Debt waiver obligations, insuring of by retail sellers and creditors, requirements
When a business sells a debt waiver to a customer, the business has to get insurance to back up that promise. If the finance agreement gets sold or handed off to someone else, the debt waiver still stays part of the deal. Businesses that offer debt waivers have to report those sales and send any money owed to the right people. Any money held on behalf of others has to be kept safe and treated like it belongs to those other people.
407.2035. obligations, insuring of by s and , requirements. — 1. (1) A retail seller shall insure its debt waiver obligations under a contractual or other insurance policy issued by an . A , other than a retail seller, may insure its debt waiver obligations under a or other such policy issued by an insurer. Any such insurance policy may be directly obtained by a creditor or retail seller or may be procured by an to cover a creditor's or retail seller's obligations.
(2) the of (1) of this , retail sellers who are lessors on motor vehicles shall not be required to insure obligations related to debt waivers on such leased motor vehicles.
2. The debt waiver remains a part of the upon the , sale, or of such finance agreement by the creditor.
3. Any creditor who offers a debt waiver shall report the sale of, and forward funds due to, the or parties.
4. Funds received or held by a creditor or administrator and belonging to an insurer, creditor, or administrator shall be held by such creditor or administrator in a .
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Source & history notes
(L. 2023 S.B. 398)
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