February 1, 2022
Summary:
On December 31, 2021, Governor Kathy Hochul signed the Comprehensive Insurance Disclosure Act (“Act”) into law. The Act expands the detailed disclosures regarding insurance information that a defendant in a civil lawsuit must make within 60 days of serving its answer. The Act also requires the defendant to certify that the information provided is accurate and complete and to promptly supplement and update disclosures during the litigation and for 60 days after the litigation terminates. These obligations also apply to counter-claim and cross-claim defendants.
The Act creates these disclosure requirements for civil cases commenced after the date of enactment (December 31, 2021), but also applies retroactively to all pending actions. The information required under the Act for cases pending as of December 31, 2021 must be provided within 60 days after the Act became effective—by March 1, 2022.1
The Full Story:
The Act
The Act requires that any defendant (including third-party defendants) in New York state civil lawsuits make detailed insurance coverage disclosures and produce documents 60 days after serving an answer, or for pending cases in which an answer has been filed, by March 1, 2022. Defendants must disclose:
The Act also imposes additional obligations on defendant insureds including:
The Consequences
There are a number of ambiguities surrounding the Act, including the consequence for failing to comply. In addition, the Act does not account for the confidential and sensitive nature of information included in insurance applications. Nor does the Act account for the difficulty of accurately making disclosures related to coverage available under applicable policies where insurers have issued coverage positions or reservations of rights letters that impact coverage.
1 The New York State Senate has passed a bill that would make the Act no longer retroactive and would eliminate certain disclosure obligations. It is currently pending in the State Assembly.