The New York Department of Financial Services, or DFS, and the National Rifle Association, or NRA, reached a settlement following allegations that the NRA was in violation of New York’s insurance policy. The dollar amount of the settlement is $2.5 million and the NRA will be cleared of any wrongdoing.
In addition to the multi-million dollar payout, the NRA has agreed not to offer insurance in the state of New York for five years, even if the organization obtains all the correct licenses during that period.
Earlier this year the New York DFS alleged that certain NRA programs like the Carry Guard insurance program were not in compliance with New York insurance sales regulations. The NRA ended the program amid several state-level investigations.
“The NRA operated as an unlicensed insurance producer and broke the New York Insurance Law by soliciting insurance products and receiving compensation,” said DFS Superintendent Linda Lacewell, in an announcement. “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.”
Several insurance companies were also fined by the DFS for their part in underwriting the Carry Guard program, including Chubb for $1.3 million, Lloyd’s for $5 million and Lockton Affinity for $7 million.
Gun-control advocates cite this as a win, calling the Carry Guard program “murder insurance.” The NRA canceled the Carry Guard program in 2019, which guaranteed a legal fund for policyholders should they need them in cases of self-defense.
“Carry Guard encouraged its policyholders to shoot first and ask questions later, putting lives at risk and providing a false sense of legal and financial immunity,” said gun control activist Shannon Watts. “This outcome is an encouraging sign that regulators listened to the Moms Demand Action volunteers who filed complaints against Carry Guard in multiple states, and will hold the NRA accountable for their dangerous and unethical actions.”
“Carry Guard was murder insurance, plain and simple, and we’re grateful to New York’s Department of Financial Services for acting on Everytown’s initial investigation, and holding the NRA accountable for this egregious attempt to fill its coffers at the expense of public safety,” said John Feinblatt.
Around 30,000 NRA-endorsed policies were taken out in New York through different insurance carriers. By endorsing, marketing and profiting off these policies, the NRA acted as an unauthorized carrier, according to the DFS.
Proponents of Carry Guard and other self-defense insurance programs would certainly take umbrage with the “murder insurance” characterization. Under the policies offered by various carriers, the insurance doesn’t kick in if, for example, a policyholder was in the process of committing a felony during the shooting.
For instance, someone committing the act of rape or dealing drugs during a deadly force encounter would not be covered.
By and large, the purpose of these programs is not to give violent criminals a green light to commit murder but to protect law-abiding citizens from anti-2A attorneys who believe that one doesn’t have a natural right to self-defense and that even lawful uses of force ought to be prosecuted.
UPDATE: Nov. 26, 2020
NRA has reportedly admitted in a 2019 tax filing that certain executives used donor dollars for personal benefit, including the organization’s leader Wayne LaPierre.
The Washington Post obtained a copy of the tax return that states the NRA “became aware during 2019 of a significant diversion of its assets,” following an internal audit.
NRA executive vice president Wayne LaPierre along with five former officials received “excess benefits,” according to the filing.
But, the filing makes it clear that LaPierre has since “corrected” his misappropriation of funds, cutting a personal check to NRA to the tune of almost $300,000 for travel expenses from 2015-2019.
The document is not letting the other executives off the hook. It claims that they “improperly” used funds or charged the organization for expenses that were “not appropriate.”
Tax experts who evaluated the filing told The Post that it’s apparent that NRA is trying to get its ducks in a row following a few years on shaky financial ground.
“This is the type of cleanup I would expect to see after a history of gross violations of nonprofit law,” said Philip Hackney, an associate professor of law at the University of Pittsburgh.
Hackney, who also worked at the IRS, noted that LaPierre signed the return which is customarily signed by the treasurer.
“He is putting himself on the line, under penalties of perjury, which is what you do if you are trying to get in someone’s good graces,” Hackney said.
“It’s a smart move by the NRA instead of digging in their heels, though who knows how they came up with the numbers,” added attorney and nonprofit expert Daniel Kurtz. “It’s an admission of wrongdoing, for sure.”
NRA leadership wants to put its checkered past behind it and move forward. That much is clear. The real question is whether the organization’s 5 million members are ready to do the same. Will they forgive those at the helm for their lapses in judgment?