Understanding New York’s New Insurance Disclosure Requirements for Civil Defendants

Understanding New York’s New Insurance Disclosure Requirements for Civil Defendants

New York litigants must disclose information about available insurance coverage under a new law known as the Comprehensive Insurance Disclosure Act (CIDA or the Act), which took effect on December 31, 2021. However, in response to concerns about the compliance burdens placed on civil defendants, the new law has already been amended to remove some of its most onerous requirements.

Comprehensive Insurance Disclosure Act

As initially enacted, CIDA amended New York Civil Practice Law and Rules (CPLR) section 3101(f) to require civil defendants in New York Courts to provide a complete copy of all insurance policies that “may be liable to satisfy part or all of a judgment.” Initially, CIDA’s disclosure requirements applied to all pending cases as of its effective date.

The Act also mandated the disclosure of the policies’ application, as well as information about the policies’ erosion (if any) by prior payments of claims, settlements and/or attorneys’ fees. Defendants were also required to provide information regarding the identity of the claims handler or third-party administrator. As originally enacted, the CIDA required disclosures be provided within 60 days of service of an answer to a complaint. It also mandated that defendants update their insurance disclosures regularly. 

Amendments Under Senate Bill S7882A 

Even before the CIDA became law, lawmakers were having discussions about possible amendments aimed at reducing the burden on defendants. On February 24, 2022, Gov. Kathy Hochul signed amendments into law. Below are several key changes under Senate Bill S7882A:

• The Act no longer applies retroactively. Rather, the disclosure obligations only apply to actions filed on or after December 31, 2021.
• The deadline to make required disclosures is 90 days rather than 60.
• If the plaintiff consents, defendants may provide only the declaration pages of applicable policies, rather than copies of policies in their entirety. Plaintiffs may later elect to request full copies.
• Applications for insurance need not be disclosed.
• Policies requiring disclosure is restricted to only to those that “relate to the claim being litigated.”
• The obligation to disclose the contact information of claims handlers is lessened to require the name and email address of the claims handler. Information for third-party administrators is no longer required.
• Defendants are no longer obligated to disclose any lawsuits that have or may reduce applicable policy limits, or any attorneys’ fees that have reduced such limits. Rather, the amended Act requires the disclosure of total limits available under any disclosed policy, taking into account any erosion and offsets. The Act expressly provides that the disclosure of policy limits does not constitute an admission that the alleged injury or damage is covered under the policy.
• The obligation to regularly update plaintiffs with new information within 30 days of receipt was amended to now require updates in the following circumstances: when the “note of issue” is filed signaling the case is ready for trial; when entering into formal settlement negotiations; at voluntary mediation; and when the case is called for trial.

While the amendments are favorable to defendants, CIDA represents a significant change in insurance disclosure obligations for New York litigants. We encourage businesses and their counsel to familiarize themselves with the new requirements.

If you have questions, please contact us

If you have any questions or if you would like to discuss the matter further, please contact me, Ajoe Abraham, or the Scarinci Hollenbeck attorney with whom you work, at 201-896-4100.