Summary of Original Version

Create new sections of KRS Chapter 367 to establish regulatory requirements for vehicle financial protection products; establish the purpose of the requirements; define terms; provide that vehicle financial protection products issued before, on, or after the effective date of the Act shall not be considered insurance; establish exemptions from the regulatory requirements; provide that amounts charged or financed for vehicle financial protection products are authorized charges to be stated separately and shall not be considered a finance charge or interest; prohibit conditioning the extension of credit, terms of a loan, or terms of a related vehicle sale or lease from being conditioned on the consumer's payment for a vehicle financial protection product; establish requirements for debt waivers; establish requirements for vehicle value protection agreements; amend KRS 190.100 and create a new section of Subtitle 4 of KRS Chapter 286 to require retail installment contracts and consumer loan companies to comply with the regulatory requirements for vehicle financial protection products; amend KRS 304.1-120 to conform; direct that the Act applies to vehicle financial protection products that become effective on or after January 1, 2027; EFFECTIVE January 1, 2027.

Summary of Amendment: House Committee Substitute 1

Summary Retain original provisions, except remove additional products designated by the Attorney General from the definition of "debt waiver"; exclude products that are insurance from the definition of "vehicle value protection agreement"; modify insurance requirements for debt waivers; remove authority for the Attorney General to designate additional forms of security that may be used to satisfy requirements for providers of vehicle value protection agreements; require a vehicle value protection agreement to disclose that the agreement is not a contract of insurance; apply Consumer Protection Act remedies, powers, and duties to violations of Sections 1 to 7 of the Act; require notice and opportunity for a hearing to comply with KRS Chapter 13B; provide persons aggrieved by a final order of the Attorney General with a right to appeal in accordance with KRS Chapter 13B; make technical and conforming amendments; create new sections of Subtitle 19 of KRS Chapter 304 to establish regulatory requirements relating to credit personal property insurance; define terms; establish exemptions from the regulatory requirements; establish limits on the amount and term of credit personal property insurance sold in conjunction with a closed-end credit transaction; require credit personal property insurance to cover a substantial risk of loss of, or damage to, the collateral pledged or secured in the credit transaction; prohibit an insurer from requiring bundling of other credit insurance coverages and from using gross debt in determining premiums; require a creditor to deliver, or cause to be delivered, a policy, certificate, memorandum or other disclosure disclosing the costs and coverage within 30 days after the date of the loan; require policies, certificates, plans, contracts, applications, enrollment forms, and schedules of premiums rates to be filed with the commissioner of the Department of Insurance; establish requirements for the refund of unearned premiums upon cancellation prior to the scheduled maturity date; establish requirements relating to the reporting and payment of claims; provide that a person aggrieved by a decision of the commissioner may request an administrative hearing; provide that a violation by an insurer is subject to the penalty provisions of Subtitle 99 of KRS Chapter 304; amend KRS 304.19-010, 304.19-020, 304.19-080, 304.19-090, and 304.19-130 to conform; direct that certain sections apply to contracts issued or renewed on or after the effective date of the section.

Summary of Amendment: House Committee Amendment 1 -- M. Meredith

Summary Make title amendment.

Statutes affected:
Introduced: 190.100
House Committee Substitute 1: 190.100
Current: 190.100