Section 407.2035

Title XXVI TRADE AND COMMERCE

Chapter 407

Effective - 28 Aug 2023   

  407.2035.  Debt waiver obligations, insuring of by retail sellers and creditors, requirements. — 1.  (1)  A retail seller shall insure its debt waiver obligations under a contractual liability or other insurance policy issued by an insurer.  A creditor, other than a retail seller, may insure its debt waiver obligations under a contractual liability policy or other such policy issued by an insurer.  Any such insurance policy may be directly obtained by a creditor or retail seller or may be procured by an administrator to cover a creditor's or retail seller's obligations.

  (2)  Notwithstanding the provisions of subdivision (1) of this subsection, retail sellers who are lessors on motor vehicles shall not be required to insure obligations related to debt waivers on such leased motor vehicles.

  2.  The debt waiver remains a part of the finance agreement upon the assignment, sale, or transfer of such finance agreement by the creditor.

  3.  Any creditor who offers a debt waiver shall report the sale of, and forward funds due to, the designated party or parties.

  4.  Funds received or held by a creditor or administrator and belonging to an insurer, creditor, or administrator shall be held by such creditor or administrator in a fiduciary capacity.

­­--------

(L. 2023 S.B. 398)