KY SB158

Creates a regulatory framework under KRS Chapter 367 for vehicle financial protection products, including guaranteed asset protection (GAP) waivers, excess wear and use waivers, and vehicle value protection agreements, with an effective date of January 1, 2027

Explicitly declares that vehicle financial protection products are not insurance and exempts them from Kentucky Insurance Code provisions, while requiring retail vehicle sellers to insure debt waivers under contractual liability policies issued by licensed insurers

Mandates consumer disclosure requirements including a minimum 30-day free look period with full refund rights, written terms in clear language, and prohibits conditioning credit extensions or loan terms on purchasing these products

Establishes financial security requirements for vehicle value protection agreement providers, requiring either insurance backing, a funded reserve account of at least 40% of gross consideration plus a security deposit of at least $25,000, or maintenance of $100 million net worth

Authorizes the Attorney General to enforce the Act through cease and desist orders and civil penalties of up to $500 per violation, with a $10,000 aggregate cap for similar violations