By Jonathan Stempel
NEW YORK (Reuters) – New York’s financial regulator on Wednesday filed civil charges accusing the National Rifle Association of offering insurance to its members without a license and concealing how it routinely kept some of their premiums for itself.
The state Department of Financial Services announced the charges as it defends against a May 2018 NRA lawsuit accusing the regulator and Governor Andrew Cuomo of “blacklisting” the gun rights group and threatening its survival by pressuring banks and insurers to stop doing business with it.
Spokespeople for the NRA had no immediate comment.
The regulator is seeking civil fines and other remedies, and scheduled an April 6 hearing at its office.
Its statement of charges focuses mainly on the NRA’s dealings since 2000 with insurance broker Lockton Cos, including the sale of more than 28,000 policies to members.
These policies included the NRA-branded “Carry Guard,” which the regulator said offered policyholders unlawful liability coverage, including for criminal defense costs and “intentional” conduct in shooting incidents.
The NRA was also accused 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.
Lockton was fined $7 million by the regulator in May 2018 over its involvement with Carry Guard.
“It would be highly unusual for a state to allow an insurance company to reimburse for an illegal activity,” Cuomo told CNN in August 2018. “They call it ‘murder insurance.'”
According to the statement of charges, New Yorkers obtained 28,005 insurance policies through Lockton from 2000 to 2018, and the NRA received more than $1.8 million in royalties and fees from Lockton programs from 2000 to 2019.
In the NRA’s own case, U.S. District Judge Thomas McAvoy has ruled that the group can pursue its First Amendment free speech claims, saying “‘gun promotion’ advocacy is core political speech entitled to constitutional protection.”
McAvoy has also dismissed the NRA’s claims that it was targeted through “selective enforcement” of state insurance laws, and that Cuomo and former financial services superintendent Maria Vullo owe monetary damages.
(Reporting by Jonathan Stempel in New York; Editing by Bernadette Baum and David Gregorio)