§ 19-32-3 Requirements for offering guaranteed asset-protection waivers.
(a) GAP waivers may be offered, sold, or provided to borrowers in this state in compliance with this chapter.
(b) GAP waivers may, at the option of the creditor, be sold for a single payment, or may be offered with a monthly or periodic payment option.
(c) Notwithstanding any provision of the general or public laws to the contrary, any cost to the borrower for a guaranteed asset-protection waiver entered into in compliance with The Truth in Lending Act, 15 USC § 1601 et seq., and its implementing regulations, as they may be amended from time to time, must be separately stated and is not to be considered a finance charge or interest.
(d) A retail seller must insure its GAP waiver obligations under a contractual liability or other insurance policy issued by an insurer. A creditor, other than a retail seller, may insure its GAP waiver obligations under a contractual liability policy or other such policy issued by an insurer. Any such insurance policy may be directly obtained by a creditor, retail seller, or may be procured by an administrator to cover a creditor's or retail seller's obligations; provided, that retail sellers that are lessors on motor vehicles are not required to insure obligations related to GAP waivers on such leased vehicles.
(e) The GAP waiver remains a part of the finance agreement upon the assignment, sale, or transfer of such finance agreement by the creditor.
(f) Any creditor that offers a GAP waiver must report the sale of, and forward funds received on all such waivers to the designated party, if any, as prescribed in any applicable administrative services agreement, contractual liability policy, other insurance policy, or other specified program documents.
(g) Funds received or held by a creditor or administrator and belonging to an insurer, creditor, or administrator, pursuant to the terms of a written agreement, must be held by such creditor or administrator in a fiduciary capacity.
(P.L. 2016, ch. 530, § 1.)