N.J. insurance regulator fines Lockton Affinity $1 million
Lockton Affinity has agreed to pay a $1 million fine for administering a National Rifle Association-sponsored insurance program.
Lockton Affinity has agreed to pay a $1 million fine as part of a consent order with the New Jersey Department of Banking and Insurance (NJDBI) for administering a National Rifle Association-sponsored insurance program that the NJDBI alleged was in violation of state insurance laws.
In a statement, the NJDBI explained that an investigation found that Kansas-based Lockton Affinity violated various state laws and regulations in administering the Carry Guard insurance program in New Jersey on behalf of the NRA.
The NJDBI found that Lockton Affinity, a licensed insurance producer that contracted with the NRA, permitted the NRA to directly market and solicit for the Carry Guard insurance program in New Jersey. 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. According to the NJDBI, it is a violation of state regulation for a licensed insurance producer to permit or allow any unlicensed person to transact the business of an insurance producer in the state.
“The marketing and solicitation of a product that encourages firearms use, as carried out by the NRA and permitted by Lockton Affinity, in contravention of state laws is a serious violation. As regulators we have a responsibility to ensure that companies that profit from having guns on the streets are not conducting business in our state in violation of the law,” said Commissioner Marlene Caride.
“Entities regulated by the department are expected to fully comply with the statutory and regulatory requirements of the state and will be held accountable if they fail to do so,” added Commissioner Caride. “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.”
The NJDBI explained that although Lockton Affinity is licensed by the NJDBI as a nonresident insurance producer with various lines of authority including surplus lines, the NRA is not licensed as an insurance producer in New Jersey.
The NJDBI said that its investigation found that the Carry Guard website maintained and hosted by the NRA and emails sent by the NRA were solicitations of insurance by an entity not licensed as an insurance producer in New Jersey.
Moreover, according to the NJDBI, the Carry Guard self-defense insurance program included benefits for health insurance although state law prohibits surplus lines insurers from writing health insurance. Further, the NJDBI asserted, Lockton Affinity did not execute a separate agreement with the New Jersey Carry Guard certificate holders for the administrative fee retained by Lockton Affinity, as required by state law.
In addition to paying the fine, Lockton Affinity must take necessary steps to prevent any future solicitation of insurance by unlicensed persons or entities for insurance products for which Lockton Affinity is the producer.
The NJDBI said that it is continuing to investigate other firearm-related insurance programs for potential violations of state insurance laws.
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