In a year where it seems nothing is ever settled, the NRA’s battle with the State of New York Financial Services Department over insurance sales there has apparently come to a close. According to a release from the New York State Department of Financial Services, the state has entered into a consent order with the NRA.

According to that release, the case is resolved via a consent order that includes a civil monetary penalty of $2.5 million for violations of New York insurance laws. Under that agreement, the NRA is also banned from marketing insurance in the state or receiving any compensation in connection with any New York insurance policies for five years, even if the NRA obtains a license.

It’s important to note that there is no admission of wrongdoing by the NRA in the settlement.

In fact, on its NRA Legal Facts website the NRA says “no NRA money is being used to fund the payment to the Department of Financial Services.” And NRA counsel William A. Brewer III called the order “a resounding win for the NRA and the members it serves.”

The NRA Legal Website also points out the settlement has no bearing on the Association’s ability to procure insurance for its own corporate operations.

Win or not, the consent order states that, despite lacking a license to conduct insurance business in New York, the NRA violated various New York insurance laws and regulations by acting as an insurance producer without a license in participating in efforts to solicit and market the sale of insurance products, including the NRA’s Carry Guard insurance program.

In the insurance business, an “insurance producer” is nearly the same as a “producer” in the securities industry-essentially, commissioned salespersons compensated for people they enroll in an insurance/securities program. Both carry licensing requirements.

“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 A. Lacewell, “…the NRA violated the New York Insurance law by soliciting dangerous and impermissible insurance products, including those in its Carry Guard program that purported to insure intentional acts and criminal defense costs.”

The three year investigation asserted that from 2000 to 2018, the NRA worked with the Lockton Affinity Series of Lockton Affinity, LLC to over a “variety of insurance programs to NRA members, their families and affiliated businesses.”

The NRA, NY asserts, endorsed the programs to its membership via NRA-affiliated websites and email marketing, despite not being an insurance producers license in New York.

More than 28,000 policies were placed in New York through Lockton. The Carry Guard policies, with “about 680” policies issued to New York residents, was the “impermissible insurance product” referenced by Superintendent Lacewell. Selling insurance to cover the costs of “intentional acts” (such as covering the costs of defending a firearms owner after a shooting) is Illegal in New York.

In 2018, DFS fined Lockton Companies and its affiliates $7 million for their role as “producer and administrator for various-NRA branded insurance products, along with $5 million from “certain underwriters at Lloyd’s of London”. Chubb subsidiary Illinois Union Insurance Company settled their underwriting of Cary Guard for $1.3 million in may 2018.

You can read a copy of the consent order here.

In the meantime, the other legal battles between the NRA and the State of New York continue.

On An Unrelated Matter… Next week is Thanksgiving, and that means a short week of wires. If you have information you need to distribute before Thanksgiving, you need to submit it no later than 5p.m. Eastern time on Tuesday, November 24. Wednesday’s editions will be final ones for the week. We will resume our normal schedule on Monday, November 30. And since we’re talking the rapidly-ending year, our final editions of 2020 will be on Friday, December 18, 2020. Following our annual holiday hiatus, we’ll be back with our first editions on Monday, January 4, 2021.