All material subject to strictly enforced copyright laws. © 2021 Inside P&C is part of Euromoney Institutional Investor PLC.
Accessibility | Terms & Conditions | Privacy Policy | Modern Slavery Act | Cookies | Subscription Terms & Conditions

Business advocates call for New York governor to veto insurance disclosure bill

2H5M3C6 Kathy Hocul Alamy.jpg
New York Governor Kathy Hocul
Photo: Alamy

Business advocates from across New York State have revived an effort to press Governor Kathy Hochul to veto a bill that would require lawsuit defendants to provide plaintiffs with details about their insurance coverage before a trial begins.

The Comprehensive Insurance Disclosure Act, which passed both houses of the Democratic-controlled state legislature in June, would require that all parties provide notice of the existence and contents of any insurance agreement, including coverage amounts, under which any person or entity may be liable to satisfy part or all of a judgment within 60 days of a lawsuit being filed.

It would also require defendants to provide details about all lawsuits filed that involve the same policies as the plaintiff’s case, a task that could quickly become voluminous in mass tort cases.

Another provision would require disclosing each attorney who received a fee paid out of an applicable policy. Claims adjusters' names and contact information would also have to be disclosed, raising privacy concerns.

The act would take effect immediately after the governor signs it and apply not only to new suits brought after it becomes law, but also pending ones.

A broad coalition of business organizations sent a letter this week to Hochul asking her to veto the bill.

The letter notes that current law establishes a process for plaintiffs to access a defendant’s relevant insurance coverage information and contains provisions for a judge to step in if the disclosure requirements are not met.

Critics of the bill say it would inflate recoveries for plaintiffs while imposing significant costs on insurers and the businesses, municipalities, hospitals and individuals to which they provide cover. One major concern is that plaintiffs would pursue awards based on the amount of insurance available rather than the merits of a case.

Others note that the bill fails to acknowledge that disputes about whether coverage is available for particular claims frequently occur.

“New York’s civil litigation environment is already the costliest in the nation, saddling each New York household with over $6,000 in costs per year, according to a study from the Institute for Legal Reform," states the letter from a series of trade organizations, chambers of commerce and business councils.

"Measures like the one under consideration will only increase that burden, to the detriment of consumers and businesses of all sizes, across all sectors. The only industry that stands to benefit from this proposal is the litigation industry.”

Hochul’s office did not immediately respond to a request for comment.

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree