On December 31, 2021, New York State Governor Hochul signed into law the Comprehensive Insurance Disclosure Act.

The alleged justification for the act was to reduce the use of "delaying tactics" by compelling disclosure of the complete primary, excess, and umbrella policies implicated by the claim.

These amendments will be unduly onerous on both carriers and defense counsel-for a multitude of reasons. It imposes an obligation on the insurer to immediately identify excess policies, eroding policies, and other information or contracts that affect the available coverage.

New Disclosures

Disclosure of Full Insurance Policies

  • Amended C.P.L.R. 3101(f)(2) now requires defendants to provide plaintiffs with compete information for any insurance agreement through which a judgment could be satisfied within 60 days after serving an answer.
  • This includes all primary, excess, and umbrella policies, and a complete copy of those policies, including declarations, insuring agreements, conditions, exclusions, endorsements, and similar provisions, such as an application for insurance.
  • Defendants have an ongoing obligation to ensure that the information remains accurate and complete, and must provide updated information within 30 days of receiving information that renders the prior disclosure inaccurate or incomplete.
    - The obligation exists during the entire pendency of the litigation and for 60 days after settlement or entry of final judgment in the case inclusive of all appeals.

Eroding Insurance Policies

Disclosure includes any lawsuits that have reduced or eroded, or may reduce or erode, such amounts available under any policy.
- Also requires the amount of attorneys' fees that have eroded or reduced the face value of the policy, along with the name and address of any attorney who received such payments.

Disclosure of Claims Contact Information

Disclosure of the contact information, including the telephone number and e-mail address, of any person(s) responsible for adjusting the claim.
- Includes TPAs and persons within the insuring entity to whom the TPA is required to report.

Certification of Information Provided

Newly added section, C.P.L.R. 3122-b, requires information provided pursuant to subdivision (f) of section 3101 to be certified by the defendant and its attorney that the information is accurate and complete. This new section imposes an obligation immediately upon receipt of the claim.

Application to Pending Actions

  • The bill text states that the law takes effect immediately and applies to all "pending actions."
    - Any information required by this law that has not previously been provided in pending cases shall be provided within 60 days after the date that the law shall become effective
    - Carrier must look back and comply with pending litigation

Carrier Obligations

  • By March 1, 2022, the carrier must determine if the requirements of C.P.L.R. 3101(f) have been met, and, if not, it must provide the relevant information to defense counsel.
  • Going forward with cases, the carrier must:
    - At the inception of a case, identify all policies at issue.
    - At the inception of a case, procure copies of all policies at issue and identify any lawsuits that have reduced or eroded the policies.
    - Continuously monitor the policies at issue and immediately report any changes to defense counsel.
    - Provide name, telephone number, and e-mail address for claims adjusters (including TPAs).
    - Provide up-to-date contact information throughout litigation for insured.
    - Put insured on notice that their insurance application will be turned over to plaintiff's counsel.

Defense Counsel Obligations

  • By March 1, 2022, defense counsel must look through all pending cases to determine what insurance information has previously been disclosed and gather missing information from the carrier (full copies of policies, adjuster contact information, etc.)

Defense counsel must provide two certifications, one from the insured and one self-certification at the time of disclosure.

There is an ongoing obligation to ensure that the information disclosed remains accurate and complete throughout litigation.

There are many questions with the implementation of this law, most glaringly the effects of disclosure on negotiating settlement with plaintiff's counsel. There is no indication on what consequences a party will endure for non-compliance or providing false information, even mistakenly so. The term "pending actions" is also not defined within the amended/new statute, which is particularly relevant to disposed actions with a motion pending and stayed actions. We anticipate much litigation interpreting these new rules.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.