Washington bans NRA-branded insurance

Washington is following New York in banning the sale of insurance policies branded by the National Rifle Association (NRA) while fining two companies involved in underwriting and selling them in the state.

In May 2018 The New York State Department of Financial Services (DFS) fined Chubb and Lockton a combined $8.3 million for underwriting an NRA-branded insurance programme.

Washington state insurance commissioner Mike Kreidler has now ordered Illinois Union Insurance to stop underwriting the policies, branded under the NRA as self-defense policies. They are illegal in Washington state because they insure unlawful activity, according to a statement.

Kreidler also seeks to fine the company $102,000 for selling 811 of the illegal policies to Washington state consumers.

In addition, Kreidler seeks to fine Lockton Affinity $75,000. Lockton Affinity is the licensed insurance producer that sold the illegal policies on behalf of the NRA.

“When it comes to insurance products associated with the NRA, it’s buyer beware,” Kreidler said. “The attempt to insure a criminal act is a rip-off for consumers. The policies sold are deceptive and dishonest. I would be remiss as the state’s insurance regulator if I didn’t shut them down.”

The companies have until February 14 to agree to the terms of the fines or demand a hearing.

The policies were sold through the NRA’s Carry Guard programme and give upfront money to policyholders for covered costs and expenses related to criminal defence for gun owners, even if the insured subsequently pleads guilty to or is convicted of a crime.

Washington state law prohibits insurance that covers criminal activity.

Since the product became available in April 2017, 811 policies were sold in Washington, totalling $260,000 in premiums. Of those policies, 255 consumers cancelled their policies and no claims have been made in the state.

Illinois Union Insurance is a subsidiary of Chubb Group and has indicated it will stop selling the liability policies nationwide in October 2019.

Nationally, the insurer has paid less than 1 cent in claims for every dollar collected in premiums in 2017 and 2018, according to figures provided to Kreidler’s office.

In April, Kreidler’s ordered the NRA to cease and desist from selling four Carry Guard liability insurance products through its website. The NRA solicited the policies in Washington state without an insurance producer license, a violation of state law. That order resulted from a consumer complaint. The NRA made changes to its marketing website in Washington to address Kreidler’s concerns.

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