The National Insurance Institute has illegally withheld some NIS 40 million that was meant to help the families of terror victims pay for health insurance, a potential class-action suit claims.

The suit, and the request to recognize it as a class action, was submitted to the Central District Court last week by attorney Naama Halevi Tzoref, who lost her parents, Rafi and Helena Halevi, in a suicide bombing in Kedumim in May 2006.

In her claim, filed by attorneys Adam Fish and Tzachi Fistel, Tzoref argues that for over a decade, the NII has been ignoring its legal obligation to help bereaved families pay their health funds each month, and has refused to do so even when this practice was exposed.

Tzoref said that when her parents were murdered, she and her three siblings were certain that the NII would help them wade through the necessary process, which had suddenly been forced upon them by tragic circumstances. Instead, Tzoref said, they found themselves in a constant battle with the NII to secure their most elementary benefits, which were repeatedly denied or delayed.

"The NII's work method ... leaves [bereaved families] with two choices: one, to beg the institute to deign to give them their rights, or two, to wage legal battles until they get their rights," Tzoref said in her claim, adding that the NII's method is "successful," in that many bereaved families just give up without getting everything that's due them.

"The court is being asked to put a stop to this conduct, to express its dissatisfaction, and to order the institute to immediately pay the monthly health insurance subsidies as stipulated by law, and to return the monies illegally withheld for 24 months preceding this action," the claim states.

Tzoref says the affected group numbers some 2,500 people, making a class-action suit a legitimate framework for examining the allegations.

The NII said in response, "We pay for the health insurance of bereaved families who have filed the appropriate reports, since payment is dependent on whatever additional income the families have. According to the institute's records, this benefit is being paid to 1,781 out of Israel's 2,453 bereaved families. In any case, to ensure that benefits are being fully utilized, the NII will soon conduct another eligibility study of the remaining families, to ensure that payments are reaching everyone who's eligible."