OHIO LEGISLATIVE SERVICE COMMISSION
Office of Research Legislative Budget
www.lsc.ohio.gov and Drafting Office
S.B. 157* Bill Analysis
135th General Assembly
Click here for S.B. 157’s Fiscal Note
Version: As Reported by House Insurance
Primary Sponsor: Sen. Lang
Effective date:
Nick Thomas, Research Analyst
Larry Gunter, Jr., Research Analyst
SUMMARY
Financial products involving motor vehicles
▪ Exempts “excess wear and use waivers,” i.e., contracts that nullify fees that might
otherwise be owed at the end of a motor vehicle lease agreement for driving too many
miles or damaging the vehicle, from state insurance laws.
▪ Prohibits conditioning terms of a motor vehicle lease on the consumer’s payment for an
excess wear and use waiver.
▪ Expands the existing insurance law exemption for motor vehicle “debt cancellation or
debt suspension products” to include products that provide a financial benefit for the
purchase of a new vehicle.
▪ Limits the current requirement that debt cancellation or debt suspension products be
listed as a specific good when invoiced to the consumer to “optional” products that are
not a condition of the sale.
▪ Exempts optional debt cancellation or debt suspension products from state law
limitations on interest and finance charges.
▪ Expands the types of agreements that qualify as “ancillary product protection contracts”
and, thus, are exempted from state insurance laws to include certain contracts that
protect against lease-end charges, vehicle value protection agreements, and contracts
involving under-speed vehicles.
* This analysis was prepared before the report of the House Insurance Committee appeared in the House
Journal. Note that the legislative history may be incomplete.
December 10, 2024
Office of Research and Drafting LSC Legislative Budget Office
▪ Requires providers of “vehicle value protection agreements,” i.e., agreements that
provide a benefit to the purchaser when a vehicle is lost, stolen, damaged, obsolete, or
diminished in value, to allow a 30-day period for the contract holder to cancel the
agreement so long as no benefits have been paid.
▪ Establishes procedures and requirements for contract providers that seek to cancel a
vehicle value protection agreement.
Retail installment contracts
▪ Eliminates the requirement that any retail installment contract arising out of a consumer
transaction be payable in substantially equal consecutive installments, instead requiring
such contracts to be payable in periodic installments which need not be consecutive or
substantially equal.
▪ Requires contracts that include a final scheduled installment that is more than two times
the average of all prior scheduled installments to allow the buyer to refinance the
contract under terms no less favorable than the original contract.
Replica motor vehicles
▪ Authorizes a person to register a replica motor vehicle (which is a vehicle that intends to
replicate another motor vehicle that is at least 25 years old), for limited operation on
public roads and highways.
▪ Authorizes the owner of a replica motor vehicle to request that the certificate of title
indicate that the vehicle is a replica vehicle, and establishes procedures for issuance of
the certificate of title.
▪ Exempts replica motor vehicles from certain requirements (e.g., emissions, noise control,
and fuel usage) that were not in effect in the year of manufacture that the vehicle
replicates.
Expired registration on a rental motor vehicle
▪ Exempts the operator of a rental vehicle from the prohibition against driving without a
valid motor vehicle registration when all of the following apply:
 The operator has a valid and effective rental agreement with a motor vehicle renting
dealer;
 At the time of the offense, the operator provides the valid written agreement to the
peace officer or state highway patrol officer enforcing the prohibition; and
 The operator has not removed, concealed, or modified the license plate or validation
sticker as placed or attached by the motor vehicle renting dealer or its affiliate.
▪ Places the liability for fees, fines, and penalties arising from the violation of the
prohibition on the registered owner of the rental motor vehicle.
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As Reported by House Insurance
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Ohio Assigned Risk Insurance Plan
▪ Requires insurance agents to take certain actions to confirm that a person seeking
automobile insurance through the Ohio Assigned Risk Insurance Plan is unable to secure
coverage through private insurers.
Uninsured drivers
▪ Expands the persons who may report a driver or owner of a motor vehicle involved in an
accident to the Bureau of Motor Vehicles for failure to maintain financial responsibility to
include any person who suffers injury or property damage, as opposed to only persons
who are also drivers of a vehicle involved in the accident.
Madeline’s Law
▪ Requires health plan issuers to cover hearing aids and related services for persons
21 years of age and younger.
▪ Names the requirement “Madeline’s Law.”
Prescription drug readers
▪ Requires a licensed terminal distributor of dangerous drugs, such as a pharmacy, to notify
a purchaser of a prescription drug at retail of the availability of a prescription drug reader
and to make the reader available on request.
▪ Requires health benefit plans and Medicaid to cover prescription readers provided by a
terminal distributor.
TABLE OF CONTENTS
Financial products involving motor vehicles .................................................................................. 4
Overview...................................................................................................................................... 4
Excess wear and use waivers ...................................................................................................... 4
Debt cancellation or debt suspension products ......................................................................... 5
Ancillary product protection contracts ....................................................................................... 5
Protection against lease-end charges .................................................................................... 6
Vehicle value protection agreements .................................................................................... 6
Characteristics ........................................................................................................................ 6
Cancellation by contract holder ............................................................................................. 6
Cancellation by contract provider .......................................................................................... 7
Under-speed vehicles ............................................................................................................. 7
Retail installment contracts ............................................................................................................ 7
Replica motor vehicles .................................................................................................................... 8
Replica motor vehicle registration .................................................................................................. 8
Replica motor vehicle designation on certificate of title................................................................ 9
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Office of Research and Drafting LSC Legislative Budget Office
Equipment exemptions for replica motor vehicles ...................................................................... 10
Effective date ................................................................................................................................ 10
Expired registration on a rental motor vehicle ............................................................................. 10
Ohio Assigned Risk Insurance Plan ............................................................................................... 11
Uninsured drivers.......................................................................................................................... 12
Madeline’s Law ............................................................................................................................. 12
Hearing aid coverage ................................................................................................................. 12
Exemption from review by the Superintendent of Insurance .................................................. 13
Name of the bill ......................................................................................................................... 13
Definitions ................................................................................................................................. 14
Prescription drug readers ............................................................................................................. 14
Terminal distributors ................................................................................................................. 14
Health benefit plans and Medicaid ........................................................................................... 15
DETAILED ANALYSIS
Financial products involving motor vehicles
Overview
Continuing law exempts certain maintenance, value protection, and repair products
offered in connection with the sale or lease of a motor vehicle from state insurance laws. The bill
expands the types of products that qualify for that exemption. It also modifies some of the
requirements associated with those products, including requirements involving invoicing,
cancellation, and surety.
Excess wear and use waivers
The bill creates a new class of motor vehicle products, referred to as “excess wear and
use waivers,” that are exempt from state insurance laws. A vehicle lease agreement typically
stipulates how many miles the person leasing the vehicle may drive the vehicle each year for the
duration of the lease. For example, it is common for leases to allow up to 10,000 or 12,000 miles
per year. At the end of the lease, a fee is paid for each mile driven beyond the allotted amount.
Excess wear and use waivers effectively nullify those fees.
Under the bill, an “excess wear and use waiver” is defined as any contractual agreement
that is part of, or a separate addendum to, a lease agreement for use of a motor vehicle, under
which the lessor (the entity providing the vehicle) agrees, with or without a separate charge, to
do one or both of the following:
▪ Cancel or waive all or part of amounts that may become due under a lease agreement as
a result of excess wear and use of a motor vehicle;
▪ Cancel or waive amounts due for excess mileage.
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As Reported by House Insurance
Office of Research and Drafting LSC Legislative Budget Office
The bill specifies that the terms of a lease are not to be conditioned upon the consumer’s
payment for any excess wear and use waiver. Excess wear and use waivers may be discounted or
given at no extra charge in connection with the purchase of other noncredit related goods or
services.1
Debt cancellation or debt suspension products
A “debt cancellation or debt suspension product” is an agreement, exempt from state
insurance laws, that cancels any debt associated with a motor vehicle that is destroyed or stolen.
Under continuing law, the term includes a guaranteed asset protection waiver, guaranteed auto
protection waiver, or any other similarly named agreement. The bill adds that a debt cancellation
or debt suspension product may also provide a benefit that waives an amount, or provides a
borrower with a credit, towards the purchase of a replacement motor vehicle. Such a benefit
may be included with or without a separate charge.
Current law requires the charges associated with debt cancellation or debt suspension
products to be listed as a specific good. In other words, the charge cannot be lumped in with the
total purchase price for the vehicle. Under the bill, this requirement applies only to “optional”
debt cancelation or debt suspension products. Consequently, it appears that when a retail seller
conditions the sale of a motor vehicle on the consumer’s purchase of a debt cancellation or debt
suspension product, that product need not be itemized, and may be lumped into the total
purchase price.
Furthermore, the bill specifies that optional debt cancellation or debt suspension
products are not to be considered a finance charge or interest. Under continuing law, a finance
charge is an amount paid or contracted to a retail seller for the privilege of paying the principal
balance of the transaction in installments over time. Ohio law caps the amount that a retail seller
may collect as a finance charge or interest. The bill seemingly exempts optional debt cancellation
or debt suspension products from those limits. In addition, finance charges are subject to certain
disclosure requirements under the federal “Truth in Lending Act” (TILA). It is not clear what, if
any, affect the bill would have on the application of TILA to debt cancellation or debt suspension
products.2
Ancillary product protection contracts
Under current law, an ancillary product protection contract provides for the repair or
replacement of specified parts or components of a motor vehicle. The bill adds two new types of
products that qualify as an ancillary product protection contract and, therefore, are exempted
from state insurance laws. It also extends the exemption to contracts involving under-speed
vehicles and establishes alternatives to the current requirement that all contracts be covered by
a reimbursement insurance policy.
1 R.C. 1310.251.
2 R.C. 1317.05(B); R.C. 1317.01, 1317.06, and 1343.01, not in the bill; 15 United States Code (U.S.C.) 1601,
et. seq.
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As Reported by House Insurance
Office of Research and Drafting LSC Legislative Budget Office
Protection against lease-end charges
The bill expands the services that qualify as motor vehicle ancillary product protection
contracts to include, in conjunction with a leased vehicle, both of the following:
▪ The repair, replacement, or maintenance of property, or indemnification for repair,
replacement, or maintenance, due to excess wear and use, damage for items such as tires,
paint cracks or chips, missing interior or exterior parts, or excess mileage that results in a
lease-end charge; and
▪ Any other charge for damage that is deemed as excess wear and use by a lessor under a
motor vehicle lease.
The bill specifies that such services do not qualify as a motor vehicle ancillary product
protection contract if the charge exceeds the purchase price of the vehicle at the end of the lease
term. It appears that an excess wear and use waiver, described above, would qualify as an
ancillary product protection contract in at least some cases.3
Vehicle value protection agreements
The bill also specifies that a motor vehicle ancillary product protection contract includes
a vehicle value protection agreement.
Characteristics
When a motor vehicle is damaged, lost, stolen, or otherwise depreciates in value, these
agreements provide a benefit towards either the reduction of some or all of the contract holder’s
current finance agreement deficiency balance (such as an amount still owed on a vehicle loan or
lease agreement), or towards the purchase or lease of a replacement motor vehicle or motor
vehicle services. Under the bill, “vehicle value protection agreement” includes trade-in-credit
agreements, diminished value agreements, depreciation benefit agreements, or other similar
agreements. “Vehicle value protection agreement” does not include a debt suspension or debt
cancellation product.4 “Finance agreement” is defined as a loan or retail installment contract
secured by a motor vehicle or a lease.5
Cancellatio