On December 31, 2021, Kathy Hochul, Governor of New York, signed the Comprehensive Insurance Disclosure Act (the Act) into law. The Act was implemented to prevent defense counsel from using "delaying tactics," and to compel the disclosure of primary, excess, and umbrella policies related to a claim or lawsuit. The changes put in place by the act will have extensive implications for defense counsel and insurance companies alike.
Under the Act, defendants have an affirmative duty to provide a complete response, and have an ongoing obligation to ensure that the information contained in its disclosure remains accurate. An update is required within 30 days after a party or its attorney receives information that renders the prior disclosure inaccurate or incomplete. This obligation continues during the entire course of litigation, and for 60 days after a settlement or entry of a final judgment.
The defendants must provide the caption, filing date, and identity and contact information of counsel for any other lawsuit that has or may erode the policy limits, and the amount of attorneys' fees that have reduced or eroded the limits of the policy along with the contact information of any attorney who received fees.
Defendants must identify and provide contact information for anyone responsible for adjusting the claim, including third-party administrators and individuals at the insurance company to whom the TPA reports.
The response must be certified by the defendant and its attorney pursuant to a newly created section of the CPLR, 3122-B.
While the Act has been signed into law, and is in full force and effect, Governor Hochul has proposed some amendments to the Act. Carriers and defense counsel must now be prepared to provide disclosures pursuant to the Act.
Editor's Note: This new law places an emmense burden on the defense. Many parts of the Act increase the workload of the defense team, including identifying all applicable insurance policies and accurately calculating erosion will likely take a massive amount of legwork, particularly in cases where claims have been paid over many years.