NRA leaders will soon face greater personal risk in overseeing the organization.
Lloyd’s of London will not renew the group’s directors and officers insurance when coverage ends in August, according to multiple sources. The NRA is creating a new $5 million fund to cover potential lawsuits against executives and board members while it searches for a replacement policy. The money will be drawn from current NRA investments.
NRA board member Phillip Journey told The Reload the fund was announced during the closed executive session of the gun group’s Saturday board meeting. He said board members were authorized to talk about it after the session ended, though. He believes the fund was created to alleviate concerns about liability raised by a number of board members.
“It was apparent from the comments that there are several board members that have expressed concerns,” Journey said. “This was their attempt to address the concern, knowing that the policy expires in, golly, less than 40 days.”
Lloyd’s did not respond to a request for comment. The elite business group has a reputation for insuring high-risk clients, and Journey said its decision not to renew the NRA’s policy is bad news.
“I mean, if Lloyd’s won’t insure you, who the hell will?” he said.
A second source with knowledge of the Lloyd’s move called it a “bombshell” likely driven by the risk NRA leaders could face lawsuits related to their management of the organization. This is a major question in light of the suit brought by New York Attorney General Letitia James (D.).
“Underwriters have to assess risk, and when they look at the NRA, they think the risk is too high,” the source, who asked not to be named for fear of reprisals, told The Reload. “They’re still trying to find insurance, but I don’t know that they’re going to be successful.”
The NRA did not dispute claims that Lloyd’s has decided not to renew the group’s directors and officers insurance once its term expires next month, but it said the policy is currently in good standing.
“As a matter of policy, the NRA does not typically discuss the administrative or personal affairs of its board of directors,” Wit Davis, counsel to the NRA Board of Directors, told The Reload. “The NRA can confirm its insurance policies are in good standing. That said, the Association is constantly exploring ways to maximize the value of its insurance needs.”
The NRA was mostly silent about its legal predicaments in the open session of its Saturday board meeting. The failed bankruptcy the group spent tens of millions to pursue was not mentioned, and neither was the New York corruption suit the bankruptcy strategy was meant to counteract.
Letitia James’s suit continues to cast a shadow over the gun group. An outspoken political opponent of the NRA, James is asking a New York judge to dissolve the $400 million organization. She might go after board members and executives, including CEO Wayne LaPierre, for allegedly allowing millions of dollars worth of the organization’s money to be spent on personal expenses such as private flights, luxury suits, and extravagant international trips.
“I think it’s apparent from the New York Attorney General’s pleadings that she is going to try to pursue her statutory duty to recover as much money as she can from those the court finds have breached their fiduciary duty to the members,” Journey said. “The New York court can appoint a receiver who would pursue those types of claims as well. It’s one way or the other, perhaps both.”