New York Alleges NRA Ran Insurance Scam

ALBANY -- New York State Department of Financial Services filed civil charges Wednesday against the National Rifle Association, accusing the gun lobbying group of acting as an unlicensed insurance producer and engaging in misleading marketing practices.

The state previously fined insurance broker Lockton Cos. LLC $7 million for underwriting an NRA-branded insurance program called Carry Guard, which prompted the group to file a lawsuit in 2018 against Gov. Cuomo and other state officials.

The new charges accuse the NRA of working with Lockton to sell insurance to gun owners and their families that would cover losses and costs associated with the aftermath of the purposeful use of a firearm, including defense costs in a criminal prosecution. Under New York law, such acts cannot be insured.

The NRA also misrepresented to its members that the products were being sold at the lowest possible cost. According to DFS, the group kept “substantial” royalties, sometimes exceeding 20% of premiums paid.

The allegations, which date to 2000, include claims that the group has been offering an assortment of insurance for decades.

“For example, the charges allege that the NRA participated in offering its members insurance products involving coverage for firearms instructors, gun collectors, gun clubs, gun shows, federal firearms dealers, and other aspects involving firearms, as well as life, health, and property offerings for their members," DFS said in a statement.

The state is seeking upwards of $14 million in civil fines and other remedies, and scheduled an April 6 hearing at its office.

Last year, NRA head Wayne LaPierre issued a stark warning to supporters that the group was under siege and could be forced to shut down due to financial woes associated with investigations in New York -- a sentiment then echoed by President Trump.

In addition to the DFS investigation, Attorney General Letitia James is probing the group’s finances and non-profit status.

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