S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   3706
 
                        2025-2026 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             January 30, 2025
                                ___________
 
 Introduced by M. of A. WEPRIN -- read once and referred to the Committee
   on Insurance
 
 AN  ACT  to  amend  the  insurance law and the personal property law, in
   relation to authorizing service charges for gap waivers
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section  1.  Subparagraph  (iii)  of  paragraph 3 of subsection (b) of
 section 1101 of the insurance law, as amended by chapter 140 of the laws
 of 1995, is amended to read as follows:
   (iii) in the event the lessor, creditor or assignee  purchases  lessor
 or  creditor  gap  insurance, the charge to the lessee or debtor for the
 waiver does not exceed the cost of the lessor or creditor gap  insurance
 coverage  PLUS  ANY  PERMITTED  SERVICE  CHARGE; provided, however, that
 nothing contained [herein] IN THIS SECTION shall be construed to prohib-
 it:  (A) THE CREDITOR OR ASSIGNEE FROM  INCLUDING  THE  CHARGE  FOR  THE
 WAIVER  PLUS ANY PERMITTED SERVICE CHARGE IN ITS CALCULATION OF PAYMENTS
 DUE UNDER A RETAIL INSTALMENT CONTRACT; OR (B) the  lessor  OR  ASSIGNEE
 from including the charge for the waiver in the capitalized cost as that
 term  is  defined in subdivision eleven of section three hundred thirty-
 one of the personal property law. FOR PURPOSES OF THIS SUBPARAGRAPH,  IN
 THE  CASE  OF  A  NEW OR USED MOTOR VEHICLE WHICH IS SUBJECT TO A RETAIL
 INSTALMENT CONTRACT, SUCH PERMITTED SERVICE CHARGE MAY BE  PAID  TO  THE
 CREDITOR  OR  ASSIGNEE,  OR TO A MOTOR VEHICLE DEALER REGISTERED IN THIS
 STATE PURSUANT TO THE APPLICABLE PROVISIONS OF THE VEHICLE  AND  TRAFFIC
 LAW.
   §  2.  Subdivision  2 of section 302A of the personal property law, as
 amended by chapter 111 of the laws of 1995 and  as  further  amended  by
 section  104  of part A of chapter 62 of the laws of 2011, is amended to
 read as follows:
   2. If the retail instalment contract provides that the buyer shall  be
 responsible  upon a total loss of the vehicle occasioned by its theft or
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD07478-01-5
              

 A. 3706                             2
 
 physical damage for the gap amount, the holder, prior to  the  execution
 of the agreement, shall offer to waive its contractual right to hold the
 buyer  liable  for  the  gap  amount in the event of a total loss of the
 vehicle  occasioned by its theft or physical damage, only if motor vehi-
 cle creditor gap insurance coverage is available to the holder and  such
 coverage  is  obtained from a property/casualty insurance company, which
 has been licensed by the superintendent of financial  services  of  this
 state to write motor vehicle creditor gap insurance in this state.  This
 offer may be made contingent upon the payment by the buyer of a separate
 charge  that  shall  not  exceed  the cost of motor vehicle creditor gap
 insurance covering the retail instalment contract  PLUS A SERVICE CHARGE
 NOT TO EXCEED SEVEN HUNDRED FIFTY DOLLARS.  Nothing  contained  in  this
 section  shall  be construed to authorize a waiver, in connection with a
 transaction with respect to which motor vehicle creditor  gap  insurance
 has  not  been obtained, of a contractual right to hold the buyer liable
 for the gap amount in the event of a total loss  of  the  vehicle  occa-
 sioned by its theft or physical damage.
   §  3.  This  act shall take effect on the thirtieth day after it shall
 have become a law.