AB663,1 1Section 1 . 23.33 (2) (dm) 5. of the statutes is created to read:
AB663,4,22 23.33 (2) (dm) 5. Any all-terrain vehicle or utility terrain vehicle dealer or
3creditor may offer or sell guaranteed asset protection waivers in connection with the
4retail sale or lease of all-terrain vehicles or utility terrain vehicles in this state if the
5dealer or creditor complies with the same requirements applicable with respect to
6motor vehicles under s. 218.0148. Any guaranteed asset protection waiver offered

1or sold under this subdivision shall be treated the same as one offered or sold under
2s. 218.0148, including that the guaranteed asset protection waiver is not insurance.
AB663,2 3Section 2 . 23.335 (5) (g) of the statutes is created to read:
AB663,4,104 23.335 (5) (g) Any off-highway motorcycle dealer or creditor may offer or sell
5guaranteed asset protection waivers in connection with the retail sale or lease of
6off-highway motorcycles in this state if the dealer or creditor complies with the same
7requirements applicable with respect to motor vehicles under s. 218.0148. Any
8guaranteed asset protection waiver offered or sold under this paragraph shall be
9treated the same as one offered or sold under s. 218.0148, including that the
10guaranteed asset protection waiver is not insurance.
AB663,3 11Section 3 . 30.53 (title) of the statutes is amended to read:
AB663,4,13 1230.53 (title) Certificate of origin; requirements; contents; guaranteed
13asset protection waivers
.
AB663,4 14Section 4 . 30.53 (5) of the statutes is created to read:
AB663,4,2115 30.53 (5) Guaranteed asset protection waivers. Any dealer in boats or creditor
16may offer or sell guaranteed asset protection waivers in connection with the retail
17sale or lease of boats in this state if the dealer or creditor complies with the same
18requirements applicable with respect to motor vehicles under s. 218.0148. Any
19guaranteed asset protection waiver offered or sold under this subsection shall be
20treated the same as one offered or sold under s. 218.0148, including that the
21guaranteed asset protection waiver is not insurance.
AB663,5 22Section 5. 218.0148 of the statutes is created to read:
AB663,4,24 23218.0148 Guaranteed asset protection agreements. (1) Definitions. In
24this section:
AB663,5,3
1(a) “Administrator" means a person, other than an insurer or creditor, that
2performs administrative or operational functions pursuant to guaranteed asset
3protection waiver programs.
AB663,5,64 (b) “Borrower" means a retail buyer who purchases a motor vehicle under a
5retail installment contract, a lessee, or any other debtor to whom a creditor extends
6credit for the purchase of a motor vehicle.
AB663,5,117 (c) “Creditor" means a sales finance company, including any motor vehicle
8dealer described in s. 218.0101 (34) (b), a lessor, or any other lender that extends
9credit to a retail buyer for the purchase of a motor vehicle, but does not include a
10depository institution, as defined in 12 USC 1813 (c) (1), or any state or federal credit
11union.
AB663,5,1212 (d) “Finance agreement" means any of the following:
AB663,5,1313 1. A retail installment contract.
AB663,5,1514 2. A loan agreement in which a creditor extends credit to a retail buyer for the
15purchase of a motor vehicle.
AB663,5,1616 3. A consumer lease.
AB663,5,2117 (e) “Guaranteed asset protection waiver" means a contractual obligation under
18which a creditor agrees, for a separate charge, to cancel or waive all or part of
19amounts due on a borrower's finance agreement in the event of a total physical
20damage loss or unrecovered theft of the motor vehicle specified in the finance
21agreement.
AB663,6,2 22(2) Guaranteed asset protection waivers authorized. (a) Subject par. (b),
23guaranteed asset protection waivers may be offered and sold to borrowers in this
24state in compliance with the requirements under this section. A guaranteed asset

1protection waiver must be part of, or a separate addendum to, the finance agreement
2for the motor vehicle.
AB663,6,43 (b) A creditor may not require a borrower to purchase a guaranteed asset
4protection waiver.
AB663,6,65 (c) Guaranteed asset protection waivers may, at the option of the creditor, be
6offered and sold upon a single payment or with required periodic payments.
AB663,6,97 (d) A guaranteed asset protection waiver may be assigned and the guaranteed
8asset protection waiver remains a part of the finance agreement upon the
9assignment, sale, or transfer of the finance agreement by the creditor.
AB663,6,1310 (e) Notwithstanding any other provision of law, any cost to the borrower for a
11guaranteed asset protection waiver entered into in compliance with the federal
12Truth in Lending Act, 15 USC 1601 et seq., and regulations adopted under that act,
13shall be separately stated and is not considered a finance charge or interest.
AB663,6,2214 (f) A retail seller shall insure its guaranteed asset protection waiver obligations
15under a contractual liability or other insurance policy issued by an insurer. A
16creditor, other than a retail seller, may insure its guaranteed asset protection waiver
17obligations under a contractual liability policy or other such policy issued by an
18insurer. Any such insurance policy may be directly obtained by a creditor or retail
19seller or may be procured by an administrator to cover a creditor's or retail seller's
20obligations. However, if a retail seller is also a lessor, the retail seller is not required
21to insure obligations related to guaranteed asset protection waivers on motor
22vehicles leased under a consumer lease.
AB663,7,223 (g) Any creditor that offers a guaranteed asset protection waiver shall report
24the sale of, and forward funds received on, all guaranteed asset protection waivers
25to the designated party, if any, prescribed in any applicable administrative services

1agreement, contractual liability policy, other insurance policy, or other specified
2program documents.
AB663,7,53 (h) Funds received or held by a creditor or administrator and belonging to an
4insurer, creditor, or administrator, pursuant to the terms of a written agreement,
5shall be held by the creditor or administrator in a fiduciary capacity.
AB663,7,116 (i) Any borrower or potential borrower desiring a guaranteed asset protection
7waiver shall give a specific, separately signed, affirmative written indication of the
8borrower's or potential borrower's desire to purchase a guaranteed asset protection
9waiver after receiving the disclosures required in sub. (3). A separate indication
10includes a signed, written, affirmative indication within a guaranteed asset
11protection waiver that is an addendum to the finance agreement.
AB663,7,2012 (j) A creditor may, as a provision within a guaranteed asset protection waiver,
13provide a discount or credit, or may waive or cancel an additional amount, as an
14incentive for purchasing, leasing, or financing a replacement vehicle. However, the
15creditor shall require the borrower to use the benefit on a purchase or lease from the
16retail seller that sold the original vehicle to the borrower, or with the creditor that
17financed the purchase or lease of the original vehicle. Inclusion of this provision does
18not cause the guaranteed asset protection waiver to be considered insurance.
19Notwithstanding any other provision of law, this paragraph also applies to any state
20or federally chartered bank or credit union.
AB663,7,25 21(3) Disclosure requirements for offering guaranteed asset protection
22waivers.
(a) No creditor may offer or sell to a borrower a guaranteed asset protection
23waiver in this state unless all of the following conspicuous written disclosures are
24provided prior to or concurrent with the execution of the guaranteed asset protection
25waiver agreement:
AB663,8,4
11. That the purchase of the guaranteed asset protection waiver is optional and
2that neither the extension of credit, nor the terms of the credit, nor the terms of the
3related motor vehicle sale or lease may be conditioned upon the purchase of the
4guaranteed asset protection waiver.
AB663,8,75 2. The cost and terms of the guaranteed asset protection waiver, including
6terms relating to the borrower's right to cancel the waiver and obtain a full or partial
7refund as provided under sub. (4).
AB663,8,108 3. The name and address of the initial creditor and the borrower at the time
9of the sale or lease, and the identity of any administrator if different from the
10creditor.
AB663,8,1311 4. The purchase price and the terms of the guaranteed asset protection waiver,
12including the requirements for protection, conditions, or exclusions associated with
13the guaranteed asset protection waiver.
AB663,8,1614 5. The procedure the borrower must follow, if any, to obtain guaranteed asset
15protection waiver benefits under the terms and conditions of the waiver, including
16a telephone number and address where the borrower may apply for waiver benefits.
AB663,8,2017 (b) Each guaranteed asset protection waiver agreement shall indicate that the
18agreement is between the borrower and the creditor that sold the guaranteed asset
19protection waiver and, after any assignment, between the borrower and the
20assignee.
AB663,8,23 21(4) Termination or cancellation of guaranteed asset protection waiver. (a)
22A guaranteed asset protection waiver may be canceled by the borrower at any time
23without penalty.
AB663,8,2524 (b) A guaranteed asset protection waiver terminates no later than the earliest
25of the following events:
AB663,9,1
11. Cancellation by the borrower.
AB663,9,22 2. Payment in full by the borrower of the related credit transaction.
AB663,9,43 3. Expiration of any redemption period after a repossession or surrender of the
4motor vehicle specified in the finance agreement.
AB663,9,75 4. Upon total physical damage loss or unrecovered theft of the motor vehicle
6specified in the finance agreement, after the creditor has waived the gap amount or
7it is determined that no gap amount exists.
AB663,9,98 5. Upon any other event that occurs earlier than the events listed in subds. 1.
9to 4., as specified in the guaranteed asset protection waiver.
AB663,9,1110 (c) Subject to par. (d), upon cancellation or termination of a guaranteed asset
11protection waiver, the borrower is entitled to a refund as follows:
AB663,9,1612 1. If the cancellation or termination occurs within 30 days after the date the
13borrower purchased the guaranteed asset protection waiver, the borrower is entitled
14to a full refund of the guaranteed asset protection waiver cost or a full credit of the
15guaranteed asset protection waiver cost plus the amount of applicable finance
16charges.
AB663,9,2117 2. If the cancellation or termination occurs later than 30 days after the date the
18borrower purchased the guaranteed asset protection waiver, the borrower is entitled
19to a partial refund or credit of the guaranteed asset protection waiver cost. At a
20minimum, the partial refund shall be calculated by a method no less favorable to the
21borrower than the “rule of 78,” described generally in s. 422.209 (2) (a).
AB663,9,2522 (d) No refund is required upon cancellation or termination of a guaranteed
23asset protection waiver if there has been a total physical damage loss or unrecovered
24theft of the motor vehicle specified in the finance agreement and the borrower has
25or will receive the benefit of the guaranteed asset protection waiver.
AB663,10,8
1(e) When calculating the refunds for the unearned guaranteed asset protection
2waiver charges on agreements that contract for the “rule of 78” method, refunds shall
3be based on the number of full months earned from the contract date to the actual
4termination date, counting a fractional month of 16 days or more as a full month.
5When calculating refunds for the unearned guaranteed asset protection waiver
6charge on agreements that contract for a pro rata refunding method and a monthly
7pro rata method is used, the number of full months earned shall be counted in a
8similar manner.
AB663,10,119 (f) No cancellation fee, termination fee, or similar fee may be assessed in
10connection with the cancellation or termination of a guaranteed asset protection
11waiver.
AB663,10,1512 (g) Upon cancellation or termination of a guaranteed asset protection waiver,
13the creditor shall make an appropriate refund or credit of the guaranteed asset
14protection waiver charge or shall cause to be made an appropriate refund or credit
15by instructing in writing the appropriate party to make the refund or credit.
AB663,10,19 16(5) Applicability of other law. (a) In addition to any requirement applicable
17under this section, a creditor offering or selling to a borrower a guaranteed asset
18protection waiver in this state shall comply with any applicable requirement under
19chs. 421 to 427.
AB663,10,2120 (b) Guaranteed asset protection waivers are not insurance and the insurance
21laws of this state do not apply to them.
AB663,11,3 22(6) Commercial installment sales. This section does not apply to a borrower
23who purchases a motor vehicle under a retail installment contract if, as provided in
24s. 218.0142 (11), s. 218.0142 does not apply to the retail installment sale of the motor
25vehicle. However, a guaranteed asset protection waiver offered or sold in conjunction

1with the purchase of a motor vehicle to be used primarily for business or commercial
2purposes, or in conjunction with the lease of a motor vehicle that is not a consumer
3lease, is not insurance.
AB663,11,7 4(7) Trailers. This section applies with respect to towed vehicles, including
5trailers not required to be registered under ch. 341, to the same extent it applies to
6motor vehicles, including that a guaranteed asset protection waiver offered or sold
7in connection with the sale or lease of a towed vehicle is not insurance.
AB663,6 8Section 6 . 350.12 (3) (c) 5. of the statutes is created to read:
AB663,11,159 350.12 (3) (c) 5. Any snowmobile dealer or creditor may offer or sell guaranteed
10asset protection waivers in connection with the retail sale or lease of snowmobiles
11in this state if the dealer or creditor complies with the same requirements applicable
12with respect to motor vehicles under s. 218.0148. Any guaranteed asset protection
13waiver offered or sold under this subdivision shall be treated the same as one offered
14or sold under s. 218.0148, including that the guaranteed asset protection waiver is
15not insurance.
AB663,7 16Section 7. 424.201 (3) of the statutes is repealed and recreated to read:
AB663,11,1817 424.201 (3) A guaranteed asset protection waiver, as defined in s. 218.0148 (1)
18(e).
AB663,8 19Section 8. 429.104 (13) (intro.) and (b) of the statutes are consolidated,
20renumbered 429.104 (13g) and amended to read:
AB663,11,2321 429.104 (13g) “Gap protection” insurance" means any of the following: (b)
22Insurance
insurance coverage, offered by an insurer authorized to transact business
23in this state,
that provides that another person is liable for the gap amount.
AB663,9 24Section 9. 429.104 (13) (a) of the statutes is repealed.
AB663,10 25Section 10. 429.104 (13k) of the statutes is created to read:
AB663,12,2
1429.104 (13k) “Gap waiver" means a provision in a consumer lease offered or
2sold pursuant to the terms of s. 218.0148.
AB663,11 3Section 11 . 429.104 (13m) of the statutes is amended to read:
AB663,12,184 429.104 (13m) “Gross capitalized cost" means the sum of all amounts
5capitalized in the consumer lease that, after subtracting the capitalized cost
6reduction, amortizes to the residual value by the depreciation portion of the periodic
7lease payments over the scheduled term of the lease or, for a single-payment lease,
8the single payment. These amounts may include taxes; fees for registration, license,
9acquisition, administration and assignment; other fees; charges for insurance,
10service contracts and extended warranties; and charges for a waiver of the
11contractual obligation to pay the gap amount,
for accessories and their installation,
12for other services and benefits incidental to the consumer lease, and for delivering,
13servicing, repairing or improving the vehicle. With respect to a vehicle or other
14property traded in connection with a consumer lease, the term may include the
15outstanding unpaid balance of the amount financed under a consumer loan, as
16defined in s. 421.301 (12), or a retail installment contract, as defined in s. 218.0101
17(32), or the unpaid balance of any early termination costs under a lease or other
18obligation of the lessee. The term does not include any rent charge.
AB663,12 19Section 12 . 429.204 (1) of the statutes is renumbered 429.204 and amended
20to read:
AB663,12,25 21429.204 Gap amount; notice; waiver. If a consumer lease provides that the
22lessee is responsible for any or all of the gap amount, the consumer lease shall
23conspicuously disclose this fact, using the term “gap amount". The acceptance of a
24consumer lease may not be conditioned upon the lessee's agreement to gap protection
25insurance or a gap waiver. Section 218.0148 governs gap waivers.
AB663,13
1Section 13. 429.204 (2) and (3) of the statutes are repealed.
AB663,14 2Section 14. 429.205 (1) (c) of the statutes is amended to read:
AB663,13,73 429.205 (1) (c) Any security interest in the leased vehicle or in any proceeds,
4refunds for cancellation or any other rights of the lessee with respect to the consumer
5lease or the leased vehicle, including any insurance contracts, gap protection
6contracts
waivers or gap insurance, repair contracts and extended warranty or
7maintenance service contracts.
AB663,15 8Section 15. Initial applicability.
AB663,13,109 (1) This act first applies to guaranteed asset protection waivers and gap
10waivers entered into on the effective date of this subsection.
AB663,16 11Section 16. Effective date.
AB663,13,1312 (1) This act takes effect on the first day of the 6th month beginning after
13publication.
AB663,13,1414 (End)
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