30-14-2203. Requirements for offering guaranteed asset protection waivers. (1) GAP waivers may be offered, sold, or provided to borrowers in this state in compliance with this part.
(2) 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.
(3) Any cost to the borrower for a guaranteed asset protection waiver entered into in compliance with the Truth in Lending Act, 15 U.S.C. 1601, et. seq., must be separately stated and is not considered a finance charge or interest.
(4) A retail 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 retail dealer of motor vehicles, may insure its GAP waiver obligations under a contractual liability policy or similar policy issued by an insurer. The insurance policy may be directly obtained by a creditor or a retail dealer of motor vehicles or may be procured by an administrator to cover a creditor's or retail dealer's obligations. However, retail dealers of motor vehicles that are lessors of motor vehicles are not required to insure obligations related to GAP waivers on leased vehicles.
(5) The GAP waiver remains a part of the finance agreement upon the assignment, sale, or transfer of the finance agreement by the creditor.
(6) The extension of credit, the term of credit, or the term of the related motor vehicle sale or lease may not be conditioned upon the purchase of a GAP waiver.
(7) A creditor that offers a GAP waiver shall report the sale of and forward funds received on all GAP 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 document.
(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 must be held by the creditor or administrator in a fiduciary capacity.