On February 24, 2022, the Governor of New York signed into law amendments to the December 31, 2021, enacted Comprehensive Insurance Disclosure Act (CIDA), which amendments eliminate several requirements that were unfavorable, if not burdensome, to insurers and defendants under the revised New York Civil Practice Law and Rules (CPLR) §3101(f). 

The Act mandates disclosure of applicable insurance policies that may be liable to satisfy all or part of a judgment and information about the “total limits” available under the policies, after accounting for any erosion of available policy limits. In addition, new CPLR §3122-b requires written certification of the disclosures by counsel of record and the named client/party. Lastly, the new disclosure rules require that the information be updated at specified trigger points during the litigation. 

This mandatory disclosure must be done in all new matters (lawsuits commenced after December 31, 2021) and within 90 days of filing an Answer. Litigants should anticipate discovery Orders and discovery demands seeking disclosure aligned with the “new” Rules. 

The Two New Rules

CPLR §3101(f) (as amended):
(f) Contents of insurance agreement. 

1. No later than ninety days after service of an answer pursuant to rule three hundred twenty or section three thousand eleven or three thousand nineteen of this chapter, any defendant, third-party defendant, or defendant on a cross-claim or counter-claim shall provide to the plaintiff, third-party plaintiff, plaintiff on counter-claim, and any other party in the action proof of the existence and contents of any insurance agreement in the form of a copy of the insurance policy in place at the time of the loss or, if agreed to by such plaintiff or party in writing, in the form of a declaration page, under which any person or entity may be liable to satisfy part or all of a judgment that may be entered in the action or to indemnify or reimburse for payments made to satisfy the entry of final judgment. A plaintiff or party who agrees to accept a declaration page in lieu of a copy of any insurance policy does not waive the right to receive any other information required to be provided under this subdivision, and may revoke such agreement at any time, and upon notice to an applicable defendant of such revocation, shall be provided with the full copy of the insurance policy in place at the time of the loss. Information and documentation, as evidenced in the form of a copy of the insurance policy in place at the time of the loss or the declaration page, pursuant to this subdivision shall include: 

   • (i) all primary, excess and umbrella policies, contracts or agreements issued by private or publicly traded stock companies, mutual insurance companies, captive insurance entities, risk retention groups, reciprocal insurance exchanges, syndicates, including, but not limited to, Lloyd's Underwriters as defined in section six thousand one hundred sixteen of the insurance law, surplus line insurers and self-insurance programs insofar as such documents relate to the claim being litigated; 

   • (ii) if the insurance policy in place is provided, a complete copy of any policy, contract or agreement under which any person or entity may be liable to satisfy part or all of a judgment that may be entered in the action or to indemnify or reimburse for payments made to satisfy the entry of final judgment as referred to in this paragraph, including, but not limited to, declarations, insuring agreements, conditions, exclusions, endorsements, and similar provisions; 

   • (iii) the contact information, including the name and e-mail address, of an assigned individual responsible for adjusting the claim at issue; and 

   • (iv) the total limits available under any policy, contract or agreement, which shall mean the actual funds, after taking into account erosion and any other offsets, that can be used to satisfy a judgment described in this subdivision or to reimburse for payments made to satisfy the judgment. 

2.  A defendant, third-party defendant, or defendant on a cross-claim or counter-claim required to produce to a plaintiff or third-party plaintiff or plaintiff on a counter-claim all information set forth in paragraph one of this subdivision must make reasonable efforts to ensure that the information remains accurate and complete, and provide updated information to any party to whom this information has been provided at the filing of the note of issue, when entering into any formal settlement negotiations conducted or supervised by the court, at a voluntary mediation, and when the case is called for trial, and for sixty days after any settlement or entry of final judgment in the case inclusive of all appeals. 

3.  For purposes of this subdivision, an application for insurance shall not be treated as part of an insurance agreement. Disclosure of policy limits under this section shall not constitute an admission that an alleged injury or damage is covered by the policy. 

4. Information concerning the insurance agreement is not by reason of disclosure admissible in evidence at trial. 

5. The requirements of this subdivision shall not apply to actions brought to recover motor vehicle insurance personal injury protection benefits under article fifty-one of the insurance law or regulation sixty-eight of title eleven of the New York codes, rules and regulations

CPLR §3122-b. Certification of Insurance Disclosure:

Information provided pursuant to subdivision (f) of section thirty-one hundred one of this article shall be accompanied by a certification by the defendant, third-party defendant, or defendant on a cross-claim or counter-claim and a certification by any attorney appearing for the defendant, third-party defendant, or defendant on a cross-claim or counter-claim, sworn in the form of an affidavit or affirmation where appropriate, stating that the information is accurate and complete, and that reasonable efforts have been undertaken, and in accordance with paragraph two of subdivision (f) of section thirty-one hundred one of this article will be undertaken, to ensure that this information remains accurate and complete.

What Specifically Is Required?

CIDA, as amended, modifies CPLR  §3101(f) to mandate that the following items to be disclosed within 90 days of filing an Answer for all matters commenced after its enactment (i.e., December 31, 2021):

• All primary, excess and umbrella policies that may be liable to satisfy part or all of a judgment shall be disclosed

• A complete copy of all identified policies (including declarations, endorsements and exclusions)

• The contact information (name, email address) of the matter’s adjuster(s)

• The “total limits” amounts still available under the insurance policy to satisfy, or reimburse for, a judgment, which means “the actual funds after taking into account erosion and other offsets.” 

NOTE: A plaintiff can agree in writing to accept a Declarations Page of a policy in lieu of the entire policy, but in doing so does not waive the right to later receive any other information required under the statute. 

The law also provides:

• The new obligations apply to any defendant, third-party defendant or defendant on a cross-claim or counter-claim

• These requirements do not apply to No Fault claims

• The disclosure required is not an admission that the alleged damages or injuries are covered by the disclosed policy(ies)

• The new statute requires that the defendant must make “reasonable efforts” to ensure that the information remains accurate and complete by providing “updated information at the filing of the Note of Issue, when entering into formal settlement negotiations conducted or supervised by the Court, at a voluntary mediation, and when the case is called for trial”

• The above “ongoing” obligations exist during the entire pendency of the litigation and for 60 days after any settlement or entry of final judgment, including any appeal. 

Under the newly created §3122-b of the CPLR, disclosure under the Act must be accompanied by two forms of “certification”: one in the form of an affidavit from the named party defendant and one from the defendant’s attorney in the form of an affirmation. 

Which Policy(ies) Should Be Identified?

CIDA, as amended, requires disclosure of any and all policies that “may be liable to satisfy part or all of a judgment that may be entered …” (italics added). As it stands, the term “may” is arguably up for interpretation: some may read “may” to require disclosure of each and every policy of insurance in place and available to the insured/client, including all excess and umbrella policies, regardless of the nature of the underlying case and its perceived “value.” Others could read “may” to allow for disclosure of only those policies reasonably at risk, given a reasonable estimation of the case’s value. 

There is, of course, no case law, regulations or learned commentary about the scope and breadth of the new disclosure rules and their requirements. Practitioners have only the statute to guide them. Ultimately, the decision of what policy or policies to disclose should be a collaborative effort among defense counsel, the client/insured, the claims handler or third-party administrator, and the insurer. 

Insurer Obligations

Notably, CIDA, as amended, does not specifically require anything of an insurer. It is directed to the named party and its counsel. Nonetheless, claims examiners will need to be informed of the efforts that must be taken, the impact on budgeting and anticipated increase in UTBMS L310 expense, and where they will be asked (if not “required” by their insureds) to assist, such as: 

a. Defense counsel will request of the claims professional everything listed in §3101(f), including:

i. Insured points of contact beyond substantive witnesses;

ii. Efforts to identify and secure points of contact for the entire tower of insurance coverage, which primary-level claims professionals and TPAs typically may not have at their fingertips;

iii. Efforts to secure copies of the policies throughout the entire tower of coverage;
 

iv. Details as to total limits, and available limits and any erosion of the aggregate limits as identified in §3101(f); and
 

iv. The measures in place to provide updates as to available limits as identified in §3101(f). 

b. Insureds will look to claims examiners to assist them in gathering, compiling and tracking. The insured and defense counsel may need to specify their reliance on the input received from claims examiners. The rules require an affidavit from the defendant party (not a claims examiner) and affirmation from the defense counsel. So, anyone that seeks an affidavit of the claims examiner is not, in and of itself, going to comply with the rule. Still, that doesn’t mean an insured or defense counsel will not seek one as part of their respective efforts to swear to the extent, exhaustion and accuracy of their effort and disclosure as part of their affidavit/affirmation. Insureds and third-party claim defense counsel are not positioned to factually opine on all of the disclosure requirements. 

c. Anticipate an influx of direct communications from plaintiffs’ attorneys, since the claims examiners’ names and contact information are part of the required disclosure.