News

New Legislation Requires Insurance Disclosure, Amends Hearsay Rule

Governor Kathy Hochul has signed legislation that amends New York's Civil Practice Law and Rules (CPLR) in two major ways that will likely have significant impact upon civil litigants in New York's courts.

The Comprehensive Insurance Disclosure Act amends CPLR 3101(f) and now requires Defendants to disclose within 60 days of answering a pleading all sources of insurance coverage that could satisfy a judgment or settlement (specifically, any 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").

Of significance is the requirement that the insurance information must include a "complete copy of the policy ... including but not limited to declarations, insuring agreements, conditions, exclusions, endorsements, and similar provisions". The Defendant must also disclose the available limits available to satisfy a judgment, as well as any judgments or defense fees that have reduced the limits of available insurance.

For the first time, defendants must also identify the adjuster responsible for the claim at the insurance company and its third-party administrator, as well as "persons within the insuring entity to whom the third-party administrator is required to report", and provide their contact information, with its insurance disclosures.

Further, under new CPLR section 3122-b, Defendants, and their counsel, must certify the accuracy of the disclosures by an Affidavit or Affirmation (i.e., under penalties of perjury). The duties under the Act are ongoing, and the Act mandates that the defendant make reasonable efforts to ensure the information remains accurate and complete and to provide updated insurance information within 30 days of receiving it. CPLR section 3122-b applies during "the entire pendency of the litigation and for sixty days after any settlement or entry of final judgment in the case inclusive of all appeals".

The Act applies also to Third-party and Counterclaim Defendants.

Finally, the Governor also signed into law a new section of the Civil Practice Law and Rules - section 4549 "Admissibility of an opposing party's statement" - that eases hearsay requirements, making it easier to use the statement of an opposing party's agent or employee. The new section provides, as follows:

4549. Admissibility of an opposing party's statement. A statement offered against an opposing party shall not be excluded from evidence as hearsay if made by a person whom the opposing party authorized to make a statement on the subject or by the opposing party's agent or employee on a matter within the scope of that relationship and during the existence of that relationship.

For more information on how these new provisions will apply, contact Glenn A. Jacobson (gjacobson@agfjlaw.com), Steven Disiervi (sdisiervi@agfjlaw.com) or Thomas Maeglin (tmaeglin@agfjlaw.com).