The world's leading financial daily reports: A Dutch insurance company stands firm against the WJC blackmail, and is bluntly threatened with economic annihilation by them

A boycott too far

Should companies that suffered under Nazi occupation be liable for Holocaust claims? Gordon Cramb reports

WITHIN the next two weeks, Aegon, the Dutch insurance group, will he taking a stand on its record during the second world war that has far-reaching implications for the future of its world-wide business.

Unless it signs up by mid-December to a voluntary, US-based commission on insurance claims from the Holocaust era, Aegon faces the threat of a boycott by the World Jewish Congress (WJC).

The commission, which was set up last year to investigate policies left unpaid, often because entire families had perished, is headed by Lawrence Eagleburger, a former US secretary of state. Among the European companies that have joined -- anxious to make their peace and avoid the threat of multi-million-dollar class action suits -- are Allianz of Germany and Generali of Italy.

Aegon, however, refuses to have its war record judged alongside that of its German counterparts. It says it is willing to join the commission, but only if it is granted a special category of membership based on two provisos: that "Dutch people were victims of the Nazi regime" and recognition of "the role of the Dutch government and insurance industry in dealing fairly with the issue of Holocaust claims for over 50 years".

"Our country suffered," says Kees Storm, Aegon's chairman. "We are in a totally different position from other insurers."

Given that Mr Eagleburger's commission already includes Axa of France -- another country occupied by the Nazis -- it is unlikely that he will grant Aegon special status. The Dutch group says it will stick to its principles.

Aegon, one of the world's top 10 insurers, derives well over half its profits from the Americas, primarily the US, where it has just spent $10.8bn (£6.7bn) in acquiring Transamerica, an insurer based in San Francisco. If Aegon refuses to co-operate with the commission, it might soon face a boycott similar to the one imposed on Swiss banks last year, which ended in a $1.25bn settlement.

"In the case of the Swiss banks, we reduced their business activities [in the US] within two months by 22 per cent," Elan Steinberg, WJC executive director, says. "The insurance companies will be even easier [to target]."

Mr Steinberg says the importance of Aegon's US interests makes it particularly vulnerable. "This is where the leverage is clearest," he says.

Mr Steinberg claims that, compared with other countries that came under Nazi occupation, the Netherlands did not restore a large amount of seized assets to the families of Holocaust victims. There was a reason for this: more than three-quarters of Dutch Jews did not survive the Nazi occupation -- a much higher proportion than elsewhere in western Europe. "Where a large part of the community came back, there was an element of restitution," he says. "The record of Holland was the worst."

Should Aegon refuse join Mr Eagleburger's commission, the WJC plans send 1m letters to its members by January, and is drafting a resolution to urge public finance officials to stop using the services of the Dutch group and "ultimately divest Aegon stock", he says. The boycott is to be "both broad and incremental".

US state authorities, represented on the commission, are also investigating the war records of European insurers. California's state insurance regulator has summoned Aegon and other insurance groups this week to give evidence on insurance policies sold in Europe between 1929 and 1945. The information is required by California's Holocaust registry law, which comes into force next April, and unlike Mr Eagleburger's commission, attendance before the state insurance regulator is compulsory.

Aegon will tell the California hearing that it knows of no outstanding obligations from that period. To which Mr Steinberg retorts:

"If they have no unpaid claims, why are they afraid of joining the international commission?"

Commission members have to accept Mr Eagleburger's findings on how to value policies from that era -- at about 10 times their nominal worth -- and to whom they should be paid out.

In return, the insurers are to be protected from class action suits and sanctions, such as the withdrawal of operating licences, that could be imposed by industry regulators in states such as California. Aegon's stance, however, does not mean the issue has been resolved within the Netherlands. Only this month, the Dutch association of insurers reached agreement with local Jewish groups on a Fl 50m (¤22.7m) settlement to cover any outstanding unpaid claims, and to create a Jewish foundation.

Aegon is funding a quarter of the total, based on the previous market share of the five companies that formed the group. Aegon's Mr Storm says: "We are confident that, with the support of the Dutch Jewish organisations, we can convince the American interest groups that we have done justice in a rightful way."

Mr Steinberg says he has no objection to national settlements but adds: "If Aegon believes it can settle this with a payoff to any of our affiliates, it has severely miscalculated."

The Nazi occupiers in 1941 commandeered Lippmann Rosenthal (Liro), a Jewish-owned Amsterdam bank, and turned it into the collection point for the valuables of Dutch Jews. There the Jewish population had to surrender savings, shares, property documents, precious metals, jewellery, artworks and other collections.

They were required to cash in their life assurance policies and hand the proceeds over to the bank. Insurance companies were then ordered to pay Liro the value of the estimated 22,000 Jewish policies remaining on their books.

After the war, the Dutch government sought to restore the seized assets, and the intervening years brought a steady trickle of insurance claims. Joop Sanders, secretary of the CJO, the Dutch Jewish grouping which reached this month's accord with the industry, says the country's pre-war community was relatively poor, adding: "We are absolutely sure it is enough for all claims that might come." Their lack of wealth also meant few could flee abroad. That, rather than any Dutch collaboration, was a main reason a high percentage died, says Mr Sanders. "And it was difficult to hide. We do not have mountains."

But a country that brought the world Anne Frank's Diary -- the chronicle of an Amsterdam family first sheltered and then betrayed -- is still having to come to terms with the aftermath of occupation. Only two years ago, for example, it was revealed that finance ministry officials in the late 1960s had been allowed to buy unclaimed valuables in the Liro vaults at knockdown prices.

In New York, Mr Steinberg promises to release next month "reams of documents of what we believe is owed" by Aegon. "I think they are getting bad advice, certainly from a moral point of view," he says.

The Dutch insurer says it is sure of its moral ground. The question is whether, in refusing to join the commission, it is putting principles before prudence.

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