Jeanette Friedman’s March 7 article on HR1746, the Holocaust Insurance Accountability Act, surprisingly fails to deal with the facts and relies heavily on comments by the German ambassador, who is naturally against the congressional act.

The act is intended to overcome many of the deficiencies in the process to repay Holocaust victims or their heirs the numerous insurance policies stolen by the Nazis and their collaborators. The original idea for the International Commission on Holocaust Era Insurance Claims to compensate Holocaust-era policyholders for unpaid insurance in a speedy fashion was a good one. But only about 3 percent of the value of the unpaid life policies was returned, no non-life policies were paid, and the process took nine years instead of the two or so originally anticipated.

An even greater ICHEIC failure was that it did not provide needy survivors funds from unpaid policies. ICHEIC recognized that no matter what steps are taken to find claimants, many policies will remain unpaid. This is because whole families were wiped out by the horrific events of the Holocaust, leaving only distant relatives with little knowledge of the policyholders, especially when dealing with events that occurred more than a half-century ago. It was also understood that many records no longer exist. An example is the extensive search for life insurance records in Germany. Only about a quarter of the policies outstanding in the late 1930s were found.

Recognizing this fact, ICHEIC attempted at one time to calculate the overall value of policies — called the "top down approach." The companies would then pay the difference between this overall estimate and the amounts actually paid to claimants to a fund that would support needy survivors and other causes. This approach, however, was forgotten as ICHEIC proceeded, and only relatively small amounts were provided for such a humanitarian fund, mostly under the accord with Germany. Insurance companies failed completely to deal with this issue.

As to Germany, the record is mixed. It did provide 360,000 policyholder names that were posted on the ICHEIC website, but did so only a few months before the filing deadline. For the other countries, the number of Jewish policyholders published is minimal. Moreover, while Germany is the only entity that has pledged to continue to accept claims after ICHEIC’s closure and pay them under ICHEIC guidelines, this seemingly benevolent action is an illusion in its current form. The German insurance association (GDV) will not accept new claims that do not name companies. This is an enormous drawback. Nearly all the German names of policyholders listed on the ICHEIC Website do not indicate a company name, and ICHEIC experience demonstrates that two-thirds of the claimants did not know the company name. Thus, this German action is of little benefit to the claimant. Also on the downside is the method Germany insisted upon to determine a policy’s current value. It produces an amount that is only about 15 percent of similarly valued policies paid under ICHEIC guidelines for all other West European countries.

The extraordinarily low German payments are caused mainly by the inclusion of the 1948 German monetary reform in their asset restitution systems. At that time, the Allied powers insisted on a monetary change in which 10 reichsmarks were made equivalent to one deutschmark. This was done in order to save the post-war German economy from the vast deluge of reichsmarks the Nazi regime had dumped on the market to pay for the war effort. Indeed, without this Allied action, the German economic miracle that followed would not have taken place or would have been much delayed. The problem is that the Jews, who were not responsible for the Nazi war effort, along with many non-Jewish Germans, had to suffer in terms of reduced values of assets for the war-time economic policies of the Nazi regime. The non-Jewish Germans, however, benefited from the economic miracle, while few Jews were left.

Ms. Friedman also states that under HR1746 "no one sees such money except for the lawyers." My own observation is that most of the lawyers representing survivors and heirs have done so despite the long odds of success and only minimal chance of being paid. By comparison, the insurance companies have deep pockets both in hiring lawyers and in lobbying against HR1746.

In all, HR1746 will help overcome some of the many deficiencies in meeting ICHEIC’s original pledge to repay outstanding insurance claims. What is missing, however, is a fund to support the financial and health problems of needy survivors based on the large amounts that will likely remain unpaid. Given Germany’s massive shortfall in returning a fair value of the assets stolen by the Nazis, it should take the lead in an international undertaking to establish such a fund.

Sidney Zabludoff is an economist who specializes in financial matters. As a consultant, he has worked with the World Jewish Congress, the Claims Conference, and law firms on numerous restitution issues, including that of Holocaust-era insurance. He has also assisted individual survivors, has written numerous articles on the topic, and testified twice on the subject in Congress.