HB145 Summary

• Amends Alabama Code Section 8-37-2 to expand the definition of "Guaranteed Asset Protection (GAP) Waiver" to include excess wear and use waivers in consumer lease agreements.

• Creates new Chapter 37A establishing a regulatory framework for "Motor Vehicle Value Protection Agreements" that provide benefits to reduce deficiency balances on vehicle financing or replacement vehicle costs.

• Requires providers of these agreements to comply with one of three financial security options: maintaining insurance with specific capital requirements, maintaining a funded reserve account of at least 40% of gross consideration received, or maintaining $100 million in net worth with SEC filing documentation.

• Mandates clear written disclosures in all agreements including provider information, coverage terms, cancellation rights with a minimum 30-day free look period, claim procedures, and prohibition on conditioning credit or vehicle sales on agreement purchase.

• Exempts motor vehicle value protection agreements from insurance licensing requirements and grants the Superintendent of Banks enforcement authority with penalties up to $500 per violation and $10,000 aggregate.

• Becomes effective January 1, 2023.