On February 25, 2022, New York Gov. Kathy Hochul signed into law amendments that relieve some of the most stringent insurance disclosure obligations for defendants under the December 2021 Comprehensive Insurance Disclosure Act (CIDA).
CIDA, signed into law on December 31, 2021, significantly expanded the scope of defendant’s insurance disclosure obligations under CPLR 3101(f). CIDA imposed a host of new disclosure obligations on defendants and defense counsel. Among other things, CIDA mandated disclosure of all primary, excess, and umbrella insurance policies that may be used to satisfy a judgment in the action, information related to lawsuits and payment of attorney’s fees that have eroded policy limits for those policies (including the identities of parties and attorneys that received such payments), and insurance policy applications. CIDA also required both defense counsel and defendants to continually certify that such disclosures are accurate and complete.
Perhaps most importantly for practitioners, CIDA’s insurance disclosure obligations are self-executing. Defendants must disclose covered insurance information regardless of whether plaintiffs ask for it. In addition, CIDA applied retroactively to pending lawsuits. For pending lawsuits, defendants were required to comply by March 1, 2022.
CIDA’s onerous requirements were met with significant and immediate pushback by insurer and practitioners. As soon as it passed, the New York Legislature began working on amendments to narrow some of its strictest disclosure requirements.
The amendments that Governor Hochul signed into law addressed some of concerns of the insurance industry. The amendments received near unanimous support of the New York Legislature.
The amendments remove some of the most onerous aspects of CIDA. Critically, CIDA no longer applies to pending lawsuits. CIDA now only applies to lawsuits filed after the CIDA 12/31/21 effective date. The amendments also lengthen the deadlines for disclosures on new suits from 60 to 90 days after service of an answer. In addition, CIDA no longer requires disclosures of insurance applications.
Still, the heart of CIDA’s disclosure requirements remain. The requirements are still self-executing. Defendants must still disclose applicable primary, excess, and umbrella policies, but the amendments make clear that these disclosures only cover policies that relate to the claim being litigated. Defendants must still disclose available limits of insurance on policies as eroded, though they need not disclose information about specific lawsuits that eroded limits. In addition, both defense counsel and defendants must still certify that the information is accurate and complete, and provide updated information at certain designated stages of the litigation.
Defense counsel in New York state cases filed in 2022 should review these requirements. As disclosure deadlines of the rules kick in, disputes will arise, and courts will inevitably have to interpret CIDA and its amendments.
