New Amendments to the New York Comprehensive Insurance Disclosure Act Alleviate Some of the Act’s More Burdensome Requirements

March 8, 2022

On February 24, 2022, New York Governor Kathy Hochul signed into law an amended version of the Comprehensive Insurance Disclosure Act (the “Act”). These amendments, which were effective immediately, limit the Act’s significant expansion of parties’ obligations to disclose insurance-related information in New York state court lawsuits. For more information on the original Act and its expanded disclosure obligations, please see our prior client alert dated February 10, 2022.

The Amended Provisions of the Comprehensive Insurance Disclosure Act

Some of the original provisions of the Act, which significantly expanded the insurance disclosure obligations of New York litigants pursuant to Section 3101(f) of the CPLR, have now been substantially scaled back, including:

The expanded disclosure requirements only apply to lawsuits commenced on or after December 31, 2021, whereas the prior version of the Act would have applied to any pending or future action in New York state court.

For actions filed on or after December 31, 2021, the insurance disclosures are required within 90 days of service of an answer. For example, if an action was filed on December 31, 2021 and the defendant served its answer on the same day, then the defendant must comply with the Act by March 31, 2022.

The expanded obligation to disclose insurance information now only applies if the information at issue “relates to the claim being litigated.”

As part of their insurance disclosure obligations, litigants must now disclose the name and email address of a single “assigned individual responsible for adjusting the claim at issue.”

The amendments eliminate the onerous requirement from the original version of the Act that would have mandated disclosure of “any lawsuits that have eroded or may reduce or erode” the available policy limits. Likewise, the amendments to the Act also eliminate the obligation to disclose the amount of any payment of attorney’s fees that have eroded or reduced the face value of the policy. Now, litigants must continue to monitor any changes in the amount of remaining actual funds available under the polic(ies) but need only to disclose at the mandated disclosure dates (see point directly below).

Under the amended version of the Act, a party “must make reasonable efforts to ensure” that the disclosure information “remains accurate and complete.” And, unlike the original version of the Act, which required parties to provide supplemental insurance disclosures on an ongoing basis throughout the course of a litigation, the amendments only require updated disclosures at the time of (1) the filing of the note of issue; (2) the entering into any formal settlement negotiations conducted or supervised by the court; (3) a voluntary mediation; (4) when the case is called for trial; and (5) 60 days after any settlement or entry of final judgment.

The amendments eliminate language in the original version of the Act stating that the application for insurance is considered to be a part of the insurance agreement. Under the amendments, an insurance application need not be produced as part of the insurance disclosures under CPLR 3101(f).

Notably, the amendments to the Act do appear to expand one aspect of the original version of the statute. Specifically, while the original version of the Act limited its application to insurance policies “sold or delivered within the state of New York,” the amended statute contains no such limitation. Furthermore, the amended statute also leaves intact CPLR 3122-b, a newly created provision set forth in the original Act, requiring that any insurance information disclosed must be accompanied by a certification of completeness and accuracy by the disclosing party, as well as a certification by any attorney appearing in the action for such party.

In summary, the Comprehensive Insurance Disclosure Act, as amended, still places more substantial insurance-related disclosure burdens upon New York litigants than was the case prior to December 31, 2021. Nevertheless, some of the most onerous requirements from the original Act have been alleviated by the passage of the recent amendments.

Parties to any New York actions commenced on or after December 31, 2021, as well as their attorneys and insurers, if applicable, should carefully review the Act, as amended, to ensure that they understand and are able to comply with their insurance disclosure obligations.

If you have any questions about this Alert, please contact any member of the Insurance Group below.

A nthony J. Zarillo, Jr.

Tracey K. Wishert

M ichael J. Rossignol

Maura C. Smith

Jeffrey M. Beyer

Peter M. Perkowski, Jr.

Caroline Brizzolara