                                 CODE OF VIRGINIA

REQUIREMENTS FOR OFFERING GUARANTEED ASSET PROTECTION WAIVERS (§ 38.2-6401)

A. Guaranteed asset protection waivers may be offered, sold, or provided to
borrowers in the Commonwealth in compliance with this chapter.

B. 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.

C. Notwithstanding any other provision of law, any cost to the borrower for a
GAP waiver entered into in compliance with the federal Truth in Lending Act, 15
U.S.C. &#xA7; 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 retail seller shall insure its GAP waiver obligations under a contractual
liability or other insurance policy issued by an insurer. A creditor, other than
a retail seller, may insure its GAP waiver obligations under a contractual
liability policy or other policy issued by an insurer as provided in &#xA7;
38.2-6402. Any such insurance policy may be directly obtained by a creditor or
retail seller or may be procured by an administrator to cover a creditor&#8217;s
or retail seller&#8217;s obligations. However, retail sellers that are lessors
on motor vehicles are not required to insure obligations related to GAP waivers
on the leased vehicles.

E. The GAP waiver shall remain a part of the finance agreement upon the
assignment, sale, or transfer of the finance agreement by the creditor.

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
GAP waiver.

G. Any creditor that offers a GAP waiver shall report the sale of GAP waivers
and shall forward funds received on all GAP 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.

H. 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 the creditor or administrator in a fiduciary capacity.

HISTORY: 2019, cc. 799, 800.