The National Rifle Association late last year quietly ended its pursuit of a judgment against U.S. insurance broker Lockton Inc. over the distributor's handling of the NRA's Carry Guard affinity insurance product that New York and some other states have banned.

Lockton and the NRA agreed to drop the federal court case in mid-November 2018, without stipulating terms beyond that each side agreed to bear its own incurred costs, according to court filings and industry sources. The Virginia-based gun rights advocacy group had claimed that Lockton breached longstanding contractual obligations requiring it to ensure that its policy offerings complied with all local laws — assertions that Lockton denied.

In response to the lawsuit, filed in Virginia, Lockton claimed that the NRA's political activity, "inflammatory approach" and "provocative public stances" had stirred up regulatory scrutiny. The broker also claimed that it had abided by its obligations. A New York insurance industry official said the case had been withdrawn quietly late last year, a development previously noted by firearms-focused website The Trace in late November.

A source familiar with the matter said that although the two sides reached an out-of-court settlement of their differences, Lockton still intends to discontinue brokerage services for NRA-endorsed insurance programs.

Representatives of the NRA did not respond to requests for comment.

Carry Guard offers coverage of certain expenses that result from defending against criminal charges involving the use of a gun in purported self defense. Chubb Ltd.'s Illinois Union Insurance Co. has underwritten the policies but agreed to halt sales nationwide by October 2019, according to Washington state Insurance Commissioner Mike Kreidler. Lockton Affinity LLC had handled distribution.

Washington on Jan. 15 became the latest state to ban Carry Guard policies, with Kreidler declaring that the insurance is illegal because it covers unlawful activity. New York and California previously barred sales of the policies.

Kreidler in April 2018 issued a cease and desist order against the NRA, ordering the group to stop marketing Carry Guard policies online. The NRA says it has more than 5 million members.

The NRA in May 2018 also sued the New York State Department of Financial Services as well as Gov. Andrew Cuomo and DFS Superintendent Maria Vullo, claiming violations of its constitutional rights and a politically motivated campaign against it. In an amended complaint filed in July, the NRA said Cuomo and Vullo warned financial institutions that the DFS regulates to cut ties with the influential group "if they planned to do business in New York."

The NRA said the warning and associated "back-channel communications" told "banks and insurers that it is bad business in New York to do business with the NRA." The "blacklisting campaign" led multiple companies to cut business ties with the NRA, the group claimed, saying its "corporate existence and its advocacy mission" were at stake.

Then-New York Attorney General Barbara Underwood responded to the NRA's action in November 2018 by denying many of its allegations, claiming that the organization failed to state an actionable claim and that Cuomo and Vullo are "entitled to immunity" as state officials. She asked the court in Albany to dismiss the NRA's complaint.

"At all relevant times defendants acted under the reasonable belief that their conduct was in accordance with clearly established law," Underwood argued in the response. "They are, therefore, protected under the doctrine of qualified immunity."

Additionally, Underwood alleged that the NRA violated New York law "by marketing insurance without a license" and that Chubb and Lockton violated state law, while saying nothing in the settlements involving both companies violates the NRA's rights. Underwood also claimed that guidance letters sent by Vullo to other New York institutions "were issued as part of the clear regulatory authority held by the superintendent and the Department of Financial Services."

Finally, she said the Constitution's First Amendment protects statements by Cuomo and Vullo that are cited in the NRA's complaint.

U.S. District Court Judge Thomas J. McAvoy set a deadline of July 22, 2019, for pretrial motions and ordered a status update from lawyers for both sides in late March. In his Dec. 27, 2018, order, McAvoy said a trial in the case, number 18-cv-566, is anticipated to last five days.

Last year, Vullo slapped Lockton with a $7 million penalty for its involvement with the Carry Guard program and hit Chubb and its Illinois Union unit with a $1.3 million penalty for its role as Carry Guard underwriter. Chubb has also said it would cease doing business with the gun-rights group. In Washington, Kreidler sought a $102,000 fine from the carrier and a $75,000 penalty against Lockton.

Underwood, New York's solicitor general, served as acting attorney general following the resignation of Eric Schneiderman in 2017. Letitia James took office Jan. 1 after winning November's election, and Underwood returned to her previous role.