NRA settles New York insurance case with $2.5M penalty, five-year ban

Inquiry 'began with a roar, ends with a whimper,' NRA attorney says

The National Rifle Association (NRA) reached an agreement with the New York Department of Financial Services (DFS) to resolve a case where they faced allegations of violating state insurance law.

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The state accused the NRA of unlawfully soliciting and marketing insurance products without a license, including insurance for people who possess concealed carry permits as part of its "Carry Guard Program."

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“The NRA operated as an unlicensed insurance producer and broke the New York Insurance Law by soliciting insurance products and receiving compensation,” Superintendent of Financial Services Linda Lacewell said in a statement. “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 Department will continue to protect the integrity of the insurance market for the purposes of safety and soundness and the good of all consumers.”

According to the consent order signed by the NRA and DFS, the NRA claims they consulted with licensed insurance broker Lockton Affinity to make sure that the Carry Guard program's insurance products and marketing were within the law.

As part of the agreement, the NRA agreed to pay a $2.5 million civil penalty and to not receive compensation for new insurance policies or engage in the marketing of insurance in New York for five years. The NRA did not admit to wrongdoing.

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"The DFS inquiry, which began with a roar, ends with a whimper,” counsel to the NRA William A. Brewer III said. “The consent order contains no admissions by the NRA, and no NRA member money will fund this settlement.”

Brewer added that while "DFS has settled its claims against the NRA, the NRA’s claims against DFS – and New York Gov. Andrew Cuomo and New York Attorney General Letitia James – will go forward."

James filed a lawsuit in August in which she is seeking to dissolve the NRA entirely. The 163-page complaint alleges that NRA leadership engaged in self-dealing, including taking millions of dollars from the organization for personal use.

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The NRA countersued James, seeking a court declaration that they were following state not-for-profit law and alleging that the New York attorney general is targeting the organization for its political positions, violating its free speech rights.

The organization had also sued Cuomo after gun stores were deemed nonessential and forced to close at the height of the coronavirus pandemic in April. A U.S. District Court judge dismissed that case, ruling that the NRA did not have standing to sue on behalf of its members.

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