In 1945, Marta Cornell returned from the Nazi concentration camps with only the rags on her back. The teenager and her grandmother had no place to live. She tried to collect on some of the 10 life insurance policies taken out by her father, who was killed in a concentration camp. She was told she was entitled to nothing.
"I would have settled for peanuts," says Mrs. Cornell, now a resident of Flushing, N.Y.
Instead, Cornell may now be eligible to collect from one of the insurance companies, Assicurazioni Generali, Italy's largest insurance company and the largest seller of life insurance policies in Eastern Europe before World War II.
On Wednesday, Generali agreed to pay $100 million to settle a class-action lawsuit brought on behalf of Holocaust survivors and their heirs. Generali became the first European insurance company to agree to a financial settlement of such Holocaust era claims. In April, the Swiss-based Zurich Insurance Company had agreed to form an independent commission to review and resolve disputed life insurance claims.
Now, negotiators are hoping that 15 other European insurance companies will eventually join Generali in paying out life insurance, dowry insurance, and other claims to victims' families.
The Generali settlement, they hope, will become the model for other insurance companies who may owe hundreds of millions in payments for one of the darkest periods in the 20th century.
"I think that this process today will encourage others and eventually there will be a settlement that involves most if not all of those companies that have been named," says New York's Sen. Alfonse D'Amato (R), who was instrumental in helping the two sides reach agreement. "I think this sets an important precedent."
LAWYERS for the plaintiffs are particularly cheered because Generali has agreed to release documents that may help recover money from the other companies.
For example, Eastern European countries paid Generali about $100 million when they nationalized, or confiscated, its assets. "Nationalization is one of the defenses the companies have been using without any mention that they got money from the governments," says Larry Kill, a partner at Anderson Kill & Olick, one of the plantiffs' law firm.
Generali will also help the lawyers reconstruct where money was deposited and the entities that helped to launder the money. They may become future targets. "It is a gold mine of information to be able to trace very complicated financial transactions," says Mr. Kill.
It's not clear, however, how the other insurance companies will react.
On Wednesday afternoon when the lawyers for Generali entered the federal courtroom in New York where the class-action suit was brought, many of the lawyers representing the other companies hissed to express their displeasure at the settlement.
But they all remain under pressure from the National Association of Insurance Commissioners, which had held hearings around the country on alleged unpaid claims. In addition, they remain defendants in a class-action suit brought on behalf of the victims by Anderson Kill & Olick.
Yesterday, the lawyers for the victims planned to expand their reach, filing a class-action lawsuit against a Ridgefield Park, N.J., company, DeGussa, which smelts precious metals. According to Edward Fagan, a lawyer for the plaintiffs, the company was involved in smelting gold pulled from concentration camp victims' teeth. Dennis Taylor, a lawyer for the company, did not return phone calls.
Settling the insurance claims is a high priority. Many of the victims are elderly. Long delays make it more difficult for them to share in the settlements. For this reason, Generali will pay $10 million immediately into a fund for the elderly and impoverished.
Cornell says she can use the money. But, she says, "If I cannot use it, I will give it to somebody who doesn't have [any]."