On December 31, 2021, New York State enacted the Comprehensive Insurance Disclosure Act (“CIDA”). The stated purpose of the Act is to ensure that parties in a litigation are correctly informed about the limits of potential insurance coverage. The burden on defense counsel and the insurer to provide complete and accurate insurance information is an onerous one. Nevertheless, legislative efforts are underway to narrow the scope of the requirements. The amendments to the current law were passed in the New York State Legislature and were delivered to Governor Kathy Hochul on February 24, 2022.
CIDA amends CPLR § 3101(f) to mandate the disclosure of: 1) all primary and excess insurance policies and the application of insurance within 60 days of serving an Answer; 2) information regarding any lawsuits and attorneys’ fees that have reduced or eroded, or may reduce or erode, such amounts available under any policy; and 3) contact information of any person responsible for adjusting the claim, including third-party administrators.
The disclosure obligations are ongoing throughout the pendency of the litigation and continue for 60 days after entry of final judgment or voluntary settlement. The information provided must be certified by both the policyholder and their attorney. This new requirement applies to all pending litigation beginning March 1, 2022
If the proposed Amendments are signed into law by the Governor, CPLR § 3101(f) would require 1) the disclosure of copies of the policies related to the litigated claim within 90 days of serving an Answer for those cases commenced on or after December 31, 2021; and 2) updated insurance disclosures at the filing of the Note of Issue, when engaging in court-conducted or supervised settlement negotiations, at mediation, and when the case is called for trial. Insurance applications would be exempt from disclosure. Certifications by defense counsel and the policyholder would still be required.
The Governor has 10 days to sign or veto the bill passed by both houses. We will provide an update once the Governor takes any action. If you have any questions, or would like more information, please contact Lorin A. Donnelly, Esq. at (516) 870-1123 or firstname.lastname@example.org.