Mon Jun 9, 2008 3:39pm EDT

NEW YORK, June 9 (Reuters) – Final approval of a settlement has been granted to thousands of Holocaust victims and their heirs against Italian insurer Generali over unpaid insurance policies during the Holocaust era.

A U.S. appeals court on Friday upheld the settlement that was reaffirmed by a lower court judge in January, awarding what lawyers have estimated to total $50 million in payouts to more than 50,000 potential class members.

“We conclude that it was not error for the District Court to approve the settlement,” the Second Circuit Court of Appeals ruled.

Generali (GASI.MI: Quote, Profile, Research) was among the biggest insurers in eastern Europe before World War Two and its policies were popular with Jews. It faced a class-action lawsuit over claims it failed to honor policies held by victims of the Nazis.