What an Opposing Lawyer Can Actually Obtain About a Policy

The conversation usually happens in the second hour. A family has understood that a policy is not filed with a court, does not appear on a register, and is held by an institution under real confidentiality duties. Then somebody asks what happens if they are sued, and the answer changes the mood of the room. There is no privilege attaching to insurance. None. A policy, its cash value, its holdings, its beneficiary and the file the carrier keeps are all ordinary evidence, discoverable on ordinary terms, and the only thing standing between them and a public court file is an order a judge has to be persuaded to make.

That is not an argument against holding a policy. It is an argument for understanding, before rather than after, what a contested case actually reaches. This article sets out the mechanics: the scope rule, the subpoena power, what happens when the carrier is offshore, what changes the day a judgment is entered, and why matrimonial proceedings are the hardest case of all. The wider question of who can see a policy in ordinary circumstances is on our page on privacy and confidentiality. Whether a creditor can actually reach the assets is a different subject again, governed by exemption statutes and situs, and it is on our asset protection page.

The scope rule, and the sentence that was deleted

Federal Rule of Civil Procedure 26(b)(1) sets the boundary for everything that follows:

"Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. Information within this scope of discovery need not be admissible in evidence to be discoverable."

Six proportionality factors, which the 2015 amendments moved up into the definition of scope rather than leaving them in a subsection nobody read. The same amendments deleted the old formula permitting discovery "reasonably calculated to lead to the discovery of admissible evidence," which the Advisory Committee noted "has been used by some, incorrectly, to define the scope of discovery." Two points that get misstated in both directions: the Committee note says the change "does not place on the party seeking discovery the burden of addressing all proportionality considerations," and it says a responding party may not refuse discovery "simply by making a boilerplate objection that it is not proportional."

So proportionality is a real constraint and it is not a shield. A demand for every document a carrier holds about a family, in a dispute about a shipping contract, is vulnerable. A demand for the current cash surrender value of a policy, in a case where the plaintiff has a judgment or is alleging a fraudulent transfer, is not.

There is no insurance privilege, and the rules point the other way

People assume a privilege exists because insurance feels private. Federal Rule of Evidence 501 makes the position plain: the common law governs claims of privilege unless the Constitution, a federal statute or a Supreme Court rule provides otherwise. None of those creates an insurance privilege. The Supreme Court in Jaffee v. Redmond, 518 U.S. 1 (1996) set a high bar for new privileges, which "are not lightly created nor expansively construed, for they are in derogation of the search for truth."

The federal rules in fact run the other way. Rule 26(a)(1)(A)(iv) affirmatively compels a party, without any request, to produce "any insurance agreement under which an insurance business may be liable to satisfy all or part of a possible judgment in the action or to indemnify or reimburse for payments made to satisfy the judgment." That is liability cover, and the distinction matters: a defendant's own life policy is an asset, not an indemnity against the judgment, so it falls outside the mandatory initial disclosure. Anyone reassured by that should read the rest of this article, because escaping automatic disclosure is not the same as being undiscoverable.

Attorney-client privilege and work product still operate on their own terms, but they attach to communications with counsel, not to the policy, the application, the underwriting file or the broker's correspondence. Families often assume their tax advice is protected. The federally authorised tax practitioner privilege at Internal Revenue Code section 7525 extends the common law confidentiality of attorney communications to a federally authorised tax practitioner, and then limits it severely: under section 7525(a)(2) it "may only be asserted in ... any noncriminal tax matter before the Internal Revenue Service" and "any noncriminal tax proceeding in Federal court brought by or against the United States." It does nothing in a divorce, nothing in a state court, nothing in private civil litigation and nothing in a criminal matter. Section 7525(b) removes it entirely for written communications promoting participation in a tax shelter as defined in section 6662(d)(2)(C)(ii).

The carrier is a stranger to the case, and Rule 45 reaches it anyway

Most families assume that because the insurer is not a party, it is out of the dispute. Rule 45 exists precisely to solve that problem. A subpoena may command a person to "produce designated documents, electronically stored information, or tangible things in that person's possession, custody, or control," and it runs against non-parties. Carriers, administrators, trustees, custodians and brokers are all reachable.

The limits are real but they are logistical rather than substantive. Rule 45(c)(2)(A) confines production to a place within 100 miles of where the person resides, is employed or regularly transacts business in person. Rule 45(d)(1) obliges the issuing party to "take reasonable steps to avoid imposing undue burden or expense" and empowers the court to sanction failures, including lost earnings and attorney's fees.

The protections that matter are in Rule 45(d)(3), and the drafting distinction is the one to hold onto. Under subparagraph (A) the court must quash or modify a subpoena that allows unreasonable time to comply, exceeds the geographic limits, requires disclosure of privileged or other protected matter where no exception applies, or subjects a person to undue burden. Under subparagraph (B) the court may quash or modify where the subpoena requires "disclosing a trade secret or other confidential research, development, or commercial information." Confidentiality is in the discretionary paragraph, not the mandatory one. And under subparagraph (C) a court can order production anyway, on conditions, where the serving party shows substantial need that cannot otherwise be met without undue hardship and ensures reasonable compensation.

A carrier served with a subpoena will do what any institution does. It will check whether it is obliged to comply, tell the policyholder if its contract or local law requires it, and comply. It is not going to litigate a stranger's discovery dispute at its own expense on a client's behalf, and no family should plan on the assumption that it will. What the carrier holds before any subpoena arrives, and who inside the institution is permitted to read it, is a separate question we set out in our article on who sees the file.

A foreign carrier is not out of reach

This is where the marketing and the law part company most sharply. The Hague Convention of 18 March 1970 on the Taking of Evidence Abroad in Civil or Commercial Matters provides a formal route: under Article 1, a judicial authority of a contracting state may request the competent authority of another contracting state, by Letter of Request, to obtain evidence. Article 23 lets a contracting state declare that it will not execute Letters of Request "issued for the purpose of obtaining pre-trial discovery of documents as known in Common Law countries," and many civil law states have made exactly that declaration. The HCCH status table recorded 69 contracting parties when last updated on 30 April 2026, a figure worth re-checking rather than repeating.

If the Convention were the only route, the Article 23 reservation would matter enormously. It is not. In Société Nationale Industrielle Aérospatiale v. U.S. District Court, 482 U.S. 522 (1987), the Supreme Court held that the Convention "does not provide exclusive or mandatory procedures for obtaining documents and information located in a foreign signatory's territory." The Court declined to require first resort to Convention procedures, describing the Convention as establishing "optional procedures that would facilitate the taking of evidence abroad," and confirmed that it "did not deprive the District Court of the jurisdiction it otherwise possessed to order a foreign national party before it to produce evidence physically located within a signatory nation."

Instead the Court required "a more particularized analysis of the respective interests of the foreign nation and the requesting nation," case by case, and adopted a set of comity factors drawn from the Restatement: the importance of the documents to the litigation, the specificity of the request, whether the information originated in the United States, the availability of alternative means, and the extent to which non-compliance would undermine important United States interests or compliance would undermine important interests of the state where the information sits.

The practical reading is uncomfortable and worth stating flatly. Where a United States court has jurisdiction over the person who controls the documents, it can order production directly. The Convention matters most where the holder is a genuine stranger beyond the court's reach, which describes a carrier rather less often than families hope.

Foreign secrecy law is not a defence to the order

The popular version of this is wrong in both directions, so it is worth being precise.

Secrecy statutes do not deprive an American court of the power to order production. Aérospatiale put it in a footnote that has done more work than most holdings: "It is well settled that such statutes do not deprive an American court of the power to order a party subject to its jurisdiction to produce evidence, even though the act of production may violate that statute." The Ninth Circuit repeats the sentence verbatim in Richmark Corp. v. Timber Falling Consultants, 959 F.2d 1468 (9th Cir. 1992).

Where foreign law does have force is at the sanctions stage. In Société Internationale pour Participations Industrielles et Commerciales v. Rogers, 357 U.S. 197 (1958), Swiss penal secrecy law did not bar the production order, but the Court held that dismissal of the complaint was improper where "failure to comply has been due to inability, and not to willfulness, bad faith, or any fault of petitioner." Richmark then required an affirmative showing of good faith efforts, including seeking a waiver from the foreign authority, before non-compliance would be excused at all.

So the accurate summary is this. A confidentiality duty owed by a Luxembourg or Swiss carrier is real, is enforceable against the carrier, and is worth having. It is not a reason a United States court will decline to order a party before it to produce the same information, and a family that treats it as one will end up explaining inability to a judge who is entitled to be sceptical.

After judgment, the filter comes off

Everything above concerns discovery on the merits, where relevance and proportionality do some work. Rule 69(a)(2) describes a different world:

"In aid of the judgment or execution, the judgment creditor or a successor in interest whose interest appears of record may obtain discovery from any person, including the judgment debtor, as provided in these rules or by the procedure of the state where the court is located."

Note the breadth. Discovery from any person, expressly including but not limited to the debtor. At that point the earlier distinction between liability cover and a life policy held as an asset stops mattering, because the whole purpose of the exercise is to find assets. A judgment creditor asking a carrier what a policy is worth is doing exactly what the rule contemplates.

Divorce is the hardest case, and the forms name the asset

In matrimonial proceedings the question of relevance mostly disappears, because the states have already answered it by making financial disclosure mandatory and putting cash value on the form.

California requires each party to serve a preliminary declaration of disclosure executed under penalty of perjury, identifying with sufficient particularity "the identity of all assets in which the declarant has or may have an interest and all liabilities for which the declarant is or may be liable, regardless of the characterization," under Family Code section 2104. A final declaration follows under section 2105, no later than 45 days before the first assigned trial date unless mutually waived, covering the characterisation and valuation of everything contended to be community property.

The mandatory Schedule of Assets and Debts, Judicial Council form FL-142, does not leave the point to inference. Item 10 reads: "LIFE INSURANCE WITH CASH SURRENDER OR LOAN VALUE (Attach copy of declaration page for each policy.)" A dedicated numbered line, and a demand for the declaration page.

The sanction is not discretionary. Family Code section 2107(c) provides that where a party fails to comply, the court "shall, in addition to any other remedy provided by law, impose money sanctions against the noncomplying party," in an amount sufficient to deter repetition and including reasonable attorney's fees and costs, unless the court finds substantial justification or that sanctions would be unjust. Section 2107(d) adds that where the disclosure requirements are not met, the court shall set aside the judgment, and that non-compliance is not harmless error.

What that looks like in practice is In re Marriage of Rossi, 90 Cal. App. 4th 34 (2001), in which a wife concealed 1,336,000 dollars of lottery winnings during the dissolution. Applying Family Code section 1101(h), which provides for an award to the other spouse of 100 percent of any asset undisclosed or transferred in breach of fiduciary duty, the trial court awarded the husband the entire sum, and the Court of Appeal affirmed. That is the price of an omission on a disclosure form.

New York arrives at the same destination by a different road. Domestic Relations Law section 236(B)(4) makes financial disclosure compulsory in matrimonial actions involving maintenance or support, without any showing of special circumstances, through a sworn statement of net worth covering income, assets and transfers for the preceding three years or the length of the marriage, whichever is shorter, with non-compliance punishable under CPLR 3126. And 22 NYCRR 202.16(f)(1)(vi) requires the parties to exchange, at the preliminary conference, statements pertaining to "any policy of life insurance having a cash or dividend surrender value." Again, named expressly.

Is cash value marital property?

The mainstream answer is that the divisible asset during the insured's life is the cash surrender value, not the death benefit. The Pennsylvania Superior Court put it directly in Lindsey v. Lindsey, 342 Pa. Super. 72 (1985): "Only the cash surrender value of the policies could be considered marital property," reasoning that naming a beneficiary "vests nothing in that person during the lifetime of the insured; the beneficiary has but a mere expectancy."

Two qualifications matter and neither can be skipped. Characterisation varies by state, and a community property regime such as California's works differently from an equitable distribution regime such as New York's or Pennsylvania's. And the outcome turns heavily on the source of the premiums. Property acquired before marriage or by gift or bequest is generally separate, but where marital or community funds paid the premiums the marital estate acquires an interest, which is exactly why the premium payment trail is what opposing counsel goes looking for. A policy funded from a pre-marital account, documented at the time, is in a materially different position from one funded out of a joint account for eleven years.

What actually protects information in a contested case

Having established that there is no privilege, it is worth being equally clear about what does work.

Rule 26(c)(1) allows a court, for good cause, to issue an order protecting a party or person "from annoyance, embarrassment, oppression, or undue burden or expense," including under subparagraph (G) an order "requiring that a trade secret or other confidential research, development, or commercial information not be revealed or be revealed only in a specified way." The motion must include a certification that the movant has conferred in good faith with the other side first.

The Supreme Court supplied the theory in Seattle Times Co. v. Rhinehart, 467 U.S. 20 (1984), observing that "pretrial depositions and interrogatories are not public components of a civil trial" and that trial courts need "substantial latitude to fashion protective orders." That is the real mechanism by which financial detail stays out of a public file: negotiated between counsel, entered by a judge, tailored to a case, and available equally to a family that holds a policy and one that holds a brokerage account. It is a procedural remedy, not a property of the product.

The working test

We apply one question to every structure we look at, and it is the same question our asset protection work applies: does this still read well when described accurately to a court, to a revenue authority and to a spouse's counsel? If the answer is no, the problem is the plan. Nothing in the procedural rules above is going to rescue an arrangement that only works while nobody is looking, and the rules were drafted by people who had seen a great many arrangements of exactly that kind.

The corollary is more encouraging than it sounds. A compliant policy, funded from documented sources, reported where reporting is required and owned by whoever ought to own it, survives discovery intact. It gets disclosed, it gets valued, and it goes on doing what it was built to do. What it does not do is disappear, and the families who understand that at the outset are the ones who never have an uncomfortable afternoon about it later.

Frequently asked questions

Is there any privilege protecting a life insurance policy from discovery?

No. Federal Rule of Evidence 501 recognises privileges arising from the Constitution, federal statute or Supreme Court rule, and none creates an insurance privilege. Rule 26(a)(1)(A)(iv) in fact compels disclosure of liability insurance agreements without any request. Attorney-client privilege and work product still apply to communications with counsel, but they do not attach to the policy, the application, the underwriting file or the broker's file.

Does a defendant have to disclose a life policy in initial disclosures?

Not under Rule 26(a)(1)(A)(iv), which reaches an insurance agreement under which an insurer may be liable to satisfy a judgment in the action. A life policy held as an asset is not that. It can still be discoverable under Rule 26(b)(1) if relevant and proportional, reachable by subpoena under Rule 45, obtainable post-judgment under Rule 69(a)(2), and required to be disclosed under state matrimonial rules.

Can a court subpoena an insurance company that is not a party?

Yes. Rule 45 permits a subpoena commanding a non-party to produce documents in its possession, custody or control. Rule 45(c)(2)(A) limits production to a place within 100 miles of where the person resides, is employed or regularly transacts business. Under Rule 45(d)(3)(A) the court must quash a subpoena that is untimely, exceeds the geographic limits, demands privileged matter or imposes undue burden; under 45(d)(3)(B) it may quash one demanding confidential commercial information, and under 45(d)(3)(C) it may instead order production on conditions.

Does a foreign carrier's secrecy law protect the information?

Not from a United States court order directed at a party before it. Aérospatiale stated that such statutes "do not deprive an American court of the power to order a party subject to its jurisdiction to produce evidence, even though the act of production may violate that statute." Foreign law is relevant to sanctions rather than to the order: Société Internationale v. Rogers held dismissal improper where failure to comply was due to genuine inability rather than bad faith, and Richmark requires a showing of good faith efforts including seeking a waiver.

Must a United States court use the Hague Evidence Convention?

No. Aérospatiale held that the Convention "does not provide exclusive or mandatory procedures" and declined to require first resort to it. The Court instead required a case-by-case comity analysis weighing the importance and specificity of the request, where the information originated, alternative means, and the competing national interests. Note also that Article 23 permits a contracting state to refuse Letters of Request seeking common law pre-trial discovery of documents, and many have done so.

What must be disclosed about life insurance in a divorce?

In California, the Schedule of Assets and Debts, form FL-142, has a dedicated item 10 for life insurance with cash surrender or loan value and requires the declaration page for each policy, within the mandatory disclosure regime at Family Code sections 2100 to 2107. In New York, 22 NYCRR 202.16(f)(1)(vi) requires exchange of statements pertaining to any policy of life insurance having a cash or dividend surrender value, alongside the sworn statement of net worth required by Domestic Relations Law section 236(B)(4).

What is the penalty for failing to disclose a policy in a divorce?

In California, Family Code section 2107(c) requires the court to impose money sanctions including attorney's fees, and section 2107(d) requires the judgment to be set aside where disclosure requirements were not met, with non-compliance expressly not harmless error. Under section 1101(h) a court may award the other spouse 100 percent of an asset undisclosed in breach of fiduciary duty, which is what happened in In re Marriage of Rossi.

Is the cash value of a policy marital property?

Generally the cash surrender value rather than the death benefit is the divisible asset during the insured's life, as stated in Lindsey v. Lindsey. The answer varies by state and turns heavily on whether premiums were paid with marital or separate funds, so the premium payment history is usually the point of contest rather than the policy itself.

Sources and authorities

Federal Rules of Civil Procedure 26(a)(1)(A)(iv), 26(b)(1), 26(c)(1), 45(c) and (d), and 69(a)(2), with the 2015 Advisory Committee Note to Rule 26. Federal Rule of Evidence 501 and Jaffee v. Redmond, 518 U.S. 1 (1996). Internal Revenue Code section 7525. Société Nationale Industrielle Aérospatiale v. U.S. District Court, 482 U.S. 522 (1987); Société Internationale v. Rogers, 357 U.S. 197 (1958); Richmark Corp. v. Timber Falling Consultants, 959 F.2d 1468 (9th Cir. 1992); Seattle Times Co. v. Rhinehart, 467 U.S. 20 (1984). Hague Convention of 18 March 1970 on the Taking of Evidence Abroad in Civil or Commercial Matters, Articles 1 and 23, and the HCCH status table. California Family Code sections 1101(h), 2100, 2104, 2105 and 2107, with Judicial Council form FL-142, and In re Marriage of Rossi, 90 Cal. App. 4th 34 (2001). New York Domestic Relations Law section 236(B) and 22 NYCRR 202.16. Lindsey v. Lindsey, 342 Pa. Super. 72 (1985).

Our editorial standards explain how articles like this one are sourced and reviewed.

This article is educational only and does not constitute legal, tax, investment, or insurance advice. Procedural rules, matrimonial disclosure requirements and the characterisation of property differ by jurisdiction and change over time, and the outcome in any particular case depends on its own facts. Engage qualified counsel in every relevant jurisdiction before acting.