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New York’s 2022 Comprehensive Insurance Disclosure Act imposes sweeping changes to defendant insurance disclosure requirements

1/28/22

By: Paul Piantino III, Esq., Kaitlyn Grajek, Esq. and Julia Bover, Esq.

On December 31, 2021, New York Governor Kathy Hochul signed into law the Comprehensive Insurance Disclosure Act, (the “Act”).  It takes effect immediately and applies to all pending civil actions in the State of New York.  The Act amends CPLR 3101(f), a discovery rule governing disclosure of insurance policy information by defendants (including third-party and cross-claim defendants), and significantly expands defendants’ disclosure obligations.   

Defendants should take note of the Act as it represents a sweeping change to CPLR 3101(f)’s previous disclosure requirements.  In its prior form, CPLR 3101(f) merely made the existence and contents of insurance agreements covering part or all of a prospective judgment discoverable.  Additionally, before the amendments imposed by the Act, CPLR 3101(f) expressly excluded insurance applications.   

However, with the Act’s enactment, defendants are now required to disclose, within sixty (60) days of filing an answer, the following information: 

• all primary, excess and umbrella insurance policies;
• complete copies of all insurance policies, including, but not limited to: declarations, insuring agreements, conditions, exclusions, endorsements and similar provisions; 
• insurance applications; 
• the contact information, including phone number(s) and email address(es), of insurance adjusters and third-party administrators; 
• the amounts available under each applicable policy; 
• any lawsuits that have reduced or eroded the applicable policy limit, or that may reduce or erode the limits of each policy, including the caption of such lawsuit(s), date(s) of filing same, as well as the identity and contact information for all represented parties therein; and
• the amount, if any, of all attorney fee payments that have eroded or reduced the value of the policy limits, including the name and address of any attorney who received such payment(s). 

These requirements touch upon many issues which must be flushed out in the days ahead.  While the information disclosed will not necessarily be admissible in evidence at trial, the onerous implications of these new obligations are apparent.  The information now mandated for disclosure could contain confidential information, implicate privacy concerns, and prospectively violate the attorney-client and work product privileges.  For instance, in order to provide insurance applications, it may be necessary to obtain the underwriting file(s) where a policy was placed by a managing agent or binding agent.  Further, by having to disclose attorney information relative to other indemnity payments or defense costs, a claimant’s counsel may be alerted to same or similar claims which will no doubt result in collaboration between the current lawsuit counsel and other counsel in similar, but resolved, lawsuits.  Ostensibly, having to provide adjuster contact information could open the door to discussions between claimants’ counsel and adjusters, which could spill into topics other than insurance information details.  The conversation may expand, thereby infringing on the attorney-client relationship if done unintentionally or unwittingly by either party.  Finally, with access to full copies of policies replete with all endorsements and terms, claimants may now be more likely, and empowered, to commence coverage actions than with the prior limited insurance discovery allowed.  The above are just a few potential issues which may spawn from this legislation.  However, it is clear that these burdensome new disclosure requirements will undoubtedly place defendants at a significant strategic disadvantage in litigating and resolving New York civil lawsuits.   

Because the Act takes effect immediately, defendants in pending lawsuits are obligated to serve the foregoing information within sixty (60) days of the amendment’s effective date, or March 1, 2022.  These affirmative disclosure requirements are ongoing such that defendants throughout a case must provide updated information where applicable.  Additionally, the Act requires that both defendant(s) and their respective attorney(s) certify that the information provided is correct and complete.   

The Act applies to all policies at issue in litigation including self-insurance programs sold or delivered within the state of New York. In addition, on its face, the Act does not expressly impose disclosure requirements directly upon insurance carriers.  It also does not specify consequences for violating any disclosure obligation set forth therein.   

Likely in response to anticipated issues stemming from these sweeping changes, Governor Hochul has redlined the Act, proposing the following revisions: 

• protecting policy applications from disclosure; 
• extending the deadline to provide the now-required information from sixty (60) days to ninety (90) days; and 
• limiting disclosure under the Act to policies that relate to the claim being litigated. 

If New York State Legislators vote in favor of Governor Hochul’s proposed changes, the burden on defendants will be decreased, but not eradicated.  Defendants engaged in future or pending litigation should take note of the intrusive and broad disclosure requirements currently effective in New York and prepare for the arduous administrative responsibilities that will accompany compliance with the new Act.  

FMG is monitoring all updates relevant to the Act and counseling clients to ensure compliance therewith by the March 1, 2022 deadline.  If you have any questions, or would like more information, please contact Paul Piantino III, Esq. at ppiantino@fmglaw.com, Kaitlyn Grajek, Esq. at kaitlyn.grajek@fmglaw.com and Julia Bover, Esq. at julia.bover@fmglaw.com.