Lloyd’s Underwriters Agree to Settle Charges Related to NRA-Branded Insurance

December 21, 2018

In a December 20 consent order, 10 Lloyd’s of London underwriters have entered into an agreement to pay $5 million to the New York State Department of Financial Services (DFS) for underwriting fire arms liability insurance programs branded by the National Rifle Association (NRA).

Under the agreement, the underwriters agreed to pay the civil monetary penalty to DFS within ten days of executing the consent order.

Additionally, the underwriters agreed not to issue or deliver any insurance policies in New York State that provide liability coverage for bodily injury or property damage from use of a firearm. They also agreed not to enter into any agreement or program with the NRA to underwrite or participate in any affinity-type insurance program involving any line of insurance covering people or entities whose home state is New York. However, the consent order stated the NRA may purchase insurance from the underwriters for the sole purpose of obtaining insurance for the NRA’s own corporate operations.

In the consent order, the underwriters agreed to cancel existing policies and fully refund the insurance premiums for specific coverages canceled under the NRA Programs.

Since October 2017, DFS has been conducting an investigation into the involvement of the Corporation of Lloyd’s, underwriters, Lockton and the NRA in the NRA Programs and other matters, “including a review of thousands of pages of documents obtained from the Corporation of Lloyd’s, Underwriters, Lockton Affinity and the NRA, as well as other information obtained from relevant sources,” according to the consent order.

Insurance Journal reported in May that Lloyd’s of London had directed its underwriters to terminate any insurance programs they had with the NRA and to not enter into any new ones.

“The Lloyd’s Corporation has given very careful consideration as to whether syndicates at Lloyd’s should continue to insure programmes offered, marketed, endorsed or otherwise made available through the National Rifle Association of America,” Lloyd’s said in a previous statement.

The New York investigation into NRA’s insurance, in particular its Carry Guard personal liability insurance program for members, also previously resulted in fines for broker Lockton ($7 million) and insurer Chubb and its excess and surplus lines subsidiary, Illinois Union ($1.3 million), Insurance Journal previously reported. These two firms that administered and underwrote the Carry Guard program also signed agreements in which they acknowledged that the policies they offered violated state law and agreed to stop participating in membership programs with the NRA.

DFS declined to comment on the recent consent order with Lloyd’s. Lloyd’s did not respond to an emailed request for comment by press time.

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