New York Enacts Sweeping New Insurance Disclosure Requirements for State Court Litigants

Pillsbury Winthrop Shaw Pittman LLP


  • Defendants in New York state court must produce extensive insurance-related information within 60 days of answering the complaint (or, if an answer has already been filed, by March 1, 2022).
  • Prior to disclosure, the relevant insurance materials should be reviewed carefully for privileged and confidential information, and protective measures should be put in place.
  • The new disclosure requirements may be subject to further changes in the coming weeks.

Defendants in New York state court are now subject to some of the most extensive liability insurance disclosure requirements in the nation. On December 31, 2021, Governor Hochul signed into law, effective immediately, the Comprehensive Insurance Disclosure Act, amending New York Civil Practice Law & Rules (CPLR) § 3101(f) to require defendants in civil cases to disclose voluminous and potentially sensitive insurance materials, including applications for insurance policies and information concerning other claims. These new requirements create numerous pitfalls that could lead to the inadvertent disclosure of privileged claim-related information and confidential business information. They may also give rise to new tensions between insureds and their insurers and/or brokers. Defendants, and potential defendants, should scrutinize these changes with counsel and ensure that compliance with the new § 3101(f) does not unwittingly open the door to new insurance-related challenges.

For nearly 50 years, CPLR § 3101(f) provided only that “[a] party may obtain discovery of the existence and contents of any insurance agreement under which any person carrying on an insurance business may be liable to satisfy part or all of a judgment which may entered in the action[.]” The scope of this requirement, similar to Federal Rule of Civil Procedure 26(a)(1)(A)(iv), was construed narrowly as only requiring the production of policies, issued by traditional insurance companies, that would actually be triggered by a judgment in the action. Additionally, courts typically did not require the production of any insurance-related information beyond the policies themselves, unless such information was otherwise germane to the case.

The amendments to CPLR § 3101(f) are sweeping, and, importantly, require the defendant (or third-party defendant, or cross-claim or counter-claim defendant, as the case may be) to produce the specified information to the plaintiff and any other party in the action within 60 days of answering the complaint, or, in pending cases in which an answer has already been filed, by March 1, 2022. This automatic disclosure requirement applies to, among other things:

  • Complete copies of all primary, excess, and umbrella policies that may be liable to satisfy part of all of a judgment, including any issued by captive insurance entities, risk retention groups, reciprocal insurance exchanges, and syndicates;
  • Applications for such policies;
  • Contact information for the relevant claim adjuster(s) (including third-party administrators and insurance carrier personnel);
  • Information concerning policy limits available to satisfy a judgment in the action and the erosion of those limits, including information about any lawsuits that have eroded, or may erode, limits; and
  • The amount of any payment of attorneys’ fees that has eroded policy limits and the contact information of any attorney who received such payments.

Importantly, under CPLR § 3122-b, both the disclosing party and its attorneys must certify, i.e., submit a sworn affidavit, to the effect that that the insurance information is accurate and complete, and there is an ongoing obligation to ensure that the disclosures remain so. As under the old § 3101(f), disclosures under the rule are not automatically admissible in evidence at trial, consistent with the presumed purpose of the rule, which is to encourage settlement of tort cases.

While the New York Senate has stated that the purpose of these changes is to enable personal injury plaintiffs to timely obtain “complete and accurate information about the nature and extent of insurance coverage,” the new disclosure requirements apply in all civil cases. Recognizing the potential onerousness of these requirements, at the very same time Governor Hochul signed the amendments into law, she also requested that the legislature soften them. Among other things, it has been reported that the governor seeks to extend the compliance deadline from 60 days to 90 days; delete the requirement that insurance applications must be disclosed; and limit the disclosure of policies to only those that relate to the claim being litigated. But even with these changes, the requirements under § 3101(f) are expansive.

Here are some guiding principles for preparing to comply with the currently operative version of § 3101(f):

1. Gather Potentially Responsive Documents and Information and Consult with Coverage Counsel as Necessary

Compliance with § 3101(f) may require a great deal of diligence and, potentially, coverage analysis concerning other claims under relevant policies. This should be conducted with the assistance of counsel.

As an initial matter, insureds may not have ready access to complete copies of all policies, limits/erosion information, etc., and may have to seek the assistance of brokers and/or insurers. Defendants who are “additional insureds” under policies issued to other entities may face particular challenges in this regard. Similarly, it may prove difficult to obtain policies, applications, and information about other claims under historical occurrence-based policies relevant to certain types of “long tail” bodily injury and property damage claims such as environmental claims—this information could go back decades and may not exist in electronic form.

Additionally, various aspects of the new § 3101(f) leave room for interpretation. For example, the requirement to disclose “applications” arguably does not encompass underwriting questionnaires or inquiries outside the context of an application form. Most policy renewals also do not involve formal applications; underwriting correspondence that is part of the renewal process thus may not constitute an “application.” Similarly, the requirement to disclose “lawsuits” that have reduced policy limits arguably does not include other types of claims that may trigger coverage, such as government investigations, demands for mediation or arbitration, and other written demands. It is likely that these issues will be subject to further judicial guidance.

Be advised that defendants and their attorneys must submit a sworn affidavit certifying the accuracy and completeness of the insurance disclosures under § 3101(f). While it seems unfair to require an insured to certify the accuracy of information concerning, e.g., remaining policy limits—a matter that the insurer determines in the first instance and which may involve coverage determinations as to pending claims—that is the requirement. And it may not be enough to rely on an insurer’s or broker’s representation because the disclosing party’s “personal knowledge” is required. Insureds should therefore use this disclosure requirement as an opportunity to gain a full understanding of how claims have been treated under the relevant policy(ies) and whether any outstanding coverage disputes can be resolved. In some cases it may be necessary to conduct a coverage analysis of pending and/or anticipated claims to better understand the situation.

2. Review for Sensitive and/or Privileged Information and Implement Appropriate Protections

Insurance applications often contain proprietary business information, such as information about a company’s products, business strategies, the identities of customers and partners, and financial details. Premium-related information may also appear in policies and their applications. Beyond standard off-the-shelf policies, documentation pertaining to custom-designed captive insurance and risk retention programs, which is now subject to disclosure, may contain a company’s specific risk-related information that is not meant for public consumption.

Additionally, applications may contain legal discussion concerning pending or anticipated claims—information that is arguably protected by the attorney-client privilege and/or common interest privilege between an insured and a defending insurer. Likewise, information about other claims eroding policy limits can implicate confidentiality concerns, such as when a covered settlement is subject to a non-disclosure provision—settlement agreements in other claims must be carefully scrutinized for this issue. The obligation to disclose defense cost-related information and contact information for counsel can also give rise to privilege concerns. And a claim adjuster—especially when the insurer is defending claims under the policy—may possess privileged claim-related information. Applications and information pertaining to other claims may also contain sensitive details concerning other insureds who are not parties in the present litigation.

Prior to any disclosures, it is recommended that all such material be reviewed carefully for confidentiality and privilege issues, and that appropriate protective measures be implemented. For example, a protective order preventing or limiting the disclosure of privileged or confidential information may be sought; the parties in the litigation may stipulate to a confidentiality agreement; and documents may be redacted or withheld subject to a privilege log.

3. Manage Relationships with Brokers and Insurers

Insureds should ensure that their brokers and/or insurers continue to maintain the confidentiality of sensitive and privileged information to the extent permitted by applicable law. On a going-forward basis, New York insureds may be able to request a form of application that minimizes the need to provide sensitive information that could ultimately be turned over to an adverse party in litigation.

An unintended consequence of these new disclosure requirements may also be that, if information relating to available limits and other claim settlements becomes public, competing claimants may be incentivized to try to tap the remaining coverage by more aggressively pursuing their claims and/or instituting new ones. Insurers may also be spurred to move more quickly to investigate other pending claims and issue coverage determinations, or alternatively, they may delay such activity to see how the claims environment plays out. Insureds should work with their brokers and carriers (as well as defense counsel) to plan for these eventualities.

It remains to be seen how such disclosure requirements could impact premium pricing and claims handling for New York insureds.

The scope of liability insurance disclosure requirements under CPLR § 3101(f) is apparently still in flux, and regardless of the final form of the amendments, it will be subject to judicial interpretation. Insureds who are current or potential defendants in New York state court should be attuned to the burden and risks involved in complying with such requirements with the assistance of knowledgeable defense and insurance counsel.

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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