New York significantly expands – then slightly concludes – Requirements for disclosure of insurance in civil claims

New York’s insurance policy disclosure requirements have changed dramatically in recent months. On 31 December 2021, Governor Hochul signed the Law on Complete Disclosure of Insurance (the “Law”) as a law. Prior to the enactment of the Act, the disclosure requirements for insurance information under the then-existing version of Section 3101 (f) of the New York State Law and Civil Code (CPLR) simply stated that a party seeking relevant insurance information in a lawsuit “ may receive disclosure of the existence and content of any insurance agreement under which any person engaged in the insurance business may be liable … ”For years, responding to requests for insurance information under CPLR 3101 (f) has been like a generally painless task that requires minimal effort. The law seeks to change and, as described below, significantly change long-standing civil law practices in New York State.

The original version of the law went into effect immediately, applied to all pending and future civil cases in the Supreme Court of the State of New York, and imposed incredibly extensive obligations to identify defendants. Among these obligations was a requirement for automatic disclosure, within 60 days of the response to the complaint: (1) full copies of all policies that may correspond to part of the entire decision; (2) applications for such policies; (3) contact information of the relevant corrector (s) (name and telephone number); (4) information on policy restrictions available for the enforcement of a judgment and the erosion of those restrictions, including information on any litigation that has eroded or may undermine the restrictions; and (5) the amount of any attorney’s fees that have eroded policy constraints and the contact information of each attorney who has received such fees. The law also requires defendants to update their insurance disclosures within 30 days of each change. The original version of the law would require all pending civil cases to comply with the disclosure requirements by March 1, 2022.

Amendments to the Act reduce the burden on defendants

Fortunately, on February 25, 2022, Governor Hochul signed a law amending a number of amendments that limited some, but not all, of the overly extensive disclosure requirements originally imposed by law. Significantly, Governor Hochul signed an amendment clarifying that the law no longer applies to lawsuits filed before December 31, 2021. Other amendments extend the insurance disclosure requirements from 60 to 90 days after the response to the complaint and remove the requirement to disclose information related to attorneys’ fees that have undermined the applicable policy

Currently, the law applies only to initiated cases after December 31, 2021. Therefore, for every lawsuit initiated after December 31, 2021, if insurance coverage is available, the defendant (including a third party defendant or a counterclaim or counterclaim defendant) must automatically disclose the following within 90 days from the answer to the complaint:

  1. The identity of all insurance policies that could satisfy a decision in the case;
  1. A copy of the full policy for each insurance that may provide coverage for assessment in a claim. However, a declaration page may be provided instead of the full policy if the claimant agrees in writing. If the claimant accepts a statement page, he shall not waive the right to subsequently receive any other information required under CPLR 3101 (f);
  1. The identity of the person responsible for correcting the disputed claim, including the name and email address of that person; and
  1. The total limits available on any policy, which means the actual funds, taking into account erosion and any other compensation that can be used to make an assessment.1

With regard to the provision of updated insurance disclosures, the amended Act now requires defendants to supplement their disclosures if there is any change in the information initially disclosed when: (1) filing the issuance note; (2) in entering into formal negotiations for the settlement of the dispute, conducted or controlled by the court; (3) in voluntary mediation; (4) when the case is invited for consideration; and (5) 60 days after each agreement or entry of a final decision in the case, including all appeals.2

The amended law also requires that in disclosing the above information, defendants (or their counsel) must, in accordance with CPLR 3122-b, provide an affidavit in the form of an affidavit or confirmation, where appropriate, stating that the information is accurate and complete and that reasonable efforts have been made to ensure that the information remains accurate and complete.

Although the amendments to the Act have removed many burdensome requirements, problems remain. Although employers should not disclose detailed information about previous lawsuits, lawsuits, and attorneys’ fees that have eroded or may undermine applicable policy constraints, they should still collect, calculate, track, and update relevant information on the erosion of any be a policy, as it will have to inform the claimants of the general limits available under each policy and certify under oath that the information disclosed is accurate.

How can employers prepare?

In addition to communicating with the lawyer at an early stage when serving a complaint, employers must understand the requirements of the Act and have relevant information readily available, as the Act requires a mandatory disclosure requirement within 90 days of the response.

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