Legislation has been proposed in the State of Rhode Island that would provide for the regulation of GAP Waivers in a manner consistent with the industry model law already enacted in a number of states.
Earlier this month, Rhode Island House Bill 7712 and its companion Senate Bill 2424 were introduced in this state. While various forms of creditors may offer GAP waivers, only retail sellers of motor vehicles that extend credit relating to the sale of their vehicles, would be required to insure their obligations under a contractual liability policy. Certain disclosures are required to be in the GAP waiver. Waivers offered in connection with a commercial transaction would be exempt from regulation under this legislation which also declares GAP waivers to not be insurance. No registration is required.
These bills propose a January 1, 2017 effective date.