TITLE XXXIII-A
RETAIL INSTALLMENT SALES
Chapter 361-E
GUARANTEED ASSET PROTECTION WAIVERS
Section 361-E:1
361-E:1 Scope. –
I. The purpose of this chapter is to provide a framework within which retail sellers and sales finance companies may offer guaranteed asset protection waivers in New Hampshire.
II. This chapter shall not apply to:
(a) An insurance policy offered by an insurer under the insurance laws of this state; or
(b) A debt cancellation or debt suspension contract being offered in compliance with 12 C.F.R. part 37, 12 C.F.R. part 721, or other federal law.
Source. 2015, 207:7, eff. Sept. 4, 2015.
Section 361-E:2
361-E:2 Definitions. –
I. In this chapter:
(a) "Administrator" means a person, other than an insurer or creditor, that performs administrative or operational functions pursuant to guaranteed asset protection waiver programs.
(b) "Borrower" means any retail buyer, as defined in RSA 361-A:1, IX.
(c) "Creditor" means:
(1) Any retail seller, as defined in RSA 361-A:1, XII; or
(2) Any sales finance company, as defined in RSA 361-A:1, XIII; or
(3) The assignees of any of the foregoing to whom the credit obligation is payable.
(d) "Finance agreement" means a retail installment contract for the purchase of a motor vehicle governed by RSA 361-A.
(e) "Free look period" means the period of time from the effective date of the guaranteed asset protection (GAP) waiver until the date the borrower may cancel the contract without penalty, fees, or costs to the borrower.
(f) "Guaranteed asset protection waiver" or "GAP waiver" means a contractual agreement wherein a creditor agrees for a separate charge to cancel or waive all or part of amounts due on a borrower's finance agreement in the event of a total physical damage loss or unrecovered theft of the motor vehicle, which agreement shall be part of, or a separate addendum to, the finance agreement.
(g) "Insurer" means an insurance company licensed, registered, or otherwise authorized to do business under the insurance laws of this state.
(h) "Motor vehicle" means a motor vehicle, as defined in RSA 361-A:1, VII.
(i) "Person" includes an individual, company, association, organization, partnership, business trust, corporation, limited liability company, and every other form of legal entity.
II. The terms defined in this section are not intended to provide actual terms required in guaranteed asset protection waivers.
Source. 2015, 207:7, eff. Sept. 4, 2015.
Section 361-E:3
361-E:3 Requirements for Offering Guaranteed Asset Protection Waivers. –
I. 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.
II. 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. section 1601 et seq., and the regulations adopted thereunder, as amended from time to time, shall be separately stated and shall not be considered a finance charge or interest.
III. The GAP waiver shall remain a part of the finance agreement upon the assignment, sale, or transfer of such finance agreement by the creditor.
IV. Neither the extension of credit, the term of credit, nor the term of the related motor vehicle sale shall be conditioned upon the purchase of a GAP waiver.
V. 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.
Source. 2015, 207:7, eff. Sept. 4, 2015.
Section 361-E:4
361-E:4 Disclosures. –
Guaranteed asset protection waivers shall disclose, as applicable, in writing and in clear, understandable language that is easy to read, the following:
I. The name and address of the initial creditor and the borrower at the time of sale, the identity of any administrator if different from the creditor, and a statement that the initial creditor may assign the GAP waiver with the finance agreement to a sales finance company or other assignee.
II. The purchase price and the terms of the GAP waiver, including the requirements for protection, conditions, or exclusions associated with the GAP waiver.
III. That the borrower may cancel the GAP waiver within a free look period as specified in the waiver, and shall be entitled to a full refund of the purchase price, if no benefits have been provided.
IV. The procedure the borrower shall follow, if any, to obtain GAP waiver benefits under the terms and conditions of the waiver, including a telephone number and address where the borrower may apply for waiver benefits.
V. Whether or not the GAP waiver is cancellable after the free look period and the conditions under which it may be cancelled or terminated, including the procedures for requesting any refund due.
VI. That in order to receive any refund due in the event of a borrower's cancellation of the GAP waiver agreement or early termination of the finance agreement after the free look period of the GAP waiver, the borrower, in accordance with terms of the waiver, shall provide a written request to cancel to the creditor, administrator, or such other party. If the GAP waiver is being cancelled due to the termination of the finance agreement, a written notice to cancel shall be sent to the creditor, administrator, or other such party within 90 days of the occurrence of the event terminating the finance agreement.
VII. The methodology for calculating any refund of the unearned purchase price of the GAP waiver due, in the event of cancellation of the GAP waiver or early termination of the finance agreement.
VIII. That neither the extension of credit, the terms of the credit, nor the terms of the related motor vehicle sale, shall be conditioned upon the purchase of the GAP waiver.
Source. 2015, 207:7, eff. Sept. 4, 2015.
Section 361-E:5
361-E:5 Cancellation. –
I. Guaranteed asset protection waiver agreements may be cancellable or noncancellable after the free look period. GAP waivers shall provide that if a borrower cancels a waiver within the free look period, the borrower shall be entitled to a full refund of the purchase price, if no benefits have been provided. The free look period shall not be less than 30 days.
II. In the event of a borrower's cancellation of the GAP waiver after the agreement has been in effect beyond the free look period, the borrower may be entitled to a refund of any unearned portion of the purchase price of the GAP waiver unless the GAP waiver provides otherwise. In order to receive a refund, the borrower shall, in accordance with the terms of the waiver, provide a written request to cancel to the creditor, administrator, or other such party. If the GAP waiver is being cancelled due to the early termination of the finance agreement, the borrower shall provide a written request to the creditor, administrator, or other party, within 90 days of the event terminating the finance agreement. No refund shall be paid or credited if benefits have been provided.
III. If the cancellation of a GAP waiver occurs as a result of a default under the finance agreement or the repossession of the motor vehicle associated with the finance agreement, or any other termination of the finance agreement, any refund due may be paid directly to the creditor or administrator and applied as set forth in paragraph IV.
IV. Any cancellation refund under paragraphs I, II, or III, may be applied by the creditor as a reduction of the amount owed under the finance agreement, unless the borrower can show that the finance agreement has been paid in full.
Source. 2015, 207:7, eff. Sept. 4, 2015.