This past year brought new laws requiring changes to policies commonly found in California employee handbooks. To ensure compliance with current California law, employers should review and update their handbooks within these first few months of 2021.
This week, in AXIS Reinsurance Co. v. Northrop Grumman Corp., ____ F.3d ____, 2020 WL 5509743 (9th Cir. Sept. 14, 2020), the Ninth Circuit addressed an important question of first impression: When can an excess insurer second-guess an underlying insurer’s decision to pay a claim? Prior to AXIS Reinsurance, there had been no California or the Ninth Circuit case discussing an excess insurer’s right to make a covered-claims challenge to the exhaustion of underlying insurance, even though policyholders frequently encounter such arguments.
The Ninth Circuit recently reminded companies that they must provide notice to consumers when they change their terms and conditions, even where original terms state that they are subject to change at-will and at any time (i.e. the original contract contains a “change-of-terms” provision). Without express notice to the consumer, any change is unenforceable.