By Jonathan Stempel
NEW YORK (Reuters) - New York's financial regulator on Wednesday filed civil charges accusing the National Rifle Association of offering insurance to its members without a license and concealing how it routinely kept some of their premiums for itself.
The state Department of Financial Services plans to seek civil fines and other remedies from the gun rights group at an April 6 hearing.
It announced the charges even as it defends against a May 2018 NRA lawsuit accusing the regulator and Governor Andrew Cuomo of "blacklisting" the group and threatening its survival by pressuring banks and insurers to stop doing business with it.
"Today's announcement is about politics, not protecting consumers," William Brewer, a lawyer for the NRA, said in a statement. "The NRA acted appropriately at all times."
Wednesday's charges focus mainly on the group's alleged ties since 2000 to insurance broker Lockton Cos, including the sale of 28,005 policies to New Yorkers and the NRA's receipt of more than $1.8 million in associated royalties and fees.
Lockton's policies included the NRA-branded "Carry Guard," which the regulator said offered policyholders unlawful liability coverage, including for criminal defense costs and "intentional" conduct in shooting incidents.
The NRA was also accused of misleadingly promising coverage for gun collectors, dealers, instructors, clubs and shows at the "lowest possible cost," when in fact the group typically kept between 13.7% and 21.9% of premiums paid.
Lockton was fined $7 million by the regulator in May 2018 over its involvement with Carry Guard.
"It would be highly unusual for a state to allow an insurance company to reimburse for an illegal activity," Cuomo told CNN in August 2018. "They call it 'murder insurance.'"
Brewer said the NRA did not underwrite, sell or administer insurance programs, and "like countless other affinity groups ... relied on insurance-industry experts to oversee and market products tailored for its members."
In the NRA's own lawsuit in Albany, New York, U.S. District Judge Thomas McAvoy has allowed the group to pursue its First Amendment free speech claims, saying "'gun promotion' advocacy is core political speech entitled to constitutional protection."
McAvoy has also dismissed the NRA's claims that it was targeted through "selective enforcement" of state insurance laws, and that Cuomo and former financial services superintendent Maria Vullo owe monetary damages.