Compliance with this reporting
requirement will be monitored by the New York State Holocaust
Claims Processing Office (HCPO) and enforced through civil
penalties assessed by the Secretary of the Treasury acting on
information provided by the HCPO. H.R. 1746 also creates a
Federal cause of action for claimants who have not previously
brought a claim in court, or filed claims through the
International Commission on Holocaust Era Insurance Claims
(ICHEIC), or through another Holocaust restitution program.
Finally, the bill requires the U.S. representative to the
European Bank for Reconstruction and Development to encourage
Eastern European countries to participate in the Holocaust-era
insurance restitution programs.
BACKGROUND AND NEED FOR LEGISLATION
Following the Second World War many Western European
countries passed laws and created programs to provide
restitution for property confiscated from victims of the
Holocaust. While unpaid or confiscated insurance policies were
included in these post-war restitution efforts, the difficulty
of accessing records and in some instances, the destruction of
these records as a result of war, made it difficult for
Holocaust victims and their heirs to file claims without highly
specific information regarding the policy. Moreover, the
country where the policy was purchased also created an often
insurmountable barrier for those wishing to file claims.
Countries like Poland, Hungary and Czechoslovakia, which became
part of the Soviet Bloc after 1945 nationalized and liquidated
private insurance companies and imposed restrictions on who
could receive payments on policies. Although some of the West
European companies that operated in Central and Eastern
European markets still exist today, many of the companies that
sold insurance in these countries have no present-day
successors.
Despite these difficulties, during the 1990s, Jewish
organizations, Holocaust survivors, and the U.S. and Israeli
governments renewed their efforts to obtain compensation for
survivors who had not participated in previous post-war
restitution programs. In 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, including unpaid
insurance policies. The Clinton Administration took the lead in
facilitating broad compensation agreements with the governments
of Germany, Austria, and France. Although efforts focused
largely on property restitution and compensating victims of
forced and slave labor, each of these agreements also had an
insurance-related component.
Concurrent with these intergovernmental negotiations, and
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. In August 1998
the NAIC, several European insurers, the Conference of Jewish
Material Claims against Germany (Claims Conference), the World
Jewish Restitution Organization (WJRO), and the State of Israel
signed a Memorandum of Understanding (MOU) establishing the
International Commission on Holocaust Era Insurance Claims
(ICHEIC). The MOU tasked ICHEIC with identifying relevant
Holocaust-era insurance policies issued between 1920 and 1945,
reaching out to potential claimants and encouraging them to
participate in the ICHEIC process, and assisting Holocaust
victims and their heirs in resolving claims. Members of
ICHEIC--chaired by former U.S. Secretary of State Lawrence
Eagleburger--agreed that ICHEIC's claims process would adhere
to the following principles: (i) Claimants would not be charged
to file a claim and no ICHEIC funds were used to pay attorneys'
fees; (ii) 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
(iii) ICHEIC and participating insurance companies would
conduct archival research in order to establish a database of
potential policyholders against which to match submitted
claims.
Before embarking on its tasks, ICHEIC commissioned a report
to estimate the volume and value of Holocaust-era policies that
remained unpaid at the end of the 20th century. Prepared under
the supervision of then-North Dakota Insurance Commissioner
Glenn Pomeroy and European insurance expert, Philippe Ferras,
the Pomeroy-Ferras Report remains the only widely accepted
source of baseline data relevant to Holocaust-era insurance
restitution.\1\ Based on information contained in the Pomeroy-
Ferras Report and other sources, experts supportive of H.R.
1746 estimate the largest possible universe of policies
relevant to Holocaust-era insurance restitution to be
approximately 800,000 policies.\2\ Acknowledging the
significantly more developed insurance marketplace that existed
in pre-war Western Europe, the Pomeroy-Ferras Report further
determined that 80 percent of policies relevant to Holocaust-
era insurance restitution had been issued to policyholders in
Western Europe. Given the successful restitution programs that
existed in post-war Western Europe, the Pomeroy-Ferras Report
was able to conclude that approximately 70 percent of policies
relevant to Holocaust-era insurance restitution issued in
Western Europe had been addressed before the creation of
ICHEIC. In contrast, Pomeroy-Ferras also determined that, of
the 20 percent of policies relevant to Holocaust-era insurance
restitution that were issued in Eastern Europe, only 10 percent
of policies had been addressed before the creation of ICHEIC.
Therefore, while the Pomeroy-Ferras Report represented the
beginning point for the ICHEIC process, it made clear that
ICHEIC and subsequent Holocaust-era insurance restitution
efforts would be wrapping up Holocaust-era insurance
restitution in Western Europe but only beginning Holocaust-era
insurance restitution in Eastern Europe.
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\1\The Pomeroy-Ferras Report is available online at: http://
www.icheic.org/pdf/Pomeroy-Ferras%20Report.pdf.
\2\See, Sidney Zabludoff, ``The International Commission of [sic.]
Holocaust-Era Insurance Claims: Excellent Concept but Inept
Implementation,'' Jewish Political Studies Review, Spring 2005.
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ICHEIC received approximately $550 million from
participating insurers. Of this, $350 million was secured from
German companies through a 2000 executive agreement between the
United States and Germany. A further $100 million came from the
Italian insurer Assicurazioni Generali, S.p.A., and the
remaining $100 million was contributed by the various
individual insurance companies and national insurance
associations that participated in the ICHEIC process. In
addition to five insurers on ICHEIC's board, ICHEIC secured the
participation of more than 75 other companies through bilateral
agreements with the German, Dutch, Austrian, and Belgian
insurance associations.
It is important to note that participation of the German
insurance association, and indeed the participation of all the
insurers that participated in ICHEIC as well as the Austrian
General Settlement Fund, was conditioned on explicit or tacit
assurances of ``legal peace'' provided by the Clinton
Administration and maintained by the Bush Administration. Under
these assurances of ``legal peace,'' the Clinton and Bush
administrations have agreed to intervene on behalf of ICHEIC
participants that are sued in U.S. courts. This cooperation,
which is ongoing, was a key feature of the ICHEIC process and
fundamental to its success in resolving claims, according to
the testimony of former Deputy Treasury Secretary Eizenstat who
served as chief negotiator for Holocaust matters for the
Clinton Administration.\3\
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\3\See, testimony of Stuart Eizenstat before the House Committee on
Financial Services, during a hearing entitled ``The Holocaust Insurance
Accountability Act of 2007 (H.R. 1746): Holocaust Era Insurance
Restitution After ICHEIC, The International Commission on Holocaust Era
Insurance Claims,'' February 7, 2008. Pp. 31-32.
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ICHEIC's claims process opened in early 2000 and closed in
March 2007. In total, ICHEIC facilitated the payment of
approximately $300 million to approximately 48,000 claimants.
While some 43,000 claims received no payment from ICHEIC, those
claims were often determined to have been honored under
previous compensation agreements, or were determined to fall
short of the relaxed standards of proof established by ICHEIC.
In addition to the funds paid to individual claimants, ICHEIC
paid approximately $200 million to a ``humanitarian fund''
overseen by the Claims Conference. Prior to ICHEIC's closure,
its participating insurance companies, including members of the
German and Dutch insurance associations, agreed that they will
continue to accept and honor claims based on ICHEIC's relaxed
standards of proof.
For almost a decade Congress has been actively aware of the
issues surrounding Holocaust-era insurance restitution. In
February 2000, the Financial Services Committee addressed the
topic in a hearing entitled ``Restitution of Holocaust
Assets.'' Likewise, hearings before the House Committee on
Government Reform between 2001 and 2003 highlighted the ICHEIC
process. Also, legislation proposed in the 107th, 108th, and
109th Congresses mirrors some provisions of H.R. 1746, as
introduced. Opposed by successive U.S. Administrations, the
House declined to act on legislation relating to Holocaust-era
insurance restitution while the ICHEIC process remained
actively underway. Congress's authority to act in the field of
Holocaust-era insurance restitution and its failure to do so
previously were noted by the Supreme Court when it upheld
ICHEIC as the then-exclusive national approach to Holocaust-era
insurance restitution in American Ins. Assn. v. Garamendi, 539
U.S. 396 (2003), at 429.
When ICHEIC concluded its period of active operation in
March 2007, Congress again turned its attention to the issue of
Holocaust-era insurance restitution. Seeking both to endorse
the successes of prior Holocaust-era insurance restitution
efforts and to correct their shortcomings where deemed
necessary, three areas emerged where Congress could facilitate
the resolution of previously unresolved Holocaust-era insurance
claims. The first of these areas of concern relates to the
accessibility of information regarding Holocaust-era insurance
policies. ICHEIC published more than 500,000 names of potential
Holocaust-era policyholders on their website. Recognizing that
this was a comprehensive, but not complete, effort, H.R. 1746
creates the first ever Federal mandate requiring insurers to
respond to requests for information regarding Holocaust-era
insurance policies.
Second, H.R. 1746 provides a right of access to the Federal
courts to individuals with previously unaddressed Holocaust-era
insurance claims. The Federal cause of action created in H.R.
1746 applies only prospectively and thereby expressly protects
the finality of claims addressed by previous judicial
decisions, settlements, and Holocaust restitution efforts.
However, the creation of the Federal cause of action also
expressly allows access to U.S. Courts for Holocaust-era
insurance claims not filed prior to the bill's enactment.
Finally, through H.R. 1746 Congress both takes note of and
seeks to begin to address the broader issue of the restitution
of Holocaust-era assets in Eastern Europe.
HEARINGS
On February 7, 2008, the House Committee on Financial
Services held a hearing entitled, ``The Holocaust Insurance
Accountability Act of 2007 (H.R. 1746): Holocaust Era Insurance
Restitution After ICHEIC, the International Commission on
Holocaust Era Insurance Claims.'' The following witnesses
testified:
Witness List:
Panel One
<bullet> Ambassador J. Christian Kennedy,
Special Envoy for Holocaust Issues, U.S.
Department of State
<bullet> Dr. Michael Kurtz, Assistant
Archivist for Records Services, National
Archives and Records Administration
Panel Two
<bullet> Mr. Stuart Eizenstat, Former Special
Representative of the President & Secretary of
State on Holocaust-Era Issues
<bullet> Mr. Sam Dubbin, Esq., Attorney,
Miami, Florida
<bullet> Ms. Diane Koken, Former Vice-
Chairman, ICHEIC; Former Pennsylvania Insurance
Commissioner
<bullet> Mr. Sidney Zabludoff, Former
Consultant, Conference on Jewish Material
Claims Against Germany, Inc.
<bullet> Mr. Roman Kent, Chairman, American
Gathering of Jewish Holocaust Survivors
<bullet> Mr. Israel Arbeiter, President,
American Association of Jewish Holocaust
Survivors of Greater Boston
COMMITTEE CONSIDERATION
The Committee on Financial Services met in open session on
June 25, 2008, and ordered reported H.R. 1746, Holocaust
Insurance Accountability Act of 2007, as amended, to the House
with a favorable recommendation by a voice vote.
COMMITTEE VOTES
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto. No
record votes were taken in conjunction with the consideration
of this legislation. A motion by Mr. Frank to report the bill,
as amended, to the House with a favorable recommendation was
agreed to by a voice vote. During the consideration of the
bill, the following amendments were considered:
An amendment in the nature of a substitute, by Mr. Frank,
No. 1, was agreed to, as amended, by voice vote.
An amendment to the amendment in the nature of a substitute
by Mr. Sherman, No. 1a, regarding domestic subsidiaries, was
agreed to, as modified, by voice vote.
An amendment en bloc to the amendment in the nature of a
substitute by Mr. Sherman, No. 1b, regarding Holocaust
insurance registry and civil penalties, was not agreed to by
voice vote.
COMMITTEE OVERSIGHT FINDINGS
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the Committee held a hearing and made
findings that are reflected in this report.
PERFORMANCE GOALS AND OBJECTIVES
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the Committee establishes the
following performance related goals and objectives for this
legislation:
H.R. 1746 is intended to build on prior Holocaust-era
insurance restitution efforts and further facilitate payment of
Holocaust-era insurance claims not previously addressed by the
courts or by other Holocaust restitution programs.
NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX EXPENDITURES
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee adopts as its
own the estimate of new budget authority, entitlement
authority, or tax expenditures or revenues contained in the
cost estimate prepared by the Director of the Congressional
Budget Office pursuant to section 402 of the Congressional
Budget Act of 1974.
COMMITTEE COST ESTIMATE
The Committee adopts as its own the cost estimate prepared
by the Director of the Congressional Budget Office pursuant to
section 402 of the Congressional Budget Act of 1974.
CONGRESSIONAL BUDGET OFFICE ESTIMATE
Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
provided by the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974:
July 29, 2008.
Hon. Barney Frank,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 1746, the
Holocaust Insurance Accountability Act of 2008.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Matthew
Pickford.
Sincerely,
Peter R. Orszag.
Enclosure.
H.R. 1746--Holocaust Insurance Accountability Act of 2008
H.R. 1746 would require insurance companies to respond to
inquiries about the existence of Holocaust-era insurance
policies. The legislation would require the Department of the
Treasury to enter into an agreement with the New York State
Holocaust Claims Processing Office (HCPO) to monitor company
responses and report to the Treasury and the Congress on
compliance with the proposed federal requirement. Failure to
comply with individual inquiries would subject insurers to
civil penalties. In addition, the legislation would require the
Departments of State and the Treasury to seek agreements with
European countries to facilitate responses from insurers in
Europe. Based on information from the Departments of State and
the Treasury, CBO estimates that implementing H.R. 1746 would
cost about $500,000 annually, assuming appropriation of the
necessary amounts.
Enacting H.R. 1746 could affect federal revenues because
the bill would impose new civil penalties on insurance
companies if they fail to respond to inquiries. Collections of
civil penalties are recorded in the budget as revenues. Subject
to appropriation, those penalties could be spent by HCPO. CBO
expects that any additional revenues would not be significant
because of the small number of fines likely to be collected.
H.R. 1746 would impose private-sector mandates, as defined
in the Unfunded Mandates Reform Act (UMRA), on certain
insurers. The bill would require an insurer, after receiving a
written inquiry from a potential beneficiary of such a policy,
to: Acknowledge that inquiry in writing, indicating whether the
insurer has information specifically related to a covered
policy as defined in the bill; provide to each person making
such an inquiry any information regarding whether that person
is a potential beneficiary; and immediately notify the
Holocaust Claims Processing Office in writing of each inquiry
and provide a copy of all acknowledgments and information to
persons making such inquiries. Based on information from the
insurance industry, CBO expects that the cost to U.S. firms of
complying with the mandates would fall below the annual
threshold for private-sector mandates ($136 million in 2008,
adjusted annually for inflation).
H.R. 1746 contains no intergovernmental mandates as defined
in UMRA and would not affect the budgets of state, local, or
tribal governments.
On February 6, 2008, CBO transmitted a cost estimate for
H.R. 1746 as ordered reported by the House Committee on Foreign
Affairs on October 23, 2007. Both bills address Holocaust-era
insurance policies but have different provisions. The version
of H.R. 1746 reported by the House Committee on Foreign Affairs
would create a Holocaust Insurance Registry through the
National Archives and Records Administration, while the version
reported by the House Committee on Financial Services would
require insurance companies to respond to individual inquiries
about Holocaust-era insurance policies. CBO's cost estimates
reflect those differences. H.R. 1746 as ordered reported by the
House Committee on Foreign Affairs contains a private-sector
mandate in that it would require insurers to electronically
file certain information about Holocaust-era policies with the
Secretary of Commerce. CBO determined that the cost of
complying with that mandate would fall below the UMRA's annual
threshold.
The CBO staff contacts for this estimate are Matthew
Pickford (for federal costs) and Paige Piper/Bach (for the
private-sector impact). This estimate was approved by Theresa
Gullo, Deputy Assistant Director for Budget Analysis.
FEDERAL MANDATES STATEMENT
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.
ADVISORY COMMITTEE STATEMENT
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
CONSTITUTIONAL AUTHORITY STATEMENT
Pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee finds that the
Constitutional Authority of Congress to enact this legislation
is provided by Article 1, section 8, clause 1 (relating to the
general welfare of the United States) and clause 3 (relating to
the power to regulate interstate commerce).
APPLICABILITY TO LEGISLATIVE BRANCH
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
EARMARK IDENTIFICATION
H.R. 1746 does not contain any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9 of rule XXI.
SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION
Section 1. Short title
This section designates the short title of the bill as the
``Holocaust Insurance Accountability Act of 2008.''
Section 2. Findings
Section 2 sets out a brief history of Holocaust-era
insurance restitution, provides findings for this legislation
and clarifies Congress's intent that this legislation apply
prospectively while leaving intact judicial decisions,
settlements and Holocaust restitution efforts.
Section 3. Insurer response to inquiries about covered policies
Section 3 requires insurers to respond to requests for
information regarding Holocaust-era insurance policies within
90 days of receiving the request and to indicate whether the
insurer has information regarding the request. Section 3 also
requires insurers to notify the New York State Holocaust Claims
Processing Office of all inquires made under this section. This
requirement expires 10 years after enactment. Section 3 also
requires the Secretary of State to seek to enter into
agreements with certain European countries to facilitate
requests under this section.
Section 4. Monitoring by the Holocaust Claims Processing Office
Recognizing the ongoing importance of the States in
consumer protection in the insurance marketplace, H.R. 1746's
reporting requirement is monitored by the States, acting
through the New York State Holocaust Claims Processing Office.
Section 4 provides that the Holocaust Claims Processing Office
will monitor the provision of information required under
Section 3 and periodically inform the Congress, the Secretary
of State and the Secretary of the Treasury of insurers who have
failed to comply with Section 3.
Section 5. Penalty
Section 5 provides that there will be a $5,000 per day
penalty for any insurer who fails to comply with Section 3.
Each failure to comply with Section 3 shall be considered a
separate offense. Enforcement of the Section 3 reporting
requirement is the responsibility of the Secretary of the
Treasury. To prevent foreign insurers who have assets in the
U.S. from ignoring the reporting requirement, Section 5 permits
the Secretary to collect unpaid civil penalties assessed under
this section by placing liens on transfers to a non-compliant
foreign insurer from its U.S. subsidiaries.
Section 6. Federal cause of action
Section 6 creates a Federal cause of action with a ten-year
statute of limitations for any claim arising out of a
Holocaust-era insurance policy. In addition, Section 6
expresses the sense of Congress that claimants maintain the
right to opt out of relevant new class action proceedings.
Section 7. Limitations on the cause of action
Section 7 provides that the cause of action will not apply
to covered insurance policies for which the claimant has
previously filed a claim in court, with ICHEIC or with any of
ICHEIC's partner entities, or for which a payment has been made
or release has been granted. Claimants who received certain
humanitarian payments under ICHEIC may bring an action against
any non-ICHEIC company. In addition, claimants who have not
submitted a claim to ICHEIC or a similar entity that worked
with ICHEIC, may bring an action against any ICHEIC
participating company or non-ICHEIC company.
Section 8. European Bank for Reconstruction and Development
Section 8 requires that the European Bank for
Reconstruction and Development encourage Eastern European
countries to engage in and pursue Holocaust-era insurance
restitution programs in compliance with this Act.
Section 9. Definitions
Section 9 defines the following terms:
(1) Commissioner of insurance.
(2) Covered policy.--Any insurance policy that was in
effect between January 30, 1933 and December 31, 1945
and was issued to a Holocaust victim or survivor.
(3) Eligible person.--A person who purchased a
covered policy, a beneficiary, an heir, or an assignee
of such person.
(4) Holocaust claims processing office; hcpo.
(5) International commission on holocaust era
insurance claims; icheic.--The Commission established
through the memorandum of understanding and bilateral
or multilateral agreements between the Commission,
relevant foreign governments, and the following
insurers and their successors in interest:
(A) The Dutch Association of Insurers and its
members.
(B) The AXA Group.
(C) Generali.
(D) Zurich.
(E) Allianz.
(F) Winterthur.
(G) All insurers participating in the process
of the Commission through bilateral or
multilateral agreements.
(6) Insurer.--Any person engaged in the business of
insurance in interstate or foreign commerce, if the
person issued a covered policy, or a successor in
interest to such person.
ADDITIONAL VIEWS
H.R. 1746 reflects another difficult chapter in the tragic
and disturbing history of the Holocaust, which lingers on in
our collective conscience to this day.
There is broad agreement among all parties involved that we
must encourage the fair and just resolution of all insurance
claims that remain unsettled from the Holocaust era to the
maximum extent possible, even with the long-standing problem of
having such little evidence and documentation so many years
after the fact.
While we were able to work toward a greater consensus on
many features of H.R. 1746, we remain concerned by the
provisions in Section 6 and Section 7 that create a new Federal
cause of action with a ten-year statute of limitations. These
unwarranted provisions open the door for new lawsuits against
companies that cooperated in the International Commission on
Holocaust Era Insurance Claims (ICHEIC) process, or a similar
claims resolution process, and are now cooperating through the
New York State Holocaust Claims Processing Office (HCPO)
process.
We are concerned that these provisions could turn a
cooperative process into a confrontational one in which false
hopes might be raised and lengthy litigation efforts could
delay resolution and waste precious resources.
The companies that participated in the ICHEIC process--
which was sanctioned by state insurance regulators, the World
Jewish Congress, and the governments of Israel and the United
States--and that are continuing to cooperate through the HCPO
process, should not be subject to lawsuits by new claimants
unless they fail to cooperate.
We commend the chief proponent of this legislation,
Representative Ros-Lehtinen of Florida, on her determination to
highlight the issue of outstanding insurance claims and to
encourage the full and fair restitution of Holocaust survivors
and their families.
We also thank the Chairman of the Committee on Financial
Services for his diligence in working with all interested
parties to forge a greater consensus on an important and
sensitive issue.
Spencer Bachus.
Ron Paul.
Shelley Moore Capito.
Christopher Shays.
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