How Long Must Agents Keep Records Of Insurance Transactions? Read This!

The question is: how long must agents keep records of insurance transactions? In general, agents should keep any records associated with an insurance transaction for at least five years. After that, these records can be audited by the commissioner at any time.

With regards to a motor vehicle liability policy, it is required by law that the agent will keep any copy of the policy and other related documents issued to the policyholder for as long as the insurance policy was renewed by the insurance company.

how long must agents keep records of insurance transactions

Essentially, this requires the agent to keep hold of the policy records and other related documents for over 20 years. But this rule does not apply to all motor vehicle policies since there exists an insured motorist coverage requirement for those particular policies.

All policies are subjected to one recordkeeping requirement. But again, it is best for the agent to keep records of the policy for as long as the insurance company is renewing the policy. Let’s discuss more on this below.


What Records Should Be Maintained?

As prescribed by the insurance code, particular records are expected to be kept and maintained properly. For instance, agents and brokers are required to maintain the following records for at least five years after the cancellation or expiration date of an insurance policy:

  • Policy number
  • Name of the insurer and insured
  • Effective, cancellation, and termination dates of the coverage
  • Named of the individuals who are promised or will receive the commission or any other consideration related to an insurance transaction
  • Amount of commission, net premium, and gross premium
  • Premium amount received
  • The date at which the premium is deposited to the trust account
  • The date at which the broker or agent received the premium payment
  • Account number, address, and name of the bank that the premium is deposited
  • Amount of gross and net premium returned
  • The date at which the gross return premium is paid to the person to whom it is entitled to
  • The date that the broker or agent receives the returned premium from the insurer

Correspondingly, certain records are expected to be maintained by the agent or broker for a minimum of 18 months. Below is the list of the records prescribed to be kept for that span of time.

  • A copy of the insurance application
  • Identification of every person is involved in the insurance transaction
  • Any correspondence sent and received, including any records such as a note of the conversation that can describe the transaction
  • Records of all oral or written binders, indicating the names of the insurer and insured, the premium for the policy or binder issued, nature of coverage, and the termination or effective dates of the policy

Any document related to the surplus lines, including the disclosure statement and diligent search form, should be maintained about 5 years from an insurance policy’s cancellation or expiration date. More so, the original copy of the disclosure statement and diligent search form should be kept by the individual who signed it.


How Long Must Records Of Insurance Transactions Be Kept By Agents?

So, how long must agents keep records of insurance transactions? Many people dread recordkeeping. Even though it is tedious to do so, it is necessary to keep records for any business career or industry to succeed. Therefore, it is essential for insurance agents and brokers to master record retention.

It is mandated in many states that brokers and agents must maintain the records for a specific period. Furthermore, those records should be open for examination and expectations by the insurance commissioner of the state. This should also be available in the department requested an inspection. If an agent fails to maintain any of the documents, they can be subjected to regulatory sanctions, such as the revocation of license.

In the Insurance Code of Georgia, the agents are required to keep the records of any transaction for 5 years starting from the insurance contract term or the completion of a transaction.


Where Are Those Records Kept?

All the records must be kept in the principal office of the broker or principal unless otherwise is authorized by DOI. Those records should also be maintained so that it is easy to access any information in case of an examination or inspection.

A year after the termination or cancellation of the policy, the records can be maintained offsite. This should be easily retrievable with two ordinary days of business. The agent can also keep the records identified in the principal office of the broker or agent in a secondary office for as long as the DOI approves it. So before keeping the records in another office, it is subject to DOI approval.


It’s A Wrap!

Now, you already know how long must agents keep records of insurance transactions. As a general rule, any information related to an insurance transaction must be maintained by the agent for five years.

Every insurance agent should follow the record-keeping requirements so that it is easy to get hold of any needed information when needed. The same is true when those records are subjected to inspection.

Leave a Comment