New York AG Fines NRA, Imposes 5 Year Ban on Insurance Sales

The National Rifle Association agreed to a five-year ban on doing insurance business in New York state and will pay a $2.5 million civil fine to settle charges it offered insurance to members without a license and concealed how it routinely kept some premiums for itself.

New York’s Department of Financial Services announced the settlement on Wednesday, a little over three months after state Attorney General Letitia James sued to dissolve the gun rights group, accusing it of widespread corruption.

Wednesday’s accord resolved charges over the NRA’s two-decade relationship with insurance broker Lockton Cos, including the sale of 28,015 policies to New Yorkers and the NRA’s receipt of more than $1.8 million in associated royalties and fees.

Linda Lacewell, the state insurance superintendent, said Lockton’s NRA-branded “Carry Guard” program illegally offered policyholders coverage for criminal defense costs and the “intentional” use of firearms in shooting incidents.

She also accused the NRA of misleadingly promising coverage for gun collectors, dealers, instructors, clubs and shows at the “lowest possible cost,” when in fact the group typically kept between 13.7% and 21.9% of premiums paid.

Lawyers for the NRA had no immediate comment. They have said the NRA did not underwrite or administer insurance programs, and like “countless” affinity groups relied on industry experts to market products for its members.

The NRA has long battled with New York state officials, including in a May 2018 lawsuit where it accused Governor Andrew Cuomo of attempted “blacklisting” for pressuring banks and insurers to stop doing business with it.

“It would be highly unusual for a state to allow an insurance company to reimburse for an illegal activity,” Cuomo told CNN three months after that case was filed. “They call it ‘murder insurance.'”

The financial services department fined Lockton $7 million in May 2018 over its involvement with Carry Guard.