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NRA sues N.Y. agency, governor over statements on gun owners insurance

Posted On: May. 11, 2018 2:26 PM CST

NRA sues N.Y. agency, governor over statements on gun owners insurance

The National Rifle Association on Friday said it has filed a lawsuit against New York Gov. Andrew Cuomo, the New York State Department of Financial Services and the department’s superintendent, Maria T. Vullo, for allegedly violating the gun rights’ organization’s First Amendment rights related to the NRA-branded “Carry Guard” insurance program.

The lawsuit seeks millions of dollars in damages and is the latest development in an ongoing battle between New York state and the NRA over the Carry Guard program, which the DFS said unlawfully provided liability insurance to gun owners.

The case of National Rifle Association of America v. Andrew Cuomo, both individually and in his official capacity; Maria T. Vullo, both individually and in her official capacity; and The New York Department of Financial Services was filed in the U.S. District Court in Albany, New York.

The complaint charges Gov. Cuomo conducted a campaign involving “selective prosecution, backroom exhortations, and public threats with a singular goal — to deprive the NRA and its constituents of their First Amendment right to speak freely about gun-related issues and defend the Second Amendment.”

“Defendants specifically intend to undermine the NRA’s ability to conduct its affairs in New York—and to advance Cuomo’s anti-NRA political agenda,” the complaint said.

The complaint said Gov. Cuomo “is a political opportunist who has consistently sought to gain political capital by attacking the NRA” and charged that he “has a history of abusing his regulatory power to retaliate against his political opponents on gun control issues.”

In a statement, the NRA said the defendants sought to “coerce banks and insurance companies to withhold services from the NRA.”

The complaint notes an April 19 memo from Ms. Vullo in which the department encouraged insurers doing business in New York state to continue to evaluate their risks that may arise from their dealings with the NRA or similar gun promotion organizations.

“The directive was packaged in a sharply worded media advisory meant to generate headlines — and apply maximum public pressure on the NRA and those with whom it associates,” the complaint said.

The complaint said Gov. Cuomo and Ms. Vullo issued a press release, containing and endorsing a statement by Ms. Vullo that urged insurance companies and banks doing business in New York to join the companies that have already discontinued their arrangements with the NRA.

On May 2, Lockton Cos. L.L.C. agreed to pay $7 million to New York regulators to settle charges that the Carry Guard program, administered by the brokerage’s Lockton Affinity L.L.C. unit, violated state law and breached excess and surplus lines placement rules.

“DFS and Vullo have no legal basis to restrict Lockton’s involvement with insurance programs that do not violate New York’s Insurance Law,” the complaint said, “nor do they have authority to regulate insurance transactions outside of New York.”

The NRA, in turn, filed a federal lawsuit against Lockton for failing to maintain the program. 

A short time later, Chubb Ltd. agreed to pay a $1.3 million fine for underwriting the Carry Guard through Lockton Affinity. 

And Lloyd’s of London announced that it is directing insurance underwriters to terminate any existing partnership with the NRA.

“The NRA has suffered tens of millions of dollars in damages based on Defendants’ conduct described above,” the complaint said. “Such damages include, without limitation, damages due to reputational harm, increased development and marketing costs for new NRA-endorsed insurance programs, and lost royalty amounts owed to the NRA, as well as attorneys’ fees, legal expenses, and other costs.”

The DFS said in a statement that “as part of the Department’s ongoing investigation, DFS’s consent orders with both Lockton and Chubb addressed the unlicensed and unlawful activity connected with the NRA’s ‘Carry Guard’ program, which unlawfully provided liability insurance to gun owners for acts of intentional wrongdoing … The Department will not stand down from its mandate to enforce New York law.”

The governor’s office did not respond to a request for comment.