Definitions. Debt waiver not insurance. Amount charged or financed for debt waiver. Cancellation and refund

(a) As used in this section: (1) “Borrower” means a debtor, retail buyer or lessee under a loan, retail installment contract or lease for the purchase, refinancing or lease of a motor vehicle; (2) “Creditor” means a lender, retail seller or lessor under a loan, retail installment contract or lease for the purchase, refinancing or lease of a motor vehicle; (3) “Debt waiver” means an excess wear and use waiver or guaranteed asset protection waiver other than an excess wear and use waiver or guaranteed asset protection waiver offered by any bank, Connecticut credit union or federal credit union, as those terms are defined in section 36a-2; (4) “Excess wear and use waiver” means a contractual agreement, entered into on or after January 1, 2024, in which a creditor agrees, with or without a separate charge, to cancel or waive all or part of the amounts that may become due from a borrower under a motor vehicle lease agreement as a result of excessive wear and use of a leased motor vehicle, including, but not limited to, excess mileage, which contractual agreement is a part of, or a separate addendum to, the lease agreement; and (5) “Guaranteed asset protection waiver” means a contractual agreement, entered into on or after January 1, 2024, in which a creditor agrees, with or without a separate charge, to cancel or waive all or part of the amounts due from a borrower under a retail installment contract or an installment loan contract in the event of a total physical damage loss or an unrecovered theft of a motor vehicle, which agreement is a part of, or a separate addendum to, the retail installment contract or installment loan contract, and which may provide, with or without a separate charge, a benefit that waives an amount or provides a borrower with a credit toward the purchase of a replacement motor vehicle. (b) A debt waiver shall not be considered insurance for any purpose and shall not be subject to the refund requirements set forth in section 36a-773. (c) Any amount charged or financed for a debt waiver is an authorized charge that shall be separately stated and shall not be construed to be a finance charge or interest. (d) (1) Each debt waiver shall be cancellable and shall provide the following: (A) If the borrower cancels such waiver not later than the sixtieth day after the effective date of such waiver and no benefits have been provided under such waiver, the borrower shall be entitled to a full refund of the amount the borrower paid for such waiver; (B) If the borrower cancels such waiver later than the sixtieth day after the effective date of such waiver, or if there is an early termination of the retail installment contract, installment loan or motor vehicle lease agreement, and no benefits have been provided under such waiver, the borrower shall be entitled to a pro rata refund of the amount the borrower paid for such waiver, less any cancellation fee included in the terms of the waiver; and (C) If the borrower cancels such waiver at any time during its term and benefits have been provided under such waiver, the borrower shall not be entitled to any refund. (2) Any debt waiver cancellation fee shall be included in the terms of the waiver and shall not exceed fifty dollars. (e) A creditor shall provide, or shall cause a retail seller to provide, a refund due to a borrower pursuant to this section not later than sixty days after the creditor receives the borrower's cancellation concerning such refund, without requiring the borrower to request the refund.