§ 45-1106 — Guaranteed asset protection waiver agreement; authorized terms; cancellation or early termination of finance agreement; refund; calculation; disposition

(1) Guaranteed asset protection waiver
agreements may be cancelable or noncancelable after the free-look period.
A creditor or the creditor's designee may offer a borrower a waiver that does
not provide for a refund if the creditor or the creditor's designee also offers
the borrower a bona fide option to purchase a comparable waiver that provides
for a refund. Guaranteed asset protection waivers shall provide that if a
borrower cancels a waiver within the free-look period, the borrower will be
entitled to a full refund of the purchase price, so long as no benefits have
been provided. In the event benefits have been provided, the borrower may
receive a full or partial refund pursuant to the terms of the waiver.
(2) In the
event of a borrower's cancellation of the guaranteed asset protection waiver
or early termination of the finance agreement, after the agreement has been
in effect beyond the free-look period, the borrower may be entitled to a refund
of any unearned portion of the purchase price of the waiver unless the waiver
provides otherwise. The creditor or the creditor's designee shall calculate
the amount of the refund using a method at least as favorable to the borrower
as the actuarial method. In order to receive a refund, the borrower, in accordance
with any applicable terms of the waiver, must provide a written request to
the creditor or the creditor's designee within ninety days after the event
terminating the waiver or finance agreement.
(3) If the cancellation
of a guaranteed asset protection waiver occurs as a result of a default under
the finance agreement or the repossession of the motor vehicle associated
with the finance agreement, or any other termination of the finance agreement,
any refund due may be paid directly to the creditor or the creditor's designee
and applied as set forth in subsection (4) of this section.
(4) Any cancellation
refund under this section may be applied by the creditor or the creditor's
designee as a reduction of the amount owed under the finance agreement unless
the borrower can show that the finance agreement has been paid in full.

Legislative History

Source: Laws 2010, LB571, § 6.