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Committee clarifies guaranteed‑asset‑protection waivers, saying GAP waivers are not insurance but may be backed by policies
Summary
House Bill 16‑72 passed committee to clarify that guaranteed asset protection (GAP) waivers are not insurance and are exempt from state insurance laws while directing retail sellers to ensure GAP obligations via contractual liability or insurer‑issued policies.
The committee passed House Bill 16‑72, a measure clarifying the regulatory status of guaranteed asset protection (GAP) waivers.
Attorney Morrill Harriman, representing GAPA and speaking from Mitchell Williams law firm, explained the bill’s intent: the text states that "guaranteed asset protection waivers governed under this subject are not insurance and are exempt from the insurance laws of this state," but elsewhere requires a retail seller to ensure GAP obligations under a contractual liability or other insurance policy issued by an insurer. Harriman said the bill had been circulated to the Arkansas Insurance Department, the state banking department, the Arkansas Bankers Association and the Arkansas Automobile Association and that minor changes were incorporated before filing.
Committee members noted the bill passed overwhelmingly in the House and sponsors deferred additional questions to Senator Harriman and Representative Maddox. The committee voted to pass the measure on a voice vote.
Why it matters: The bill clarifies how GAP waivers are treated under state law and requires retail sellers to ensure obligations are backed contractually or by insurer policies, addressing regulatory uncertainty.
Next steps: The bill passed committee; floor scheduling and additional technical amendments were not recorded in the transcript.
