The National Rifle Association (NRA) will pay a $2.5 million fine for charges related to an allegedly illicit insurance business in New York and will halt insurance-related work in the state for five years.
According to a press release from the Department of Financial Services in the State of New York, the settlement includes the monetary penalty, and the NRA is “banned from doing insurance business in New York for five years.”
“In addition, the NRA is banned from marketing insurance in the State or receiving compensation in connection with any newly issued New York insurance policies for five years, irrespective of whether the NRA obtains a license,” the release stated.
The decision brings to a close a three-year investigation into the NRA over charges that the group offered insurance to members without having a license, as well as withholding information regarding how premiums were kept.
The press release stated that over 28,000 NRA-endorsed policies were placed in New York through Lockton Affinity Series of Lockton Affinity, LLC.
One of the programs in question was the “Carry Guard” insurance program, which was marketed and sold nationwide, with around 680 policies issued in New York.
“In the Consent Order, DFS found that the Carry Guard program offered coverage that is unlawful in New York State, namely coverage for losses and costs associated with the aftermath of the purposeful use of the firearm, including defense costs in a criminal prosecution,” the release stated. “Under New York law, intentional acts cannot be insured.”
The Hill reported that the NRA allegedly received more than $1.8 million in royalties and fees associated with the programs, and reportedly kept between 13.67 percent and 21.92 percent of premiums.
“The NRA operated as an unlicensed insurance producer and broke the New York Insurance Law by soliciting insurance products and receiving compensation,” said Superintendent of Financial Services Linda Lacewell. “Even worse, the NRA violated the New York Insurance Law by soliciting dangerous and impermissible insurance products, including those within its Carry Guard program that purported to insure intentional acts and criminal defense costs.”
The announcement comes after New York’s Attorney General, Democrat Letitia James, sued to break up the NRA over claims of corruption earlier this year.
According to the Attorney General’s website, James charged the organization with illegal activity regarding their “diversion of millions of dollars away from the charitable mission of the organization for personal use by senior leadership, awarding contracts to the financial gain of close associates and family, and appearing to dole out lucrative no-show contracts to former employees in order to buy their silence and continued loyalty.”
The New York Department of Financial Services also fined Lockton Companies and its affiliate Lockton Affinity $7 million in May 2018 for serving as the administrator and producer of a number of NRA-branded insurance products.