New York’s New Insurance Disclosure Act

New York’s New Insurance Disclosure Act

A new law, namely, the Comprehensive Insurance Disclosure Act (Senate Bill 7052), was signed by Kathy Hochul, the Governor of New York, on 31 December 2021. Now, as per this new law the defendants, defendants on the counterclaims, defendants on the cross claims and the defendants of the third-party are obligated to produce the original copy of all of the umbrella clauses and excess insurance policies that satisfy the judgment, either wholly or partly and this should be completed within 60 days from the date the claim has been answered by the defendants. 

Additionally, in case there is any pending information pertaining to the policies that has not yet been provided in any of the pending cases, then such information is to be provided by 1 March 2022. Apart from the policies, the party, who is required to produce the documents must also produce the applications, the contact details of the person who is responsible to adjust the claim, information pertaining to limits erosion, and the amount that is available under the policies (at that time). The disclosing party, on the other hand, along with his/her counsel is required to certify the informational accuracy of the documents and information produced by the producing party. Further, the disclosing party has also been mandated to make reasonable efforts and take reasonable steps for updating the information, if it is erroneous or incomplete, within 30 days of receiving the information pertaining to the fact that the information provided was inaccurate.

This new law has indeed increased the disclosure requirements and imposed the burden of disclosure on the defendants. Initially, Section 3101(f) of the C.P.L.R., which was amended through the Senate Bill 7052 (i.e., the New Insurance Disclosure Act), provided the parties the autonomy to seek through discovery, the insurance information. The new law makes it an obligation, the burden of which falls upon the defendants, and this is why the said law has been criticized as they seem too problematic and burdensome.