Okla. Stat. tit. 15, § 15-140.5

A. As used in this section:

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1. “Administrator” means the person who may be responsible for

the administrative or operational function of vehicle value

protection agreements including, but not limited to, the

adjudication of claims or benefits requested by contract holders;

2. “Contract holder” means a person who is the purchaser or

holder of a vehicle value protection agreement;

3. “Provider” means a person that is obligated to provide a

benefit under a vehicle value protection agreement. A provider may

perform as an administrator or retain the services of a third-party

administrator; and

4. “Vehicle value protection agreement” means a contractual

agreement that provides a benefit towards either the reduction of

some or all of the contract holder’s current finance agreement

deficiency balance, or towards the purchase or lease of a

replacement motor vehicle or motor vehicle services, upon the

occurrence of an adverse event to the motor vehicle including, but

not limited to, loss, theft, damage, obsolescence, diminished value,

or depreciation. These agreements do not include debt waivers.

These agreements may include, but not be limited to, trade-in-credit

agreements, diminished value agreements, depreciation benefit

agreements, or other similarly named agreements.

B. 1. No administrator or provider operating as an

administrator shall perform or engage in any administrative or

operational functions of vehicle value protection agreements without

first registering with the Insurance Department. Registration shall

be renewed annually by July 15 of each calendar year. All

registrations shall be filed and fees shall be paid electronically

in the manner and form prescribed by the Insurance Commissioner.

2. An administrator or a provider operating as an administrator

shall electronically file an updated registration within thirty (30)

days of any change of name, address, or email address.

3. Every administrator and provider, upon receipt of any

inquiry from the Commissioner, shall furnish the Commissioner with

an adequate response to the inquiry within twenty (20) days from the

date of receipt of the inquiry.

C. Requirements for offering vehicle value protection

agreements:

1. A provider may utilize an administrator or other designee to

be responsible for any and all of the administration of vehicle

value protection agreements in compliance with Section 140.2 et seq.

of this title;

2. Vehicle value protection agreements shall not be sold unless

the contract holder has been or will be provided access to a copy of

that vehicle value protection agreement;

3. In order to assure the faithful performance of the

provider’s obligations to its contract holders, each provider shall

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be responsible for complying with the requirements of one of the

following:

a. insure all of its vehicle value protection agreements

under an insurance policy that covers one hundred

percent (100%) of its claim exposure, satisfies the

requirements of this act, and contains the following

provision: “In the event the provider is unable to

fulfill its obligations under vehicle value protection

agreements issued in this state for any reason

including insolvency, bankruptcy, or dissolution, the

insurer will pay any losses and unearned fees to the

person making a claim under such agreement.” The

insurance policy shall be issued by an insurer

licensed, registered, or otherwise authorized to do

business in this state either:
e to

fulfill its obligations under vehicle value protection

agreements issued in this state for any reason

including insolvency, bankruptcy, or dissolution, the

insurer will pay any losses and unearned fees to the

person making a claim under such agreement.” The

insurance policy shall be issued by an insurer

licensed, registered, or otherwise authorized to do

business in this state either:

(1) at the time the policy is filed with the

Insurance Commissioner, and continuously

thereafter, (i) maintain surplus as to

policyholders and paid-in capital no less than

Fifteen Million Dollars ($15,000,000.00) and (ii)

annually file copies of the insurer’s financial

statements, its National Association of Insurance

Commissioners (NAIC) Annual Statement, and the

actuarial certification required by and filed in

the insurer’s state of domicile, or

(2) at the time the policy is filed with the

Commissioner, and continuously thereafter, (i)

maintain surplus as to policyholders and paid-in

capital of less than Fifteen Million Dollars

($15,000,000.00) but at least equal to Ten

Million Dollars ($10,000,000.00), (ii)

demonstrate to the satisfaction of the

Commissioner that the company maintains a ratio

of net written premiums, wherever written, to

surplus as to policyholders and paid-in capital

of not greater than 3 to 1, and (iii) annually

file copies of the insurer’s audited financial

statements, its NAIC Annual Statement, and the

actuarial certification required by and filed in

the insurer’s state of domicile,

b. (1) maintain a funded reserve account for its

obligations under its contracts issued and

outstanding in this state. The reserves shall

not be less than forty percent (40%) of gross

considerations received, less claims paid, on the

sale of the vehicle value protection agreement

for all in-force contracts. The reserve account

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shall be subject to examination and review by the

Commissioner, and

(2) place in trust with the Commissioner a financial

security deposit, having a value not less than

five percent (5%) of the gross consideration

received, less claims paid, on the sale of the

vehicle value protection agreements for all

vehicle value protection agreements issued and in

force, but not less than Twenty-five Thousand

Dollars ($25,000.00), consisting of the

following:

(a) a surety bond issued by an authorized

surety,

(b) securities of the type eligible for deposit

by authorized insurers in this state,

(c) a letter of credit issued by a qualified

financial institution, or

(d) another form of security prescribed by

regulations issued by the Commissioner, or

c. (1) maintain, or together with its parent company

maintain, a net worth or stockholders’ equity of

One Hundred Million Dollars ($100,000,000.00),

and
securities of the type eligible for deposit

by authorized insurers in this state,

(c) a letter of credit issued by a qualified

financial institution, or

(d) another form of security prescribed by

regulations issued by the Commissioner, or

c. (1) maintain, or together with its parent company

maintain, a net worth or stockholders’ equity of

One Hundred Million Dollars ($100,000,000.00),

and

(2) upon request, provide the Commissioner with a

copy of the provider’s or the provider’s parent

company’s most recent Form 10-K or Form 20-F

filed with the Securities and Exchange Commission

(SEC) within the last calendar year, or if the

company does not file with the SEC, a copy of the

company’s audited financial statements, which

shows a net worth of the provider or its parent

company of at least One Hundred Million Dollars

($100,000,000.00). If the provider’s parent

company’s Form 10-K, Form 20-F, or financial

statements are filed to meet the provider’s

financial security requirement, then the parent

company shall agree to guarantee the obligations

of the provider relating to the vehicle value

protection agreements sold by the provider in

this state; and

4. Except for the requirements in paragraph 3 of subsection C

of this section, no other financial security requirements shall be

required for vehicle value protection agreement providers.

D. Vehicle value protection agreements shall disclose in

writing and in clear, understandable language the following:

1. The name and address of the provider, contract holder, and

administrator, if any;

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2. The terms of the vehicle value protection agreement

including without limitation, the purchase price to be paid by the

contract holder, the requirements for eligibility, conditions of

coverage, or exclusions;

3. That the vehicle value protection agreement may be canceled

by the contract holder within a free look period as specified in the

vehicle value protection agreement, and in such an event, the

contract holder shall be entitled to a full refund of the purchase

price paid by the contract holder, if any, as long as no benefits

have been provided;

4. The procedure the contract holder shall follow, if any, to

obtain a benefit under the terms and conditions of the vehicle value

protection agreement including, if applicable, a telephone number or

website and address where the contract holder may apply for a

benefit;

5. Whether or not the vehicle value protection agreement is

cancelable after the free look period and the conditions under which

it may be canceled including the procedures for requesting any

refund of the unearned purchase price paid by the contract holder;

6. In the event of cancelation, the methodology for calculating

any refund of the unearned purchase price of the vehicle value

protection agreement due;

7. That neither the extension of credit, the terms of the

credit, nor the terms of the related motor vehicle sale or lease may

be conditioned upon the purchase of the vehicle value protection

agreement; and

8. Vehicle value protection agreements shall state the terms

and restrictions, or conditions governing cancelation of the vehicle

value protection agreement prior to the termination or expiration

date of the vehicle value protection agreement by either the

provider or the contract holder. The provider of the vehicle value

protection agreement shall mail a written notice to the contract

holder at the last known address of the contract holder contained in

the records of the provider at least five (5) days prior to

cancelation by the provider. Prior notice shall not be required if

the reason for cancelation is nonpayment of the provider fee, a

material misrepresentation by the contract holder to the provider or

administrator, or a substantial breach of duties by the contract

holder relating to the covered product or its use. The notice shall
n

the records of the provider at least five (5) days prior to

cancelation by the provider. Prior notice shall not be required if

the reason for cancelation is nonpayment of the provider fee, a

material misrepresentation by the contract holder to the provider or

administrator, or a substantial breach of duties by the contract

holder relating to the covered product or its use. The notice shall

state the effective date of cancelation and the reason for the

cancelation. If a vehicle value protection agreement is canceled by

the provider for a reason other than nonpayment of the provider fee,

the provider shall refund the contract holder one hundred percent

(100%) of the unearned pro rata provider fee paid by the contract

holder, if any. If coverage under the vehicle value protection

agreement continues after a claim, then any refund may deduct claims

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paid. A reasonable administrative fee may be charged by the

provider not to exceed Seventy-five Dollars ($75.00).

E. Subsection D of this section and Section 140.6 of this title

shall not apply to vehicle value protection agreements offered in

connection with a commercial transaction.