(Reuters) - Insurer Chubb Ltd and a unit have agreed to pay a total of $1.3 million to New York State’s insurance regulator over their role in a National Rifle Association (NRA) insurance program, the regulator said on Monday.
The settlement follows an investigation by the New York State Department of Financial Services (NYDFS), which found that the NRA’s “Carry Guard” insurance program “unlawfully provided liability insurance to gun owners for acts of intentional wrongdoing,” the regulator said in a statement.
The insurance, underwritten by Chubb unit Illinois Union Insurance Company, also “improperly provided” legal services for policyholders who faced criminal charges after using their guns in self defense, the regulator said.
“Chubb recognizes its responsibility to ensure that its policies comply with New York law,” the company said in a statement. “Chubb at all times intended and believed its coverage to be in full compliance with New York law.”
The NRA, a gun advocacy group, “acted appropriately at all times,” said William A. Brewer III, a Dallas-based lawyer who represents the group.
The settlement follows decisions by numerous companies to sever corporate partnerships the NRA.
National debate has heated up over the issue of gun control, and the NRA’s role in opposing it, since Feb. 14, when a former student killed 17 people at Marjory Stoneman Douglas High School in Parkland, Florida, using an AR-15 assault rifle he had purchased legally.
In addition to the fine, Illinois Union agreed not to participate in the Carry Guard insurance program, or any similar program in New York, nor to provide Carry Guard or similar policies to New York residents, regardless of where they are written, the DFS said.
Illinois Union is also not allowed to issue policies for New York residents that provide legal services coverage in a civil or criminal proceeding.
On May 2, the New York regulator fined insurance broker Lockton Cos LLC $7 million for serving as the “Carry Guard” program administrator.
In February, Chubb Ltd said it had given notice to the NRA late last year of its plan stop underwriting the “Carry Guard” program.
Lockton said in February it would no longer sell NRA-endorsed products.
The NRA, on Monday, sued Lockton in a U.S. trial court in Alexandria, Virginia, saying it had breached its contract with the group.
A Lockton spokesman declined to comment.
Reporting by Suzanne Barlyn; Editing by David Gregorio