BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.

To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.

To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.

Login Register Subscribe

Regulator warns industry on NRA affiliations, motives questioned

Regulator warns industry on NRA affiliations, motives questioned

Insurance industry experts are voicing concern over an April 19 memo by the New York State Department of Financial Services advising insurers doing business with the Empire State to evaluate their risks if they have a relationship with the National Rifle Association or similar organizations.

In a memo addressed to “The Chief Executive Officers or Equivalents of All Insurers Doing Business in the State of New York,” Maria Vullo, the department’s superintendent, said the department “encourages its insurers to continue evaluating and managing their risks, including reputational risks, that may arise from their dealings with the NRA or similar gun promotion organizations, if any, as well as continued assessment of compliance with their own codes of social responsibility.”

The department issued the guidance, the memo said, “in the wake of several recent horrific shootings,” including the Feb. 14 mass shooting in Parkland, Florida, that left 17 students and staff members at Marjory Stoneman Douglas High School dead.

“Our insurers are key players in maintaining and improving public health and safety in the communities they serve,” Ms. Vullo wrote. “They are also in the business of managing risks, including their own reputational risks, by making risk management decisions on a regular basis regarding if and how they will do business with certain sectors or entities.”

New York Gov. Andrew Cuomo said in an April 19 statement accompanying the DFS memo that he was directing the Department of Financial Services “to urge insurers and bankers statewide to determine whether any relationship they may have with the NRA or similar organizations sends the wrong message to their clients and their communities who often look to them for guidance and support.”

The memo noted that a number of financial institutions had severed ties with the NRA.

In March, several insurance-sector companies, including Chubb Ltd., Lockton Cos. L.L.C. and MetLife Inc., announced they were no longer participating in National Rifle Association insurance programs.

Some observers expressed concern about regulators giving out such notices.

“What worries me about an insurance regulator putting out this kind of warning is where does it stop?” said M. Michael Zuckerman, associate professor of instruction for risk, insurance and health care management at Temple University’s Fox School of Business in Philadelphia. “As long as the insurance company is acting legally and is fully compliant with all regulations, it’s not for the government to tell them who to do business and not to do business with — so long as it’s legal.”

Mr. Zuckerman said insurance regulators advise insurance companies all the time, but usually in matters of what is in the best interests of the insurance consumer, such as cyber coverage.

“But to say specifically watch what you’re doing with the NRA because it may hurt your brand is a little Big Brother for me,” he said. “This smacked a little bit of ‘we want you to be politically correct under the guise of reputational risk management.’ I would caution insurance regulators: Don’t go there.”

“I think this is sort of a knee-jerk response by New York,” said Tim Query, professor with the finance department at the University of New Mexico’s NMSU College of Business in Las Cruces. “I don’t think insurance companies should panic and turn down business. If they can manage the risk exposure in a profitable way, I don’t think they should panic at this point.”

Robert Gordon, senior vice president of policy, research and international for the Chicago-based Property Casualty Insurers Association of America, said in a statement that “insurers provide protection to consumers based on risk rather than politics.”

“It is ironic that one regulator is asking insurers to provide protection to the marijuana industry, a drug that is illegal under federal law, while another is pressuring insurers not to provide coverage to gun organizations, which are not illegal,” Mr. Gordon wrote, referencing California’s push to cover cannabis. “PCI supports the ability of our members to make individual decisions on how best to serve their policyholders and shareholders and which risks they believe are appropriate to cover.”

“New York statutes, and the Department of Financial Services’ own website, make clear the department’s regulatory mission: to prevent financial crises, and protect consumers and markets from fraud,” William A. Brewer III, partner at Brewer, Attorneys & Counselors and counsel for the NRA, said in a statement. “Instead, in our view, Governor Cuomo and DFS Superintendent Maria Vullo are abusing this public trust by mounting a blacklisting campaign that seeks to deprive Second Amendment advocates of banking services and insurance coverage in the State of New York.”

The Department of Financial Services did not respond to a request for comment.

Experts said they doubted that New York State’s actions would start a trend.

“My guess is you may see it in California and a few other states,” Mr. Zuckerman said. “I don’t know if you’re going to see it across the board.”

“A lot of times these things just play out,” Mr. Query said. “There’s a lot of emotion in the beginning, but then in this 24-hour media cycle something else comes up to take people’s attention.”






Read Next