Following the enactment of the Comprehensive Insurance Disclosure Act on December 31, 2021, which expanded the scope of disclosure of insurance information by defendants and their counsel, New York has now passed significant amendments to the Act which limit the scope of disclosure and reduce the burdens imposed on defendants and their counsel. The amendment was signed by Governor Hochul today and is effective immediately.
First, the amendment changes the timing for disclosure of insurance information. Rather than sixty (60) days after interposing an answer to a complaint, a defendant now has ninety (90) days to provide the disclosure. Moreover, a defendant no longer has an ongoing obligation to update the insurance disclosure, and need only update the disclosure at the time of filing of the note of issue, when entering into any formal settlement negotiations conducted or supervised by the court, at a voluntary mediation, and when the case is called for trial. This vastly reduces the burden imposed on defendants and no longer requires near-constant updating of the disclosure throughout the course of a litigation.
Second, the amendment provides that the disclosure can be satisfied through production of a copy of the applicable insurance policy(ies) or, if a plaintiff’s counsel agrees in writing, a copy of the declaration page(s). However, a plaintiff does not waive their entitlement to a copy of the entire policy(ies) by agreeing to accept a copy of the declaration page(s) and can revoke this agreement at any time. Upon notice of such revocation by a plaintiff, a defendant must produce a copy of the applicable policy(ies). Additionally, the amendment states that an application for insurance is not considered part of an insurance agreement and is not subject to disclosure. This is a complete reversal from the language in the original Act.
Third, the amendment adds language clarifying that the policy(ies) that must be disclosed under the Act include only those that “relate to the claim being litigated.” This has eliminated some uncertainty for defendants based on the original act as to the scope of what policy(ies) must be disclosed.
Fourth, the amendment limits what information must be disclosed. A defendant need not disclose the telephone number of the individual responsible for adjusting the claim, or the contact information for third party administrators as well as insurance carrier representatives responsible for adjusting the claim. Now, only the name and email address of an “assigned individual responsible for adjusting the claim at issue” need be disclosed. Further, a defendant now need only disclose the total amount available under the policy, meaning the actual funds, after taking into account erosion and other offsets, that can be available to satisfy a judgment. The original Act required disclosure of any other lawsuits that have eroded the total amount available under the policy, contact information for the attorneys representing the parties in other lawsuits, and the amount of attorneys’ fees that have eroded the policy together with the contact information for the attorneys receiving such payments. As previously discussed, this potentially impacts attorney-client privilege concerns and could pose an undue burden on a defendant and their counsel. The amendment no longer requires disclosure of this extensive information.
Fifth, and perhaps most notably, the amendment revised the Act such that it is applicable only to actions that are commenced on or after the effective date (i.e., on or after December 31, 2021). The original Act required disclosure in all pending actions within sixty (60) days of the effective date, and the possibility of amendments coupled with the looming deadline created some uncertainty for defendants and their counsel. Lastly, the amendment states that the Act does not apply to actions brought to recover motor vehicle insurance personal injury protection benefits.
Despite the significant amendments, the Act still expands the scope of disclosure of insurance information in New York. Gordon & Rees maintains four offices in New York State with 150 attorneys. Our attorneys have drafted the certifications required by the new New York Civil Practice Law and Rules ("CPLR") sections and are prepared to assist our clients with navigating the changes required by the Act, including any further changes or interpretations that may come at the legislative or judiciary level. Please contact the authors of this article for any assistance in this regard.