Peer Review and Claims Processing Audit Reports

ICHEIC initiated an exhaustive program of audits of claims processing and decision making by both its own member companies and other organizations, involving internationally recognized accounting firms. These audits varied in type. Categories of those entities audited included:

1. The companies that signed the Memorandum of Understanding (MoU);

2. The Generali Trust Fund (subcontractor for processing Generali claims from April 2001 to November 2004);

3. Ten representative German insurance companies included in the settlement agreement between ICHEIC, the German Foundation "Remembrance, Responsibility and Future" and the German Insurance Association (GDV), called the "BaFin Audits"; and

4. The 8A humanitarian claims process, subcontracted to the Conference for Material Claims Against Germany, Inc. (Claims Conference).

MoU Company Audits

The MoU stated that the Insurers which are a party to the MoU must adhere to proscribed objectives and processing standards and that these standards be subjected to audit by an internationally recognized accounting firm.

The Insurers which are parties to the MoU are Allianz AG of Germany, Assicurazioni Generali S.p.A. ("Generali") of Italy, AXA S.A. of France, Winterthur Life Insurance Company of Switzerland and Zurich Insurance Company, also of Switzerland. Note that Winterthur was acquired by AXA after the claims handling process was complete.

ICHEIC developed five broad 'Audit Standards', or performance standards, against which the Insurers' performance could be audited. These Standards are as follows:

1. Identify relevant companies

2. Identify relevant archive sites

3. Identify and secure relevant records

4. Develop investigations database

5. Investigate incoming claims

Standards 1 - 4 relate to finding, collecting, safeguarding and accessibility of records from the relevant period of 1920 - 1945. Standard 5 relates to the companies' processes for receiving and recording incoming claims and inquiries and searching their available records for possible matches. Standard 5 also covers processing the claims and issuing either a denial or offer letter to the claimant, complete with proper notifications and relevant documents supporting their conclusion.

The Standards take into account the particular circumstances of each Insurer nearly 60 years after the end of the Holocaust era.

As part of the compliance process, the Insurers were required to prepare a Management Report describing the work undertaken to comply with the ICHEIC Standards 1 to 5. The establishment of accessible records and formation of a processing system under these standards were then audited as a "Stage 1" audit. The actual handling of claims and inquiries using the records and processing procedures approved under the Stage 1 audit was then audited under "Stage 2" of the audit process.

Stage 1 audits were carried out in the first instance by audit firms appointed by the Insurers. These firms submitted a Compliance Report, with an attached copy of the Management Report, relating to each company or group. ICHEIC then appointed a second audit firm to carry out a Peer Review audit of each Compliance audit. The Peer Review auditors also carried out their own limited additional testing of each Insurer's records. All of the audit firms, Compliance and Peer Review, have extensive international capabilities.

All reports-Management, Compliance and Peer Review-were submitted in final draft form to an ICHEIC committee empowered by the ICHEIC Commissioners to oversee the audit process (the Audit Mandate Support Group, or AMSG, which included representatives of regulators, Jewish organizations, and companies) which considered the findings at debrief meetings. At these meetings, the Insurers and audit firms presented their reports for discussion and review by the committee. Any additional work requested by the AMSG was carried out by the companies and/or audit firms prior to the finalization of their reports.

The Stage 1 reports can be seen by clicking on Stage 1 Audits. There is a Peer Review Report related to each company or group (1), to which are attached a Compliance Report and Management Report (including any supplements or addenda). The Peer Review Reports can be identified from their file names.

All Stage 1 reports relating to a company or group - Peer Review, Compliance and Management - must be considered in their totality, not read in isolation, in order to gain a complete and clear understanding of the process.

Stage 2 audits have been carried out by firms appointed directly by ICHEIC. Stage 2 audit reports are documents separate and distinct from the Stage 1 reports, and are accessible as such. There are no Management or Compliance reports in the Stage 2 process. Click on Stage 2 Audits to see the Stage 2 audit reports.

For each Insurer, audits relate either to the entire company or group, or to individual subsidiaries or sub-groups. In totality, 15 entities were subject to Stage 1 audits and 12 entities subject to Stage 2 audits. Fewer entities were subject to Stage 2 because (1) a sub-set of Belgian companies were eliminated since their claims were handled by a government commission, and (2) some company groupings changed between Stages 1 and 2.

Generali Trust Fund Audit

By agreement between ICHEIC, Assicurazioni Generali S.p.A. ("Generali") and The Generali Fund in Memory of the Generali Insured in East and Central Europe Who Perished in The Holocaust (the "Generali Trust Fund" or "GTF"), the GTF carried out processing of Generali claims between April 2001 and November 30, 2004. ICHEIC terminated this agreement effective November 30, 2004. Thereafter, claims were handled by Generali itself. ICHEIC commissioned Deloitte to carry out an audit of GTF's claims handling procedures and processing. A copy of the audit report can be seen by clicking on GTF Audit in the Audit Report menu.

BaFin Audits of German non-MoU Insurers

The German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, or "BaFin"), which regulates insurance companies in Germany, with the assistance of ICHEIC observers, carried out audits of ten German insurance companies, selected by mutual consent, which were not members of ICHEIC, in accordance with the terms of the agreement between the Foundation "Remembrance, Responsibility and Future", ICHEIC and the German Insurance Association (Gesamtverband der Deutschen Versicherungswirtschaft e.V. or "GDV". German companies were required to comply with the agreement (2) which incorporated claims handling requirements similar to ICHEIC's five Standards. The BaFin audits covered the companies' compliance with those requirements. A copy of the BaFin audit report can be seen by clicking on BaFin Audits in the Audit Report menu.

8A Humanitarian Claims

Consideration of claims qualifying under Section 8A of ICHEIC's MoU was carried out by ICHEIC, with the actual processing subcontracted to the Conference on Jewish Material Claims against Germany, Inc, (the "Claims Conference"). ICHEIC commissioned McGladrey & Pullen, LLP to perform an audit of this process. A copy of the audit report of 8A claims processing can be seen by clicking on 8A Audits in the Audit Report menu.

March 2007

(1) In the case of Zurich, there are two Compliance Reports, and in the case of Generali, there are often supplemental reports, depending on the relevant group or company.

(2) A copy of the agreement can be found under ICHEIC Agreements.