17:16BB-3 Conditions for offer of GAP waiver.
3. a. A GAP waiver may be offered, sold or provided to borrowers in this State in compliance with the provisions of this act.
b. A GAP waiver 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 other provision of law, any cost to the borrower for a GAP waiver entered into in compliance with the Truth in Lending Act (15 U.S.C. s.1601 et seq.) and its implementing regulations, as they may be amended from time to time, shall be separately stated and shall not be considered a finance charge or interest.
d. A dealer of motor vehicles shall insure its GAP waiver obligations under a contractual liability or other insurance policy issued by an insurer. A creditor, other than a dealer, may insure its GAP waiver obligations under a contractual liability policy or other policy issued by an insurer. Any insurance policy may be directly obtained by a creditor, dealer, or may be procured by an administrator to cover a creditor's or dealer's obligations. However, dealers that are lessors of motor vehicles are not required to insure obligations related to GAP waivers on those leased vehicles.
e. The GAP waiver shall remain a part of the finance agreement upon the assignment, sale or transfer of that finance agreement by the creditor.
f. Neither the extension of credit, the terms of the credit, nor the terms of the related motor vehicle sale or lease may be conditioned upon the purchase of a GAP waiver.
g. Any creditor that offers a GAP waiver shall report the sale of, and forward funds received on, all 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.
h. 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 that creditor or administrator in a fiduciary capacity.
i. The total physical damage loss of a borrower's motor vehicle shall be determined in accordance with the terms of the borrower's primary motor vehicle insurance policy. In instances in which the borrower has no primary motor vehicle insurance or in which the primary motor vehicle insurer is insolvent at the time of loss, then a total loss shall be determined in accordance with the terms of the GAP waiver.
L.2017, c.82, s.3.
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