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A Lockton Cos. LLC unit has agreed to pay a $1 million fine to the New Jersey Department of Banking and Insurance as part of a consent order with the department for administering a National Rifle Association-sponsored insurance program in violation of state insurance laws, the department has announced.
Lockton Cos. LLC agreed last year to pay $7 million to New York regulators to settle charges that the brokerage’s National Rifle Association-branded insurance program violated state law and breached excess and surplus lines placement rules.
The New Jersey regulator said in last week’s announcement that Lockton Affinity permitted the NRA to directly market and solicit for its Carry Guard insurance programs in New Jersey.
It said the Carry Guard program was advertised as providing personal firearms liability insurance, including self-defense insurance for those who lawfully carry firearms and their families, including protection against civil liability, the cost to defend against civil and criminal legal actions and immediate access to attorney referrals.
The department said in its statement it violates state regulation for a licensed insurance producer to permit or allow any unlicensed person to transact an insurance producer’s business in the state.
It said while Lockton Affinity is licensed by the department as a nonresident insurance producer with various lines of authority including surplus lines, the NRA is not a licensed insurance producer in New Jersey.
The statement said also the Carry Guard self-defense insurance program included benefits for health insurance, and state law prohibits surplus lines insurance from writing health insurance.
Furthermore, it said Lockton Affinity did not execute a separate agreement with the New Jersey Carry Guard certificate holders for the administrative fee retained by Lockton Affinity, which is required by law.
In addition to paying the fine, Lockton Affinity must take steps to prevent any future solicitation of insurance by unlicensed persons or entities for insurance programs for which Lockton Affinity is the producer, the statement said.
It said also the department is continuing to investigate other firearms-related insurance programs for potential violations of state insurance laws.
Commissioner Marlene Caride said in the statement “Lockton Affinity accepted responsibility in this matter and will take the necessary steps to ensure that unlicensed entities are not able to solicit insurance products in the state.”
Lockton said in a statement, “We fully cooperated with the New Jersey Department of Banking Insurance from the time they first raised this issue with us. We are pleased this matter is now concluded.”
Alliant Insurance Services Inc. has failed to persuade a court to lift a bar on it pursuing various customers of rival brokerage Lockton Cos. LLC in connection with the alleged poaching of more than two dozen Lockton staff.