In my last blog, we explored the onerous changes made by the New York State Legislature to the Defendant’s obligation to provide disclosure regarding available insurance. Entitled the Comprehensive Insurance Disclosure Act, the law made wholesale changes to CPLR 3101(f)’s insurance disclosure requirements and went into immediate effect upon the bill’s signing by Governor Hochul on December 31, 2021.

In summary, the Act requires defendants to provide a complete copy of all insurance policies that “may be liable to satisfy part or all of a judgment” and, once the policy is identified, then requires disclosure of the policy’s application; information on the policy’s erosion (if any) by prior payments of claims, settlements and/or attorneys’ fees; and the identity of the claims handler or third-party administrator. The Act expressly applies to pending cases, requires compliance within 60 days, and requires that the disclosure be updated on a regular basis. All disclosure must be certified as complete and accurate by counsel and the Defendant.

As stated in my last blog post, the Act imposes a “mind-blowing exercise in data collection and mathematics” and its problems and associated advantages to plaintiffs in New York “are limited only by one’s imagination.”

The blowback against the Act has been swift and certain. Now, I am pleased to report that legislative efforts already are under way that would, if enacted, make major changes to the Act and soften the law’s reach and scope.

Under New York State Senate bill 7882 in its current form, the Act would be amended to:

• Apply the Act’s rules to newly filed cases only (i.e., no retroactive effect on pending cases)

• Require compliance within 90 days of filing an Answer (instead of the 60-day rule)

• Require disclosure of only a copy of the policy or, if the Plaintiff is in agreement, only its Declaration Page

• Require disclosure of a full copy of all primary, excess and umbrella policies, but only “insofar as such documents relate to the claim being litigated”

• Require disclosure of the total amounts left in the policy(ies) after erosion

• Require disclosure of only the name and e-mail of an “assigned individual” and/or adjuster/TPA (phone number no longer needs to be disclosed)

• Require only a duty on the party to make “reasonable efforts” to ensure that the disclosure is accurate and complete, but requires updates to the information at the filing of the Note of Issue, before mediation or settlement conferences and at trial call

• Exempt automobile No-Fault and Personal Injury Protection (PIP) policies.

Most significantly, and as currently written, the proposed amendments remove any obligation on the part of the Defendant to provide detailed information regarding prior lawsuits, claims and payments of attorneys’ fees that may have eroded the policy’s limits. Also, the application for insurance need not be disclosed under the proposed amendments.

The amendment’s use of the phrase “insofar as such documents relate to the claim being litigated” is particularly noteworthy. Does the language limit the breadth and scope of the required disclosure? Only time, and case law, will tell.

The proposed amendments are not perfect and the Act would retain onerous provisions. For example, although detailed information about prior lawsuits and claims need not be provided, information about any policy’s previous erosion still must be located, gathered and calculated by the party and its insurer, and the information must be continuously tracked and updated going forward. Moreover, as far as I can tell, the proposed amendments do not avoid the newly created CPLR 3122-b and its requirement that the party and its counsel certify compliance with the Act’s requirements.

Nevertheless, simply changing the Act’s reach to exempt existing cases would alone lessen its immediate burden and allow time for insurers to gather information about erosion on its policies so they will be ready to assist in formulating its insured’s response.

New York State Senate bill 7882 is currently before the New York State Senate Rules Committee. We will watch the bill’s progress and report back with updates to our followers in future postings.