Calif. Holocaust Law Gets U.S. High Court Review
By Daniel Hays
NU Online News Service, Jan. 13, 3:34 p.m. EST?The American Insurance Association said Saturday it welcomed the U.S. Supreme Court decision to review a California law designed to help Holocaust victims secure compensation from insurers.
On Friday the Supreme Court granted a writ of certiorari responding to an AIA petition for a review of a July ruling by the 9th U.S. Circuit Court of Appeals in San Francisco, which upheld the Victim Insurance Relief Act of 1999. Under the measure, insurers that did not comply could lose their license to do business in California.
They are required under the law to provide information about policies sold in Europe from 1920 to 1945.
Stephen J. Zielezienski, AIA assistant general counsel, in Sacramento, Calif. said the high court's action in the case of American Insurance Association v. Low
"is a good decision that allows the important Constitutional issues in this case to get a full and fair hearing."
He said the law in question requires insurance companies operating in California to report information about policies sold in Europe to Europeans by European companies to cover European risks from 1920 to 1945, or lose their licenses to sell insurance in California.
Mr. Zielezienski said in many instances, the policies were not even issued by California companies, but by corporate relatives of those companies. "We have been asking all along, and continue to ask, the courts to review this law because it violates the foreign affairs powers the U.S. Constitution vests in the executive branch of the federal government," he said.
In Los Angeles, Frank Kaplan, special counsel for the California Insurance Commission, said, "We're looking forward to the Supreme Court finally resolving this issue.
"This is a situation where Holocaust survivors were children in World War II and don't have information about what policies their families were taking out. In order to submit a claim they need this information. Without the insurance companies providing it they'll never get that information. California believes it has a proper regulatory function in asking to obtain that information."
He disputed the argument that the law usurped federal powers commenting that "it doesn't do that at all. It deals with private companies. It doesn't direct its attention to any foreign government at all whatever.
"Federal initiatives in this matter have not been affected at all. There's no threat of interference whatsoever," he said.
Mr. Zielezienski, said the Washington, D.C.-based AIA's viewpoint is that "Allowing states to conduct their own foreign policy would undermine the federal government's ability to speak with one voice to other sovereign nations."
He continued that, "The California law also violates the due process clause by asserting jurisdiction over insurance transactions that took place wholly outside of California. Finally, the law runs afoul of the commerce clause, and is not saved from this violation because of the McCarran-Ferguson Act."
The AIA appeal to the Supreme Court was supported by briefs by the U.S. Justice Department and the German and Swiss governments.
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.