Minnesota Passes Legislation to Exclude Guaranteed Asset Protection Waiver Policies from Insurance Definition
On June 13, Governor Mark Dayton (D-MN) signed into law H.F. 3/Chapter 1, which, in part, excludes Guaranteed Asset Protection (GAP) waiver policies from the definition of insurance. Effective August 1, the act specifies that the GAP waiver statute will not apply to certain insurance law requirements, including those relating to: (i) commercial deals; (ii) a debt cancellation or debt suspension contract; and (iii) credit life, credit accident and health, and credit involuntary unemployment. The act also allows for GAP waivers to be sold for either a single payment or as a monthly periodic payment. Finally, the act includes certain GAP waiver disclosures, such as cancellation of the GAP waiver by the borrower within the free look period, which is no less than 30 days.