U.S. Supreme Court Defeats Holocaust Law

The U.S. Supreme Court today defeated a California law that required insurance companies to provide information about all of their Holocaust-era policies.

In a 5-4 vote, the high court decided that California’s Holocaust Victim Insurance Relief Act of 1999, which revokes the license of any company that does not comply with the law, unconstitutionally interfered with the president’s conduct of the nation’s foreign policy.

Under the California law, insurers were required to retrieve, compile and disclose extensive information regarding every insurance policy sold in Europe between 1920 and 1945 as a means to help provide for recovery of lost insurance claims.

The ruling was a victory for a number of insurers, the American Insurance Association (AIA) and the U.S. Justice Department, which had appealed to the Supreme Court. The German and Swiss governments also opposed the law, stating that compliance by insurers would violate European privacy laws.

A federal judge in California at first blocked enforcement of the law after discovering the insurers presented a formidable case that it interfered with the federal government’s control over foreign affairs.

But a U.S. appeals court in San Francisco did not concur, also ruling that the law does not violate the insurers’ due process rights because hearings must take place before California removes any noncomplying company of its license to do business in the state.

The high court, in an opinion authored by Justice David Souter, reversed the appeals court’s decision.

Editor’s Note: Look for reaction to the ruling in upcoming reports on www.insurancejournal.com