RS 6:969.51

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RS 6:969.51

PART VIII. GAP COVERAGE

§969.51. GAP coverage; requirements

A. Debt waiver or debt forgiveness agreements may be offered, sold, or provided to consumers in this state in compliance with this Chapter.

B. Debt waiver or debt forgiveness agreements shall be sold for a single premium.

C. Notwithstanding any other provision of law to the contrary, any cost to a consumer for a debt waiver or debt forgiveness agreement entered into in compliance with The Truth in Lending Act, 15 U.S.C. 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 seller shall insure its debt waiver or debt forgiveness agreement's obligations under a contractual liability or other insurance policy issued by an insurer. A lender, other than a seller, may insure its debt waiver or debt forgiveness agreement's obligations under a contractual liability policy or other such policy issued by an insurer. Any such insurance policy may be directly obtained by a lender, seller, or may be procured by an administrator to cover a lender's or seller's obligations; however, sellers that are lessors on motor vehicles shall not be required to insure obligations related to debt waiver or debt forgiveness agreements on such leased vehicles.

E. The debt waiver or debt forgiveness agreement remains a part of the contract upon the assignment, sale, or transfer of such contract by the seller or lender.

F. 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 debt waiver or debt forgiveness agreement.

G. Any seller or lender that offers a debt waiver or debt forgiveness agreement 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.

Acts 2006, No. 280, §1; Acts 2010, No. 374, §1.