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UNCOVERING HOLOCAUST TIES

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MUNICH, Germany-Several European insurers are facing troubling revelations about their wartime business dealings with the perpetrators of the Holocaust and its victims.

The German magazine Der Spiegel reported last month that groups of insurers led by Allianz Insurance Group wrote property and liability coverage for Nazi SS operations at Auschwitz and other death camps.

Allianz has acknowledged its dealings with the SS and announced it has hired a University of California history professor to research the company's wartime activities.

The revelations this month led Vishay Intertechnology Inc., a large Pennsylvania electronics manufacturer headed by a Holocaust survivor, to cancel its Allianz global property insurance program. Whether other policyholders will follow suit remains to be seen.

The new disclosures follow a lawsuit that Holocaust survivors and heirs filed in a New York federal court, charging that Allianz and other insurers failed to honor life insurance policies taken out by Jews and other victims of Nazi persecution. The suit, which originally named seven insurers, was amended earlier this month to add 12 new defendants, including

German, Swiss and French insurers.

Meanwhile, Assicurazioni Generali S.p.A., one of those named in the New York action and reportedly a participant in the concentration camp coverage, agreed last month to set up a $12 million Holocaust memorial fund in Israel after Israeli government leaders threatened a boycott of Migdal, an Israeli insurer in which Generali recently acquired a majority interest. Generali also has said that it will open a Trieste, Italy, warehouse containing wartime archives to inspection by heirs of former policyholders.

Generali and other insurers have denied claims under many policies issued to Eastern European residents, arguing that Communist governments seized the insurers' assets after the war and should therefore be held liable for the claims.

In the 1950s and 1960s, the German government settled many other claims arising from the Nazis' seizure of Jews' life insurance assets, said a spokesman for Allianz, which has set up a hot line for Holocaust victims and their families and hired auditor Arthur Andersen to review its wartime policy records.

After examining German government archives in Berlin and Koblenz, Spiegel reported that Allianz acted as lead insurer for pools of German companies that covered SS-run slave labor factories, barracks, motor pools and other operations attached to several death camps, including Ausch-witz, Buchenwald and Dachau.

Allianz representatives inspected death camp sites with SS officials and found the risks to be minimal. One Allianz delegate wrote of an Auschwitz site in 1942 that "thanks to constant military supervision, impeccable order and cleanliness prevails," Spiegel reported.

Allianz and other German insurers began firing Jewish employees in 1936 when they could have kept them on with little risk, according to Spiegel. Allianz directors also were close to top Nazi Party officials, and Kurt Schmitt, the insurer's chairman when Adolf Hitler rose to power, resigned in 1933 to become Hitler's Minister of Economic Affairs. Mr. Schmitt joined the SS the same year and rose to the rank of brigadier general, the magazine said.

In an interview that accompanied the article, Herbert Hansmeyer, a member of the management board of Allianz and chairman of Allianz subsidiary Fireman's Fund Insurance Cos., said the company "got dangerously close to being involved in the Holocaust."

"Possibly some employees even knew what was happening in the camps," Mr. Hansmeyer told Spiegel. "However, we must differentiate between mass murders in the gas chambers and the SS operations. We didn't insure the concentration camps themselves."

An Allianz spokesman said the company believes the Nazi government never insured gas chambers and other elements of the camps' machinery of death, but "these are all things that are currently being researched."

"We do not want to make unnecessary distinctions between these things," he added. "Morally, there is no distinction."

Vishay Intertechnology, a Malvern, Pa., electronics manufacturer with more than $1.2 billion in annual sales and 15,000 employees, this month canceled its Allianz global property program insuring 56 factories and other locations in 15 countries, confirmed Becky Huntsman, corporate risk manager. The program generated a $1.2 million annual premium, she said.

Felix Zandman, Vishay's founder and chairman, is a Holocaust survivor whose parents were killed in Auschwitz.

"We were obviously very surprised and troubled by the decision, but we can also understand there were deep personal feelings involved," the Allianz spokesman said.

Allianz has not had any similar cancellations so far, though a number of other policyholders have sought "clarification" of the insurer's war-time history, he said.