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NRA seeks to block enforcement action against insurance program

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The National Rifle Association on Friday sought to halt a New York regulatory enforcement action for its alleged unlicensed sale of insurance, asserting it was singled out for political reasons.

Seeking a preliminary injunction to block a hearing by the state’s Department of Financial Services scheduled for April 6, the Fairfax, Virginia-based gun rights advocacy group argued it had new evidence its affinity insurance program, which it argues is similar to insurance programs offered by other groups, had been unfairly targeted by regulators.

The dispute should be heard in federal court rather than a regulatory hearing, the NRA argued.

The department said the NRA's lawsuit was an "attempt to distract" from its alleged state law violations. 

New York regulators earlier this month charged the NRA with violation of state insurance laws by allegedly acting as an unlicensed insurance broker in marketing and endorsing its insurance program for gun owners.

The NRA had received more than $1.8 million over nine years from the program’s administrator Lockton Cos. LLC in payments based on a percentage of premiums paid by NRA members, the department said. Lockton settled separate regulatory charges related to the program for $7 million in May 2018. 

In its filing in U.S. District Court for the Northern District of New York in Albany, the NRA alleges that the department “selectively wielded its powers at the behest of Governor Cuomo to damage the NRA for its political speech.” New York’s Gov. Andrew M. Cuomo has been an outspoken critic of the NRA.

The NRA says “like many affinity groups and organizations” it made tailored insurance coverage available to its members. “Such ‘affinity’ programs are common,” and the NRA program mirrors policies offered by Lockton to other affinity groups,” the filing says.

Lockton and another broker, Association Group Insurance Administrators Inc. used NRA logos to market the programs, court papers say.

Similar affinity programs are offered in New York by several other organizations ranging from professional associations to organizations for seniors, the NRA argues.

NRA’s selective enforcement claims against the department were rejected by the court last May for failing to show that regulatory actions against other groups had been “consciously declined” by regulators, court papers say.

The group says that in its discovery process it later found evidence that the department pressured insurers to drop the NRA program, singled out the NRA for punishment and sought to conclude its investigation of the NRA through a regulatory action rather than let the court dispute play out.

A spokeswoman for the New York department said an email: “The charges announced by DFS on February 5 allege the NRA violated state law by acting as an unlicensed insurance broker and deceiving consumers. This state matter is entirely separate from the NRA’s meritless lawsuit in federal court. Today’s filing by the NRA is an attempt to distract and deflect from the serious allegations brought by DFS asserting that the NRA violated state law.”