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Worse than taking away guns, New York threatens to take away NRA's insurance

FILE - In this July 17, 2017 file photo, New York Gov. Andrew Cuomo speaks during a rally in New York. (AP Photo/Mary Altaffer, File)

The National Rifle Association (NRA) is suing officials in New York for what it calls a "malicious conspiracy" to silence and essentially shut down the nation's most powerful Second Amendment lobbying organization by depriving it of access to insurance and financial services.

In a recent court filing, the NRA claimed it would it would "suffer irrecoverable loss and irreparable harm" and be rendered "unable to exist" if actions taken by New York's Governor Andrew Cuomo and the state's Superintendent of Financial Services Maria Vullo were allowed to stand.

"Our client is suffering setbacks with respect to the availability of insurance and banking services as a result of a political and discriminatory campaign meant to coerce financial institutions to refrain from doing business with the NRA," said William A. Brewer III, legal counsel to the NRA.

According to the NRA's complaint, Cuomo and Vullo engaged in a politically motivated "blacklisting" campaign to convince New York-based insurers and financial institutions that they could face fines or other penalties if they provide services to the controversial gun rights organization. "Simply put, Defendants made it clear to banks and insurers that it is bad business in New York to do business with the NRA," the lawsuit stated.

As a result of the threats made by the New York governor and regulators at the Department of Financial Services (DFS), the NRA reported that insurers and banks that previously partnered with the group are severing ties. That has threatened the group's ability to access banking services, obtain corporate insurance and media liability coverage, putting the NRA in imminent risk of shutting down its main communications platform, NRATV, as well as its other operations.

The National Rifle Association claims it has already lost tens of millions of dollars as a result of the actions in New York and is filing for an injunction and compensation for losses.

In a series of media appearances on Monday, Gov. Cuomo made no effort to hide his well-documented disdain for the pro-gun organization. "They don't get a lot of sympathy from me in general," Cuomo said on MSNBC's Morning Joe. "If they have less money to bully and threaten politicians into irrational positions, I'm not going to lose any sleep over that."

On Friday, Cuomo filed a motion to dismiss the NRA's lawsuit as "frivolous" and in a statement, denigrated the pro-gun organization for trying to "play the victim."

For many gun control advocates, the NRA's admission that it may soon be in a financially untenable situation was welcome news, particularly following a wave of student activism and NRA boycotts in response to the deadly school shooting in Parkland, Fla. earlier this year.

Activists, celebrities and politicians trolled the NRA on social media, reacting to the news by sending "thoughts and prayers" to the organization.

The NRA's lawsuit was based, in part, on an investigation started by DFS financial regulators in 2017 looking into the legality of Carry Guard, an NRA-marketed liability insurance for gun owners. After a year-long investigation, the DFS determined the NRA was illegally selling the insurance to its members to cover legal costs and other expenses related to "acts of intentional wrongdoing," including self-defense or crimes involving a legal firearm. The New York governor frequently referred to the coverage as "murder insurance."

In May, the state effectively banned the sale of Carry Guard and secured a consent agreement from the NRA's insurance partners, Lockton Cos LLC and Chubb Ltd. The two entities were fined $7 million and $1.3 million respectively and ordered to end their partnership with the NRA. The state further prohibited the insurers from entering into "any other agreement or arrangement" with the NRA.

On Monday, Cuomo issued a call to other governors across the country encouraging them to follow New York's lead in issuing a state-wide ban on Carry Guard insurance, which is still legally offered in every other state.

The NRA acknowledged it lost revenue from New York's decision to ban Carry Guard insurance, but the organization's legal counsel dismissed Cuomo's tactics as "public grandstanding" and part of a crusade to "fuel his political ambitions." Cuomo is up for reelection as governor in November and faces a liberal challenger, Cynthia Nixon.

However, Carry Guard is only one part of the NRA's lawsuit and does account for the organization's claims that the state of New York could drive the group out of existence.

In a statement to Circa, NRA counsel Brewer explained that Cuomo's campaign against the NRA "extends far beyond" gun owners' insurance. "His scorched earth tactics are designed to prohibit the NRA from having access to insurance and banking services – simply because he disagrees with the political viewpoint of this law-abiding organization."

Earlier this year, DFS Superintendent Vullo took direct steps to encourage the CEOs of financial institutions and insurance companies to cut ties with the NRA or other guns rights organizations, sending two separate guidance letters to the CEOs of New York-licensed insurance and financial institutions.

Vullo, whose department regulates the activities of more than 1,400 insurance companies and 1,900 banking entities in New York, encouraged CEOs to "review" and "continue evaluating their risks, including reputational risks, that may arise from their dealings with the NRA or similar gun promotion organizations" and "take prompt actions to managing these risks and promote public health and safety."

Vullo cited the boycott of the NRA by companies and financial institutions following the deadly mass-shooting at Marjory Stoneman Douglas High School in Parkland, suggesting other entities should join those who "already discontinued their arrangements with the NRA."

In response to the February 14 school shooting in Parkland, a handful of companies severed ties with the NRA amid widespread public demand to end gun violence. Delta and United Airlines ended their membership agreement with the NRA as did rental car providers Enterprise, Hertz, Avis and Budget. Symantec, TrueCar, MetLife insurers, SimpliSafe home security also ended their partnership and the First National bank of Omaha stopped offering an NRA-branded credit card.

After the DFS guidance letters were sent, Lloyd's of London announced it would stop offering insurance through the NRA.

The NRA also lost a contract it had been negotiating for months to renew its general corporate liability insurance. Citing the DFS threats and the penalties imposed on Lockton and Chubb, the insurer severed ties with the NRA and stated it was "unwilling to renew coverage at any price."

Nearly every insurance carrier has shunned a partnership with the NRA following the DFS threats and actions, a state of affairs that the NRA said it believes fundamentally threatens the organization's existence.


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