1. GAPP is filed, in Georgia, as an “Insured” two-party program, as opposed to a “Traditional” two-party program. “Traditional” means the lender agrees to waive any claim against the borrower for deficiency. “Insured” goes a little further in that the GAPP Waiver Addendum agreement is backed by an insurance policy between the lender and an insurance company.

2. The filing has been approved by the Georgia Insurance Department.

3. The Georgia Insurance Department agrees that an insurance transaction does take place between the insurance company and the lender only. Thus, licensing and insurance laws apply to this transaction only.

4. The GAPP Waiver Addendum agreement, between the lender and borrower, is not considered to be an insurance transaction.

5. Current rulings are always subject to change.

6. No special filings are required of the lender.

7. Under financial services reform (Gramm-Leach-Bliley Act), debt cancellation products, which are currently not treated as insurance, will continue to avoid regulation as insurance products.

8. The cost of GAPP is usually included in the amount financed along with the cash price of the vehicle, and any warranties, extended service plans, mechanical repair coverage, etc. We suggest, however, that you consult with your own legal counsel and compliance people, to determine what method of disclosure and financing you should use.

9. Motor vehicle retail installment sales are governed by Georgia’s “Motor Vehicle Sales Finance Act” which does not expressly address GAPP charges. However, these charges may be included in the contract, and excluded from the finance charge, as an “other benefit” if separately described in the contract.

10. Conclusion – GAPP may be sold, and financed, so long as it is separately described in the retail installment contract.