Moved by emotional stories of destitute Holocaust victims, state insurance companies five years ago pressured giant European insurance companies to divulge information about their Holocaust-era policies.
Unless the companies revealed the names of all people insured between 1920 and 1945, they would lose their licenses to sell insurance in such states as California, Florida, and New York.
Monday, by a 5-to-4 vote, the United States Supreme Court overturned California's law as unconstitutional meddling by states in foreign affairs.
The Bush administration had argued that if the laws were permitted to stand it would prevent the government's efforts to speak with "one voice" in international affairs.
Under President Clinton, efforts to aid the elderly Holocaust survivors gathered steam. The US State Department hosted a conference to try to encourage banks, insurance companies, and governments to return assets looted from Jewish victims. With the help of the federal government, several parties including insurance commissioners, Jewish organizations, and European insurers set up the International Commission on Holocaust-era Insurance Claims.
Insurance companies have maintained that this is proper way to collect for the victims.
"There is no way to provide absolute justice to holocaust victims and their families," says Gary Karr, a spokesman for the American Insurance Association in Washington. "We believe the commission set up to handle the INS claim is the best way to provide relief today."
Despite the decision, Holocaust survivors groups vowed they would press on in their efforts to collect from the companies. "This has always been a matter of morality and not just legality," says Gideon Taylor, executive vice president of the Claims Conference, a group that seeks to recover funds for victims.
The commission said it was glad that the issues was finally resolved. "An open court case is never helpful to parties trying to bring something to a close," says Dale Franklin, chief of staff for International Commission. Insurance companies have so far made offers of $37 million from 3,000 separate claims.
Lawyers for the state of California argued that the law did not interfere with foreign policy. They had heard examples of state residents who were unable to find out whether some of these foreign insurance companies had insured their families. The insurance companies found that tracking the information was a complex process. During the Holocaust, the Nazis set up companies to cash in the insurance policies of people being sent to the concentration camps. Still other companies callously cancelled policies after Jewish victims were sent to the camps and could not continue to pay premiums.
Hearing these stories, state insurance commissioners felt compelled to act. In California, they required any insurance company doing business in the state to search its records for details of old policies. This information would go into a public registry. Lawyers for the state said it would help consumers evaluate insurance companies.
• Wire services were used in this report.