335 - Total loss notice and waiver of the gap amount.

§  335.  Total  loss  notice  and  waiver of the gap amount. 1. If the  retail lease agreement provides that the  lessee  shall  be  responsible  upon  a  total loss of the vehicle occasioned by its theft, confiscation  or physical damage  for  the  gap  amount,  the  lessor,  prior  to  the  execution  of  the  agreement,  shall by a notice on a separate document  conspicuously disclose that fact  and  the  obligations  for  which  the  lessee  would  remain  liable  in  the event of a theft, confiscation or  total loss of the vehicle. If the lessor is required  under  subdivision  two  of this section to offer to waive its contractual right to hold the  lessee liable for the gap amount in the event of a  total  loss  of  the  vehicle  occasioned  by  its  theft or physical damage, the notice shall  also: (a) state that for a separate charge disclosed in the  notice  the  lessor  will  waive  its contractual right to hold the lessee liable for  the gap amount in the event of a total loss of the vehicle occasioned by  its theft or physical damage; (b)  contain  a  provision  informing  the  lessee  that  he or she may as an alternative to purchasing a waiver, be  able to purchase insurance covering the gap  amount  from  an  insurance  company  which  has  been licensed by the superintendent of insurance to  write motor vehicle lessee gap insurance in this state; and (c)  contain  a  provision  permitting  the lessee to indicate whether he or she wants  the lessor to waive its contractual right to hold the lessee liable  for  the gap amount in the event of a total loss of the vehicle occasioned by  its  theft or physical damage. The notice shall be signed by the lessee.  The lessor or assignee shall provide a copy of the signed notice to  the  lessee,  and  shall  maintain a copy in the lessor's or assignee's files  for at least the term of the lease. Failure to provide the notice and to  obtain the lessee's signature as  required  by  this  subdivision  shall  invalidate any provision of the agreement which otherwise would obligate  a  lessee  to pay to the holder, after a total loss of the motor vehicle  occasioned by its theft, confiscation or physical damage the gap amount.  No retail  lease  agreement  shall  be  conditioned  upon  the  lessee's  obtaining  of  motor  vehicle  lessee  gap  insurance  as  set  forth in  subparagraph (B) of paragraph twenty-six of subsection  (a)  of  section  one thousand one hundred thirteen of the insurance law.    2.  If  the  retail  lease agreement provides that the lessee shall be  responsible upon a total loss of the vehicle occasioned by its theft  or  physical  damage  for the gap amount, the lessor, prior to the execution  of the agreement, shall offer to waive its contractual right to hold the  lessee liable for the gap amount in the event of a  total  loss  of  the  vehicle  occasioned  by  its  theft  or  physical  damage, only if motor  vehicle lessor gap insurance coverage is available to the lessor or  the  anticipated   assignee   and   such   coverage   is   obtained   from  a  property/casualty insurance company, which  has  been  licensed  by  the  superintendent  of insurance of this state to write motor vehicle lessor  gap insurance in this state. This offer may be made contingent upon  the  payment  by  the  lessee  of a separate charge that shall not exceed the  cost of lessor gap insurance covering the retail lease transaction  plus  an  administrative  fee not to exceed ten dollars.  Nothing contained in  this section shall be construed to authorize  a  waiver,  in  connection  with  a  transaction  with respect to which lessor gap insurance has not  been obtained, of a contractual right to hold the lessee liable for  the  gap amount in the event of a total loss of the vehicle occasioned by its  theft or physical damage.    3.  A  lessor  shall  not  be  obligated under subdivision two of this  section to offer to waive its  contractual  right  to  hold  the  lessee  liable for the gap amount if, during the current calendar year or during  the  odd-numbered  calendar year immediately preceding the calendar year  in which the agreement is entered into, the lessor  or  the  anticipatedassignee  of  the lessor has received motor vehicle lessor gap insurance  declination notices or  other  evidence  of  unavailability  from  every  insurance  company  whose  name  appears  on  the  insurance  department  compilation  of insurance companies which during that calendar year were  authorized to write motor vehicle lessor gap insurance  in  this  state.  Evidence of these declinations shall be retained by such a lessor or the  anticipated  assignee  of  such a lessor for a period of six years after  the expiration of the calendar year in which they were issued.    4. In order to enable lessors or their anticipated assignees to comply  with the requirements imposed by subdivision two of  this  section,  the  superintendent   of   insurance  shall  compile  and  make  available  a  periodically  updated  list  of  those  insurance  companies  which  are  authorized  to write motor vehicle lessor gap insurance coverage in this  state.    5. Nothing in this section shall be construed to apply to the  lessor,  or  any anticipated assignee of a lessor, under a retail lease agreement  under which the lessee is not liable upon a total loss  of  the  vehicle  occasioned  by  its  theft,  confiscation or physical damage for the gap  amount.