Legislation to enact the industry “model” relating to offering Guaranteed Asset Protection (“GAP”) waivers was recently introduced in the State of Mississippi. House Bill 1195 would provide a clear statutory framework within which GAP waivers could be offered in this state.
The legislation defines and distinguishes various types of creditors that may offer GAP waivers and would require that “retail sellers” of motor vehicles insure their GAP waiver obligations under an appropriate reimbursement insurance policy. A creditor, other than a retail seller of vehicles, would not be required to insure GAP waivers offered in connection with leased vehicle. The bill also requires specific consumer disclosures in a GAP waiver.
No registration would be required for any type creditor offering GAP waivers nor is registration proposed for administrators of GAP programs. If enacted, enforcement of the new law would fall under the Office of the Attorney General, Consumer Protection Division.