(A)
- (1) A GAP waiver must include a term stating that if a borrower cancels the waiver within the free-look period, the borrower is entitled to a full refund if no benefits have been provided under the GAP waiver.
- (2) A creditor may not charge a fee to a borrower related to the cancellation of a GAP waiver.
(B) A GAP waiver may be either cancellable or noncancellable after the free-look period. A GAP waiver must include:
- (1) a statement of whether or not the GAP waiver is cancellable or noncancellable after the expiration of the free-look period; and
(2) if the waiver is cancellable, all of the following terms apply:
- (a) a statement that in the event of a borrower's cancellation of the GAP waiver or early termination of the finance agreement, the borrower may be entitled to a refund of any unearned portion of the purchase price of the waiver; and
- (b) the procedures by which a borrower may cancel the waiver. This term must include a requirement that if the underlying finance agreement is terminated, cancellation must be made by providing a written request to the creditor, manager, or other party within ninety days of the event terminating the finance agreement.
- (C) A cancellation refund under subsections (A) and (B) may be applied by the creditor as a reduction of the amount owed under the finance agreement unless the borrower shows that the finance agreement has been paid in full.
- (D) If the purchase price of the GAP waiver is not financed, the creditor shall either provide a refund directly to the borrower or provide the borrower the option to either receive a refund of the unearned purchase price directly or to have the refund applied to reduce the amount owed under the borrower's finance agreement.
HISTORY: 2015 Act No. 31 (S.441), Section 2, eff June 1, 2015.
Editor's Note
2015 Act No. 31, Section 3, provides as follows:
"SECTION 3. This act takes effect upon approval by the Governor and applies to all GAP waivers which become effective one hundred eighty days after the effective date."