NRA troubles exposed in court filing

[MacGyver]

The NRA finds themselves increasingly cut off from being able to access insurance markets and financial services as carriers and banks seek to cut ties.  Couple this with the fact that they overspent by $46M in 2016, and they're in deep financial trouble - enough that they claim that they may be "unable to continue to exist." in a recent court filing.

A lot of this stems from the Carry Guard Insurance being declared invalid by a recent regulatory action.  Couple that with the optics of recent shootings and now their General Liability carrier won't renew their coverage either.

Court filing below, followed by an article from Rolling Stone describing the same:

https://drive.google.com/file/d/15Ld2KEw6SqsvhOYgKUl3SXFTDoz4J3IA/view

https://www.rollingstone.com/politics/politics-news/nra-financial-trouble-706371/

[bersaguy]

I just got a renewal in the mail yesterday and I just renewed two months ago. Makes me wonder if the right hand knows what the left hand s doing with them these days.

[DaveTN]

I’m a little confused. Como and the State of New York stopping “Carry Guard” and restricting access to financial institutions is going to cause the NRA to fold?

[Chucktshoes]

19 minutes ago, DaveTN said:

I’m a little confused. Como and the State of New York stopping “Carry Guard” and restricting access to financial institutions is going to cause the NRA to fold?

The NRA is claiming that NY is exerting pressure on insurance carriers and banks not to do any business with the NRA at all. 

[Erik88]

48 minutes ago, MacGyver said:

enough that they claim that they may be "unable to continue to exist.

Wow. I wonder if that's an exaggeration or not. 

[Omega]

Seems a tactic that all the, Dicks, Yeti, Bank of America etc, corporations are using to cut the supply line and financial services to gun manufacturers and other related businesses.  It would be a good business venture to start a Gun Owners Credit Union, Store Franchise and other 2A supported businesses. Would anyone bank at a NRA Credit Union, Get an NRA Home/Auto Insurance policy, shop at the NRA Sporting Goods store??

[btq96r]

The NRA may have a case here...partly.  I doubt they have a case in proving they have a right that NY State is interfering with regarding Carry Guard, or other optional items that would be defined as a perk or service, but not part of their core mission that gives them non-profit status.

Where they do have a case (and I think a decent one) is in trying to show how NY State is blocking their ability to receive financial services essential to operate from banks and insurance companies, a reasonable point to be made that so many are based in , and do business in NY State, and that NY State is denying them essential support services for their protected speech needed as part of their core mission by pressuring those businesses into compliance.  The stick in this case being a loss of their ability to operate in NY State, which isn't an option for companies like that.  Big legal hurdle for the NRA to prove, but not impossible if you get enough company reps under oath to testify.

Also, this may seem a soft spoken letter, and there is no specified threat, but in NY State politics, it's easy enough to riddle the meaning behind the cordial tone in this letter from the state's Department of Financial Services.  Still, as the plaintiff, it's on the NRA to establish malice, and the politicians in NY State have decades of experience at how to skirt the edges of the law without going over the cliff.

https://www.dfs.ny.gov/legal/dfs/DFS_Guidance_Risk_Management_NRA_Gun_Manufacturers-Insurance.pdf

I'm a bit skeptical about their financial claims because it's the NRA and they always try to make it seem like they need money now to beat back the anti-gun machine.  Making those claims seems a mistake, as it opens the full scope of their books up for discovery, not just their publicly disclosable requirements.  This lawsuit may give NY State license to take a lice comb to their financial records.

Finally, whoever wrote the motion must also be with the ILA.  The snarky language would have been best left out of a legal document like this, it does no good, and could dilute the message of law and fact they're trying to establish. 

[DaveTN]

15 minutes ago, Chucktshoes said:

The NRA is claiming that NY is exerting pressure on insurance carriers and banks not to do any business with the NRA at all. 

I see. So I guess the NRA is saying they can’t find insurance companies or financial institutions that don’t care if they do business with the state on New York??

I can’t help but think maybe this is mainly over “Carry Guard”?? I just don’t believe that any of those insurance policies is going to pay your legal bills in a bad shoot. I’m sure they get a lot of laughs if they are trying to outsource that to insurance companies and get a reasonable price.

[Omega]

2 minutes ago, DaveTN said:

I see. So I guess the NRA is saying they can’t find insurance companies or financial institutions that don’t care if they do business with the state on New York??

I can’t help but think maybe this is mainly over “Carry Guard”?? I just don’t believe that any of those insurance policies is going to pay your legal bills in a bad shoot. I’m sure they get a lot of laughs if they are trying to outsource that to insurance companies and get a reasonable price.

I think it started with Carry Guard, but the linked PDF is pretty straight forward IMO in telling NY companies to cut ties with the NRA and other Gun related business/organization. 

[MacGyver]

At the end of the day, insurance is about transferring risk. Insurance carriers tell toxic companies that they will not write their risk at any price all the time.

If there’s a relationship with a broker, or they think everybody else is taking a hard pass you may have a carrier throw a really high number out there just to see how desperate they are.  

But, underwriting insurance policy is making a subjective decision on the toxicity of a business at the end of the day.

It certainly affects your ability to do business. You can’t get access to some financial products or markets without it. You can’t raise debt.  Certain liabilities may pass through to the directors and officers. It’s a big deal.

At the end of the day - while you may not like it, this is how our capitalist system works. You have private organizations  telling other private organizations that “we collectively” think you are too toxic to work with and so we aren’t going to take this risk.

They are claiming this was spurred on by the regulatory action on Carry Guard, but this really is close to Adam Smith’s invisible hand at work.

[Omega]

1 hour ago, MacGyver said:

At the end of the day, insurance is about transferring risk. Insurance carriers tell toxic companies that they will not write their risk at any price all the time.

If there’s a relationship with a broker, or they think everybody else is taking a hard pass you may have a carrier throw a really high number out there just to see how desperate they are.  

But, underwriting insurance policy is making a subjective decision on the toxicity of a business at the end of the day.

It certainly affects your ability to do business. You can’t get access to some financial products or markets without it. You can’t raise debt.  Certain liabilities may pass through to the directors and officers. It’s a big deal.

At the end of the day - while you may not like it, this is how our capitalist system works. You have private organizations  telling other private organizations that “we collectively” think you are too toxic to work with and so we aren’t going to take this risk.

They are claiming this was spurred on by the regulatory action on Carry Guard, but this really is close to Adam Smith’s invisible hand at work.

I don't hear any Automobile company insurers refusing to underwriting their risk.  And with all these safety recalls, for things that caused injuries and deaths which have more risk than any NRA insured products, nobody has sent the insurance and banking industries any memos.

[MacGyver]

Auto insurers refuse individual risks all the time.  Get three DUI’s and try to find coverage.  

This isn’t about that, though.  I deal with commercial insurance daily.  This is about carriers expecting to see liabilities at an organizational level - probably followed by years of litigation, and they just want off the risk.  

Insurance carriers are by their very nature risk averse when they don’t have data that lets them price a risk.  

I might not like it, but I totally understand why they’d take a pass.  

[peejman]

5 hours ago, btq96r said:

...that NY State is denying them essential support services for their protected speech needed as part of their core mission by pressuring those businesses into compliance. ....

Good thing collusion isnt a crime anymore. 

Sorry, I couldn't resist.    

[A.J. Holst]

16 hours ago, MacGyver said:

Auto insurers refuse individual risks all the time.  Get three DUI’s and try to find coverage.  

This isn’t about that, though.  I deal with commercial insurance daily.  This is about carriers expecting to see liabilities at an organizational level - probably followed by years of litigation, and they just want off the risk.  

Insurance carriers are by their very nature risk averse when they don’t have data that lets them price a risk.  

I might not like it, but I totally understand why they’d take a pass.  

Mac, do you think this is their excuse to exit the insurance biz?

Not being able or willing to underwrite in one state (NY in this case) shouldn't impact the entire book of business.

I guess it's possible current underwriters are unwilling to accept shifting liability from NY carriers.

My wife worked for Zurich / Universal Underwriters - definitely understand too toxic at any price!

[DaveTN]

 

Quote

 

https://www.cnbc.com/2018/02/23/florida-shootings-may-complicate-insurance-for-gun-owners.html

Florida shootings may complicate insurance for gun owners.

Insurance company Chubb said on Friday that it will stop underwriting a National Rifle Association-branded insurance policy for gun owners.
The insurance aims to help gun owners cover legal costs when they use their firearms for self defense.
Owners need to carefully evaluate their coverage, particularly liability through their homeowners' insurance.

Gun owners who want specialized insurance for their firearms may have less access to one kind of policy following a shooting massacre in Florida last week.

Insurance company Chubb said on Friday that it will stop underwriting an insurance policy for gun owners called NRA Carry Guard. The National Rifle Association-branded insurance covers gun owners in the event they face legal repercussions following firearm incidents.

"Three months ago, Chubb provided notice of our intent to discontinue participation in the NRA Carry Guard insurance program under the terms of our contract," Chubb said in a statement.

The announcement follows a Feb. 14 shooting that killed 17 people at the Marjory Stoneman Douglas High School in Parkland, Florida.
The NRA began selling its current line of Carry Guard insurance last year. The policies aim to help individuals who use firearms for self-defense cover their legal expenses.

The policies start at $13.95 per month, or $154.95 annually, for $250,000 in civil protection and $50,000 in criminal defense protection.

The highest-level coverage costs $49.95 per month, or $549.95 annually. It includes up to $1.5 million in civil protection and $250,000 in criminal defense protection.

The policies target gaps that homeowners' policies do not cover. That includes "unexpected procedures and costs associated with proving you acted in self defense," the NRA states on its website. That could be costs associated with civil and criminal legal defenses, bail payments, legal retainer fees, and replacement of firearms, among other items.

The United States Concealed Carry Association, or USCCA, also provides liability insurance.

"Even in a crystal clear self-defense case, you're often charged with a crime," said Tim Schmidt, president and founder of USCCA.

USCCA's policies start at $22 per month, or $247 per year, for $500,000 in civil suit defense and damages coverage and $100,000 in criminal defense protection. The highest level of coverage costs $47 per month, or $497 per year, for $2 million in civil suit defense and damages coverage and $250,000 in criminal defense protection. The organization currently has about 270,000 individual policy owners.

"I think there is kind of a rebirth of new people coming into the concept of wanting to be responsibly armed," Schmidt said.

Opponents have criticized the coverage as "murder insurance." A call to the NRA was not immediately returned.
Gun owners generally will be covered for liability under their homeowners' or renters' insurance policies, according to Peter Kochenburger, deputy director of the Insurance Law Center at the University of Connecticut School of Law.

"You're covered for your negligence if you injure someone or if you damage property," Kochenburger said.

Those policies typically do not exclude accidents related to firearms, he said.

However, rules for these policies vary by state. If an exclusion for gun-related incidents were to be included in a policy, it would need to have been approved by a state's regulator.

"If you intentionally damage property or injure someone, you don't get insurance coverage," Kochenburger said. "We as a society don't want someone to engage in an illegal act and not have to pay the consequences [of their actions]."

In 2013, three states – Massachusetts, New York and Hawaii – tried to make liability insurance mandatory for gun owners, according to Michael Barry, head of media and public affairs at the Insurance Information Institute, an industry-funded consumer education organization.

"The difficulty is that it would be very difficult for insurers to underwrite," Barry said. "I think pricing a policy like this would be very difficult to do."

Victims of a violent assault, however, can receive compensation through a homeowner's insurance policy. In 2015, Sandy Hook school shooting victims' families received $1.5 million through the estate of Nancy Lanza, the mother of shooter.

Individuals who own guns need to think through their insurance coverage, particularly for liability, carefully.

"That split second [decision] of whether to shoot or not, it's hard to imagine that whether they have insurance or not is a thought in their mind," Kochenburger said.

 

 

I have always thought these insurance companies, no matter who is offering it, is not being straightforward in their advertising. From the posts I have seen on various forums gun owners seem to think that if they are charged with a crime this insurance will cover their legal costs. I am not an attorney, but I doubt that. It might if it is determined in court they were justified, but if convicted or making a plea bargain; I doubt it.

At one time (a long time ago) I searched and could not find a documented case of any of these policies paying for defense costs in a criminal trial, much less with a conviction.

Maybe one of our forum attorneys that have experience with this in Tennessee will comment, as I’m sure state laws probably vary.

However, I still don’t know why dropping this insurance would put the NRA at risk.

 

[Moped]

I don't think it's just the insurance, but financial institutions across the board. The State of New York as also warned banks that are HQ'ed in the State to not do business with the NRA.  A lot of businesses take short term loans to meet payroll and then pay it off the next week.  If the NRA uses such a system and is unable to secure said loans, than that may put a serious strain on their resources.

Of course, this is all posturing by the NRA's attorneys as well.  They want to paint the bleakest picture possible in order to gain support from the court system. 

I would be real surprised is the NRA isn't still up and running in the next 10 years.