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15 de março de 20226 minute read

Amendments to Comprehensive Insurance Disclosure Act are in effect: What New York defendants need to know

New York Governor Kathy Hochul has signed into law certain amendments of the Comprehensive Insurance Disclosure Act which again amend CPLR 3101(f) and amend the act-created CPLR 3122-b.

While the amendments take effect immediately, the disclosure obligations are applicable only in actions commenced on or after the effective date; disclosures are not required for actions already pending. Pursuant to the amendments, the required disclosures now must be served 90 days after the filing of an answer in any case filed on or after February 24, 2022.

The underlying requirement for extensive disclosures remains unchanged. However, the specifics of the disclosures have been modified by the amendments.

Changes to the act’s disclosure requirements in the amendments

Under the original version of the Act, amended CPLR 3101(f) required defendants to disclose “the existence and contents of any insurance agreement under which any person or entity may be liable to satisfy part or all of a judgment that may be entered in the action or to indemnify or reimburse for payments made to satisfy the entry of the final judgment.”  

Following the approval of the amendments, this disclosure is specifically done by producing “a copy of the insurance policy in place at the time of the loss or, if agreed to by such plaintiff or party in writing, in the form of a declaration page.”

Under amended CPLR 3101(f), defendants (as well as third-party defendants, counter-claim defendants, or cross-claim defendants) must now disclose within 90 days of filing their answer:

  • Complete copies of all potentially applicable primary, umbrella and excess policies (unless the party to whom the disclosure must be made agrees in writing to accept a declaration page) insofar as such documents relate to the claim being litigated
  • The total limits of the applicable policies and the amounts still available under the insurance policy to satisfy, or reimburse for, the judgment, taking into account any erosion or other offsets, and
  • The name and e-mail address for persons responsible for adjusting the claim.

Defendants are no longer required to disclose the following information as a result of the amendments:

  • Insurance applications
  • The telephone number of the persons responsible for adjusting the claim
  • The identification of any lawsuits that have reduced or eroded the limits of any available insurance and
  • The amount of any payment of attorneys’ fees that have reduced or eroded the limits of any available insurance (ie, in the case of “burning limits” policies).

The amendments do, however, broaden the disclosure requirements to include the disclosure of all insurance policies as the original act only required disclosure of insurance policies “sold or delivered within the state of New York.”

As was the case with the original act, these requirements represent a major change to CPLR 3101(f), which previously required disclosure of only the existence and contents of relevant insurance policies when requested by another party as part of discovery. 

What New York defendants need to know

In analyzing and assessing compliance with the act and the amendments, defendants in civil litigation should know:

  • The amendments took effect immediately upon Governor Hochul’s signature and apply only to matters filed on or after February 24, 2022.This does not apply to matters already pending in New York.
  • The disclosure obligations continue to apply to defendants, third-party defendants and any “defendant on a cross-claim or counter-claim.”  Accordingly, all parties to a lawsuit, including a plaintiff against whom a counterclaim has been asserted, must disclose any insurance information applicable to the claims against them.
  • While the disclosure obligations may be partially alleviated by a written agreement that a plaintiff will accept a declaration page in lieu of the complete insurance policy, that agreement can be unilaterally revoked by the plaintiff at any time. The complete insurance policy must then be produced.
  • The amendments specifically note that “[d]isclosure of policy limits…shall not constitute an admission that an alleged injury or damage is covered by the policy.”
  • Defendants’ obligations are “ongoing.”  In other words, defendants must ensure that their disclosed insurance information remains accurate and complete throughout the pendency of the litigation and for 60 days after any settlement or entry of final judgment, including any appeal.
  • Defendants are still required to ensure that their disclosures remain complete and accurate on an ongoing basis, and under CPLR 3122-b, are required to file certifications attesting that the information provided pursuant to CPLR 3101(f) is complete and accurate.
  • The disclosure obligations do not apply to actions brought to recover motor vehicle insurance personal injury protection benefits.

Going forward

While the amendments alleviate some of the more onerous and intrusive disclosure obligations, the obligations remain burdensome.

The disclosure obligations will likely be especially burdensome in the context of mass tort litigation and other matters involving corporate entities that no longer exist. Compliance may require coordination among and between defendants, their in-house risk management teams, brokers, primary insurers and counsel.  Defendants are encouraged to discuss the issues with their counsel as soon as possible. 

DLA Piper will continue to monitor for developments in this area, as well as cases in which parties seek compliance with the act through motions to compel or otherwise under the CPLR. 

Learn more about this development by contacting the authors. You may also enjoy our earlier alert on the act, New York implements new insurance coverage disclosure rules for defendants.

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