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Can I require customers to sign liability waivers in Washington? What are the requirements?

Based on the information provided in the context documents, it is possible to offer, sell, or provide waivers to borrowers in Washington in compliance with the relevant chapter [1.1]. However, the extension of credit, the term of credit, nor the term of the related motor vehicle sale or lease may be conditioned upon the purchase of a waiver [1.1]. Any cost to the borrower for a guaranteed asset protection waiver must be separately stated and is not to be considered a finance charge or interest [1.1].

Requirements for Offering Liability Waivers

To offer, sell, or provide waivers in Washington, the following requirements must be met:

  • The waiver must comply with the relevant chapter [1.1].
  • The extension of credit, the term of credit, nor the term of the related motor vehicle sale or lease may be conditioned upon the purchase of a waiver [1.1].
  • Any cost to the borrower for a guaranteed asset protection waiver must be separately stated and is not to be considered a finance charge or interest [1.1].
  • No person shall knowingly make, publish, or disseminate any false, deceptive, or misleading representation or advertising in the conduct of, or relative to, waiver business [1.1].
  • A person or entity engaged in the guaranteed asset protection waiver business in Washington may not refuse to sell or issue any guaranteed asset protection waiver because of the sex, marital status, or sexual orientation as defined in RCW 49.60.040, or the presence of any sensory, mental, or physical disability of the borrower or prospective borrower [1.1].

Penalties for Failure to Register

Any person who markets, offers for sale or sells a guaranteed asset protection waiver, or acts as an obligor for a guaranteed asset protection waiver without a registration, unless otherwise exempt from registration or exempt from this chapter, is acting in violation of this section and is subject to the provisions of RCW 48.160.070. In addition, any person who knowingly violates this section is guilty of a class B felony punishable under chapter 9A.20 RCW [1.4].

License Requirements

A person may not act or aid in any manner in soliciting, negotiating, or procuring liability insurance in Washington from a risk retention group unless the person is licensed as an insurance producer for casualty insurance in accordance with chapter 48.17 RCW and pays the fees designated for the license under RCW 48.14.010 [3.2].

Insuring Waiver Obligations

Contractual liability or other insurance policies insuring waivers must state the obligation of the insurer to reimburse or pay to the creditor any sums the creditor is legally obligated to waive under the waivers issued by the creditor and purchased or held by the borrower [1.2]. Coverage under a contractual liability or other insurance policy insuring a waiver must also cover any subsequent assignee upon the assignment, sale, or transfer of the finance agreement [1.2]. Coverage under a contractual liability or other insurance policy insuring a waiver must remain in effect unless canceled or terminated in compliance with applicable insurance laws of this state [1.2]. The cancellation or termination of a contractual liability or other insurance policy must not reduce the insurer’s responsibility for waivers issued by the creditor prior to the date of cancellation or termination and for which a premium has been received by the insurer [1.2].

Registration Requirements

Any person offering or selling guaranteed asset protection waivers to residents of the state of Washington or borrowers in the state of Washington, or acting as an obligor for guaranteed asset protection waivers sold to residents of this state, must register with the commissioner as required by RCW 48.160.020 unless: (1) The person is exempt under RCW 48.160.001(2); (2) The person is a retail seller of motor vehicles assigning: (a) More than eighty-five percent of guaranteed asset protection waiver agreements within thirty days of such agreements’ effective date; and (b) One hundred percent of guaranteed protection waiver agreements within forty-five days of each agreement’s effective date; or (3) The person is an insurer authorized to transact insurance business in Washington state [4.1]. The application for registration must include the following: (a) The applicant’s name, address, and telephone number; (b) The identities of the applicant’s executive officers or other officers directly responsible for the waiver business; (c) An application fee of two hundred fifty dollars, which shall be deposited into the guaranteed asset protection waiver account; (d) A copy filed by the applicant with the commissioner of the waivers the applicant intends to offer in this state; (e) A list of all unregistered marketers of guaranteed asset protection waivers on which the applicant will be the obligor; (f) Such additional information as the commissioner may reasonably require [1.3].

Conclusion

Based on the information provided in the context documents, it is possible to offer, sell, or provide waivers to borrowers in Washington in compliance with the relevant chapter. However, the extension of credit, the term of credit, nor the term of the related motor vehicle sale or lease may be conditioned upon the purchase of a waiver. Any cost to the borrower for a guaranteed asset protection waiver must be separately stated and is not to be considered a finance charge or interest. Additionally, a person must be licensed as an insurance producer for casualty insurance in accordance with chapter 48.17 RCW to act or aid in any manner in soliciting, negotiating, or procuring liability insurance in Washington from a risk retention group. Any person offering or selling guaranteed asset protection waivers to residents of the state of Washington or borrowers in the state of Washington, or acting as an obligor for guaranteed asset protection waivers sold to residents of this state, must register with the commissioner as required by RCW 48.160.020 unless exempt [4.1].

Source(s):
Jurisdiction

Washington