NRA-affiliated insurance is banned in Washington
Illinois Union Insurance has been ordered to stop underwriting policies branded under the NRA as self-defense policies.
The insurance commissioner of the state of Washington, Mike Kreidler, has banned the sale of insurance policies branded by the National Rifle Association (NRA) and will fine two companies involved in underwriting and selling them in the state.
Related: NRA-branded insurance program is unlawful, N.Y. regulators say
Commissioner Kreidler ordered Illinois Union Insurance Company to stop underwriting the policies, branded under the NRA as self-defense policies. According to the commissioner, they are illegal in Washington because they insure unlawful activity.
Commissioner Kreidler also imposed a fine on the company of $102,000 for selling 811 of the policies to Washington consumers.
In addition, Commissioner Kreidler is seeking to fine Lockton Affinity L.L.C. $75,000. Lockton Affinity is the licensed insurance producer that sold the policies on behalf of the NRA.
‘Attempt to insure criminal act’
“When it comes to insurance products associated with the NRA, it’s buyer beware,” Commissioner Kreidler said in a statement. “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 commissioner explained that the policies were sold through the NRA’s Carry Guard program and give upfront money to policyholders for covered costs and expenses related to criminal defense 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.
811 policies were sold in Washington, no claims made
Since the product became available in April 2017, 811 policies were sold in Washington, totaling $260,000 in premiums. Of those policies, 255 consumers canceled their policies and no claims have been made in the state.
Illinois Union Insurance Company, a subsidiary of Chubb Ltd. Group, has indicated it will stop selling the liability policies nationwide in October 2019.
Related: N.Y. regulator fines insurers, broker over NRA-branded gun owner liability policies
oNationally, the insurer has paid less than one cent in claims for every dollar collected in premiums in 2017 and 2018, according to figures provided to Commissioner Kreidler’s office.
NRA solicited policies without an insurance producer license
In April, Commissioner Kreidler 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 without an insurance producer license, a violation of state law, according to the commissioner. That order resulted from a consumer complaint. The NRA made changes to its marketing website in Washington to address Commissioner Kreidler’s concerns.
Fines assessed against insurance companies, agents and brokers are deposited in the state’s general fund to pay for state services.
Related: NRA sues insurance broker behind ‘Carry Guard’
Steven A. Meyerowitz, Esq., (smeyerowitz@meyerowitzcommunications.com) is the director of FC&S Legal and editor-in-chief of the Insurance Coverage Law Report.