AIA Pleased with U.S. Supreme Court Decision Regarding Holocaust-era Policies

January 14, 2003

The American Insurance Association (AIA) issued the following statement by Stephen J. Zielezienski, AIA assistant general counsel, responding to the recent decision by the U.S. Supreme Court to accept AIA’s petition and hear the case of American Insurance Association v. Low.

“This is a good decision that allows the important Constitutional issues in this case to get a full and fair hearing. 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. 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,” said Zielezienski.

“Allowing states to conduct their own foreign policy would undermine the federal government’s ability to speak with one voice to other sovereign nations. 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 federal government has been working with its European allies to bring a measure of justice to those impacted by the Holocaust through negotiated resolution. The California law flies in the face of these efforts by choosing a path of protracted litigation. The U.S. Supreme Court’s decision to review this law will allow us an opportunity to demonstrate the law’s serious Constitutional deficiencies.”

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