On this site, we previously reported about the comprehensive rule changes made in New York to a defendant’s obligation to provide disclosure regarding available insurance coverage. We also covered the immediate calls for amendments to these new insurance disclosure requirements as to some of the more onerous provisions among the new rules. (See “Amendments to New York’s Onerous New Insurance Disclosure Requirements May Be Imminent” and “New York Ends the Year with Onerous New Insurance Coverage Disclosure Rules for Defendants in Product Liability Litigation.”)
I am pleased to report that those amendments have been passed and are now law.
New York’s Comprehensive Insurance Disclosure Act, which went into effect upon signing by Governor Hochul on December 31, made wholesale changes to CPLR §3101(f)’s insurance disclosure requirements. As initially passed, the Act required defendants to provide a complete copy of all insurance policies that “may be liable to satisfy part or all of a judgment.” Once the policies are identified, the new rules also required disclosure of the policies’ application, information about the policies’ erosion (if any) by prior payments of claims, settlements and/or attorneys’ fees, and the identity of the claims handler or third-party administrator. The Act, in its initial form, expressly applied to pending cases, required compliance within 60 days and required that the disclosure be updated on a regular basis. All disclosure must be certified as complete and accurate by counsel and the defendant.
The amendments just passed by the state legislature and signed into law on February 24 by Governor Hochul amend the Act to:
- Apply the Act’s rules to cases commenced after December 31, 2021 (i.e., no retroactive effect to pending cases)
- Require compliance within 90 days of filing an Answer (instead of the previous 60-day requirement)
- Require disclosure of only a copy of the policy; or, if a written agreement with the plaintiff is in place, only its Declaration Page
- Require disclosure of a full copy of all primary, excess and umbrella policies, but only “insofar as such documents relate to the claim being litigated”
- Require disclosure of the total amounts left in the policy(ies) after erosion, but without the need to provide detailed information about the previous claims and litigation that caused the erosion of the policies’ limits
- No longer require production of the application of insurance
- Require disclosure of only the name and email address of an “assigned individual” and/or adjuster/TPA, without having to disclose the person’s phone number
- Require only a duty on the party to make “reasonable efforts” to ensure that the disclosure is accurate and complete, but require updates to the information at the filing of the Note of Issue, before mediation or settlement conferences and at trial call
- Exempt automobile No-Fault and Personal Injury Protection (PIP) policies.
In spite of these amendments, there are some difficult aspects of this new law that remain in place. For example, although detailed information about prior lawsuits and claims need not be provided, information about any policy’s previous erosion still must be located, gathered and calculated by the party and its insurer and the information must be continuously tracked and updated going forward.
Moreover, the amendments do not avoid the newly created CPLR §3122-b requirement that the party and its counsel certify compliance with the Act’s requirements in the form of accompanying affidavits and affirmations. Nevertheless, simply changing the Act’s reach to exempt existing cases alone would lessen the immediate burden of the new rules and allow time for insurers and risk managers to implement systems to track the required information on a going-forward basis.
The amendments are far from perfect in our opinion, but the defense bar and insurance companies, as the saying goes, “should not look a gift horse in the mouth.”