(1) GAP waivers may be offered, sold or provided to borrowers in this state under this chapter.
(2) GAP waivers may, at the option of the creditor or administrator, be sold for a single payment or may be offered with a monthly or periodic payment option.
(3) Notwithstanding any other provision of law 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, shall be separately stated and is not to be considered a finance charge or interest.
(4) A retail seller or administrator shall 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. However, retail sellers that are lessors on motor vehicles are not required to insure obligations related to GAP waivers on such leased vehicles.
(5) The GAP waiver shall remain a part of the finance agreement upon the assignment, sale or transfer of such finance agreement by the creditor.
(6) Neither the extension of credit, the term of credit, nor the term of the related motor vehicle sale or lease may be conditioned upon the purchase of a GAP waiver.
(7) Any creditor or administrator that offers a GAP waiver shall 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.
(8) 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, shall be held by such creditor or administrator in a fiduciary capacity.
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