Saturday, December 16, 2017 10:28:21 PM
Why is Lloyd’s of London Insuring American Guns?
The iconic British insurance market is good at pooling risk. But critics fear the policies it underwrites could fuel gun violence.
Over the years, Lloyd’s of London has insured everything from celebrity body parts to Richard Branson’s Virgin Galactic spaceship. Less well known, however, is that in the United States, Lloyd’s underwriters have taken on policies associated with a more common, yet arguably more dangerous risk: guns.
As gun violence continues to exact a steep price in the United States, leaving 26 dead in one shooting in Sutherland Spring, Texas, last month, the insurance industry’s role is drawing criticism from gun control advocates who claim that some policies may be providing what critics call “murder insurance.”
The National Rifle Association drew scrutiny from insurance regulators in October over its marketing of Carry Guard insurance, a product launched earlier this year and underwritten by Westchester, part of the Chubb insurance company, to cover the civil and criminal defense costs in the event a gun owner shoots someone in self-defense. While Carry Guard has earned some notoriety, less attention has been focused on how Lloyd’s underwrites several different types of NRA-endorsed firearms policies, ranging from personal liability to insurance for gun shows.
Lloyd’s can underwrite insurance that many insurance companies cannot because of the way it is set up: It operates as a marketplace in which underwriters come together as syndicates to pool risk. That brings together specialists in unusual areas, allowing it to insure things like the nose of a winemaker with a unique sense of smell.
That structure enables the Lloyd’s market to underwrite policies that other insurers may be hesitant to take on, like for firearms, according to experts.
“If there is an unusual or unpopular risk that needs to be met, someone somewhere in Lloyd’s is often willing to assess it and put a price on it. This applies to a wide range of insurance needs arising around the world,” said Andrew Duguid, the author of On the Brink: How a Crisis Transformed Lloyd’s of London.
And in the United States, those insurance needs include guns.
The National Rifle Association promotes a variety of insurance products for gun owners and gun show promoters through Lloyd’s, including products that cover costs stemming from criminal and civil defense suits against the policyholder. According to the NRA’s website, the self-defense policy includes coverage for defense costs and damages in a civil suit and reimbursement for criminal defense costs upon acquittal.
The policies advertised on the website remain up to date, said Dean Davison, the senior vice president and director of communications for Lockton Companies, which administers the NRA-endorsed insurance.
The NRA declined to comment; contacted by Foreign Policy, a Lloyd’s spokesman in London did not respond to requests for comment, while a spokeswoman in New York declined to comment on the policies.
It’s unclear how long the insurance policies have been offered, but it appears to be at least several years. In 2013, Insurance Journal noted that the NRA “offers an insurance program administered by Lockton and insured by Lloyd’s of London.”
http://foreignpolicy.com/2017/12/13/why-is-lloyds-of-london-insuring-american-guns/
The iconic British insurance market is good at pooling risk. But critics fear the policies it underwrites could fuel gun violence.
Over the years, Lloyd’s of London has insured everything from celebrity body parts to Richard Branson’s Virgin Galactic spaceship. Less well known, however, is that in the United States, Lloyd’s underwriters have taken on policies associated with a more common, yet arguably more dangerous risk: guns.
As gun violence continues to exact a steep price in the United States, leaving 26 dead in one shooting in Sutherland Spring, Texas, last month, the insurance industry’s role is drawing criticism from gun control advocates who claim that some policies may be providing what critics call “murder insurance.”
The National Rifle Association drew scrutiny from insurance regulators in October over its marketing of Carry Guard insurance, a product launched earlier this year and underwritten by Westchester, part of the Chubb insurance company, to cover the civil and criminal defense costs in the event a gun owner shoots someone in self-defense. While Carry Guard has earned some notoriety, less attention has been focused on how Lloyd’s underwrites several different types of NRA-endorsed firearms policies, ranging from personal liability to insurance for gun shows.
Lloyd’s can underwrite insurance that many insurance companies cannot because of the way it is set up: It operates as a marketplace in which underwriters come together as syndicates to pool risk. That brings together specialists in unusual areas, allowing it to insure things like the nose of a winemaker with a unique sense of smell.
That structure enables the Lloyd’s market to underwrite policies that other insurers may be hesitant to take on, like for firearms, according to experts.
“If there is an unusual or unpopular risk that needs to be met, someone somewhere in Lloyd’s is often willing to assess it and put a price on it. This applies to a wide range of insurance needs arising around the world,” said Andrew Duguid, the author of On the Brink: How a Crisis Transformed Lloyd’s of London.
And in the United States, those insurance needs include guns.
The National Rifle Association promotes a variety of insurance products for gun owners and gun show promoters through Lloyd’s, including products that cover costs stemming from criminal and civil defense suits against the policyholder. According to the NRA’s website, the self-defense policy includes coverage for defense costs and damages in a civil suit and reimbursement for criminal defense costs upon acquittal.
The policies advertised on the website remain up to date, said Dean Davison, the senior vice president and director of communications for Lockton Companies, which administers the NRA-endorsed insurance.
The NRA declined to comment; contacted by Foreign Policy, a Lloyd’s spokesman in London did not respond to requests for comment, while a spokeswoman in New York declined to comment on the policies.
It’s unclear how long the insurance policies have been offered, but it appears to be at least several years. In 2013, Insurance Journal noted that the NRA “offers an insurance program administered by Lockton and insured by Lloyd’s of London.”
http://foreignpolicy.com/2017/12/13/why-is-lloyds-of-london-insuring-american-guns/
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