HB3156 - Guaranteed Asset Protection Waiver Act

• Creates regulatory framework for guaranteed asset protection (GAP) waivers, which allow creditors to cancel or waive finance agreement amounts owed if a motor vehicle is totally damaged or stolen, for a separate charge to the borrower.

• Exempts GAP waivers from Illinois insurance regulation and licensing requirements, establishing them as contractual agreements rather than insurance products.

• Requires creditors offering GAP waivers to obtain contractual liability or other insurance policies to cover waiver obligations; retail sellers must obtain such coverage.

• Mandates clear written disclosures to borrowers including purchase price, terms, conditions, exclusions, a free look period of at least 30 days for penalty-free cancellation with full refund, and procedures for claiming benefits.

• Grants Secretary of Financial and Professional Regulation enforcement authority with power to issue cease and desist orders and impose penalties up to $500 per violation with aggregate cap of $10,000 for similar violations.