The New York State Comprehensive Insurance Disclosure Act is now in effect. The Act amends CPLR 3101(f), governing disclosure of insurance policy information by defendants and similarly situated parties such as third-party and cross-claim defendants. The Act adds detail, makes disclosure automatic, and imposes a client certification requirement. The Act may lead to intrusive demands on tort defendants to produce sensitive information and documents related to their insurance policies, but a careful reading indicates defendants’ obligations should not have changed dramatically.
CPLR 3101 governs the scope of disclosure in civil lawsuits. Former subparagraph (f) made discoverable the “existence and contents” of insurance policies covering a party in relation to a lawsuit. The provision expressly excluded any “application for insurance.” Under the former provision, such disclosure occurred in response to a demand or pursuant to the court’s order governing discovery, such as the preliminary conference order. A defendant might identify the carrier, policy number, limits, and effective dates, and/or provide the declarations page. Disclosing such information/materials for excess policies could also be required in actions where damages might exceed the primary policy’s limits. Parties did not typically insist on disclosure of further information and documents, such as the actual policy or policies, except in disputes where the full contents might be directly at issue (e.g, cross-claims for breach of contract to obtain insurance).
Under amended 3101(f)(1), a defendant’s obligation to provide “notice and proof of the existence and contents” of insurance policies is automatic and must occur within 60 days of serving the answer (or within 60 days of the amendment’s effective date in pending actions). “Information and documentation” pursuant to 3101(f)(1) “shall include”:
- “All” primary, excess, and umbrella policies
- Complete copies of the policies
- The contact information (including phone number and email address) of insurance representatives/adjusters and third-party administrator representatives
- The policy limits (or residual limits if applicable)
- Any lawsuits that have reduced/eroded, or that may reduce/erode the limits, including the caption, date of filing, and identity/contact information of the parties; and
- The amount, if any, of attorney fees that have reduced/eroded the limits, and the identity/address of any attorney receiving such fees
Whereas former 3101(f) expressly excluded any “application for insurance,” they are now expressly defined to be part of insurance policies. The obligation to disclose updated insurance information is ongoing and continues for 60 days after settlement or entry of final judgment; updated disclosure must occur within 30 days of receipt of new information. The Act also adds new CPLR section 3122-b, which requires the defendant (i.e., the party) and counsel to certify the information provided pursuant to 3101(f) is accurate and complete, and that reasonable efforts to ensure accuracy and completeness have been and will be taken on an ongoing basis.
Defendants are accustomed to disclosing the existence of policies implicated by the lawsuit (and refraining from disclosing excess/umbrella policies if they are unlikely to be implicated), policy limits, declarations pages, and insurance representative contact information (the latter in the context of pre-trial and settlement conferences). An automatic obligation to disclose “all” excess and umbrella policies, the policies themselves, residual limits, the existence of lawsuits that have eroded or could erode the limits, and the amount of attorney fees that have eroded limits would be new and potentially onerous.
However, while the language states “information and documentation” under the Act includes the above, it does not expressly equate “information and documentation” with the “notice and proof of the existence and contents” of policies that must be disclosed automatically. The language also does not state such “information and documentation” must be disclosed in all cases, or give the circumstances in which some or all of it must be disclosed. Therefore, such disclosure arguably remains restricted by CPLR 3101(a) to that which is “material and necessary in the prosecution or defense of an action.” The sponsor memorandum (State Sen. Andrew Gounardes, representing the 22nd District) supports this interpretation, stating that the law requires defendants to disclose “information” about policies “through which a judgment could be satisfied” or that are “implicated by the claim.” Governor Hochul’s approval memorandum is also supportive: “I ... have reached an agreement with the Legislature to ensure that the scope of the insurance coverage information that parties must provide is properly tailored for the intended purpose, which is to insure that parties in a litigation are correctly informed about the limits of potential insurance coverage.”
At the inception of suits, promptly in all pending litigation and periodically thereafter, defendants, counsel, and insurance representatives should discuss the identity and contents of insurance policies and develop a strategy for their disclosure. While disclosure of all “information and documentation” enumerated in the amendment to CPLR 3101(f) should not be required in all cases, that which is “material and necessary” in defense of the action will be.
