New York Amends Newly Enacted Comprehensive Insurance Disclosure Act for Future Litigation.

On December 31, 2021, the Comprehensive Insurance Disclosure Act (“Act”), was signed into law in New York. This Act amended CPLR § 3101(f) by placing new broad disclosure requirements on defendants and defense counsel in New York. The Act would have required compliance in all pending litigation by March 1, 2022. However, prior to the March 1, 2022 deadline, New York amended the Act to better tailor it for its intended purpose.

The amendments make the Act less burdensome than the original Act, but still place broader disclosure requirements on the defense than the pre-Act version of CPLR § 3101(f). These amendments reduce some of the most burdensome obligations and make it so that applications for insurance no longer need to be disclosed. The most immediate result of the amendments is that they are effective only to actions commenced after its effective date.

We outline below the disclosures that the amended Act (CPLR § 3101(f)) requires, noting some of the newest changes:

1.  Within 90 days of service of an answer, defendants/third-party defendants must disclose insurance information in the form of a copy of the policy, or if the plaintiff agrees, the declaration page. Plaintiffs still can request full copies if they so choose after originally agreeing to accept the declaration page.

2.  The insurance information that defendants/third-party plaintiffs must disclose includes all primary, excess, and umbrella policies, contracts or agreements, “insofar as such documents relate to the claim being litigated.”

3.  The defendant/third-party defendant must provide the name and e-mail address of an assigned person responsible for adjusting the claim (the initial version of the Act also required the disclosure of the person’s supervisor).

4.  The defendant/third-party defendant must provide the total limits available under any policy, taking into account erosion or other offsets.

5.  The defendant/third-party defendant must make reasonable efforts to update the available limits at several points throughout the litigation, including: the filing of the Note of Issue; when entering court ordered or voluntary ADR; the commencement of trial: and 60 days after final judgment.

6.  The amendments do not apply to PIP claims.

7.  Disclosure under the Act is not an admission that coverage exists.

To ensure compliance, at the outset of case assignments, carriers should identify the claims professional responsible for adjusting the claim and provide information that sets forth total limits of each policy implicated and any policy erosion due to payment of prior claims or defense costs, where the latter is applicable. In respect of how much of the coverage tower that a defendant must disclose, an open question exists. The required disclosure is limited to only those policies that “relate to the claim being litigated.” Thus, when a claim presents with liquidated damages that are well below the total limits of a defendant’s coverage tower, or where bodily injuries as alleged will not implicate the upper levels of a defendant’s coverage tower, non-disclosure of non-implicated policies can be justified.