Monthly LRA Update: October 2020

JUDICIAL DEVELOPMENTS

Andresen v. Guggenheim Partners – COLI Commissions Litigation

On September 1, the Supreme Court of New York (NY County) granted defendants’ (Guggenheim) motion to dismiss a complaint brought by a former employee (Andresen), who was seeking commissions on COLI policies purchased by the firm in 2006 and 2007 for which she was purportedly named as the insurance agent of record. The court primarily determined that the plaintiffs’ claims were time-barred.

Andresen was hired in September 2006 as an executive assistant. She was insurance licensed, but her employment contract did not include any mention of commissions, bonuses or other compensation. According to the Opinion, Andresen asked if she would be entitled to any additional compensation for writing the COLI policies, and she was told she was not. The Defendants “required [her] to execute documents purporting to assign her commissions on certain of the Guggenheim [COLI] policies” to the affiliated insurance agency. The court concluded that this should have triggered an investigation by the plaintiff.

The plaintiff asserts that in late 2018 she received some misdirected mail from a John Hancock-associated entity at her home address. She contacted John Hancock and was informed that she was still the insurance agent of record for dozens of COLI policies issued by John Hancock to Defendants.

REGULATORY DEVELOPMENTS

Banking Regulators Finalize Corrections to the SA-CCR

On September 17, the OCC, FDIC and FRB published a final rule in the Federal Register that makes technical corrections to certain provisions of the capital rule related to the standardized approach for counterparty credit risk (“SA-CCR”). The final rule was effective as of September 17.

LEGISLATIVE DEVELOPMENTS

California Consumer Privacy Act (CCPA) – Extension of Temporary Exemption for Employee Data

On September 8, California Assembly Bill 1281 (AB 1281) was officially presented to the Governor for signature after having passed both the Assembly and the Senate. Presently, the CCPA exempts (until January 1, 2021) from its provisions certain information collected by a business about a natural person in the course of the natural person acting as a job applicant, employee, owner, director, officer, medical staff member, or contractor, as specified. The CCPA also extended certain “business to business” communications to January 1, 2021.

Both of those extensions were intended to allow the legislature to more fully address the topics. However, due to COVID-19, the legislature’s focus has shifted.

This amendment will extend both exemptions until January 1, 2022 (i.e., for one additional year). It is worth noting that the extension for employee data will potentially be impacted by a California ballot initiative (Proposition 24) which, if enacted, would amend the CCPA in various ways. Relevant to this bill, Proposition 24 would extend these exemptions for two years to give industry, labor and other relevant stakeholders additional time to contemplate how to most appropriately protect employee privacy.