How Long Should You Keep Client Documents? Insurance Agents and File Retention

Can you shred those old client documents aging in the back closet of your office? As an insurance agent moving to a new office, or perhaps just doing some spring cleaning, you may wonder what duties the law imposes on your handling of client documents in your possession. More specifically, how long does the law require you to hold onto those records and how long should you? The answer may depend on what sort of documents you find in those old boxes.

First, what exactly do we mean by “client documents”? It is a broad term, but generally refers to any type of record containing information relating to your transactions with clients before, during, and after the sale of an insurance policy, including records related to claims.

As a general matter, seven years is usually sufficient for insurance agencies to maintain client records–that is, seven years after the policy ends or claims can no longer be filed. In Georgia we have statutes from the General Assembly as well as regulations from the Commissioner of Insurance prescribing sometimes shorter time frames, but prudence dictates erring on the side of caution. For example, OCGA § 33-23-34 requires licensed insurance agents to maintain, for 5 years, records of insurance contracts, premiums, and even the names of other agents who referred the client along with anyone getting a commission from the sale. The statute also requires adjustors to maintain records of each investigation or adjustment, including information about fees received.

So you know you are required to keep documents for a minimum of five years–but five years starting when? Starting when the contract was signed? Five years after the policy expires? Or perhaps five years after new claims are no longer possible under the terms of the policy? That answer also depends on the circumstances.

Since some policies cover claims made years or even decades after the end of the policy period (if those claims are based on events which took place during the policy period as seen in some worker’s comp policies for example), it may be prudent to maintain those documents for years or even decades. However, because this may be an unusual circumstance for many independent agents a prudent rule of thumb is to maintain policy documents for seven years following their expiration.

Policy documents, contracts, and adjustments are fairly cut and dry–the statute addresses them explicitly. But what about other client documents not falling into those more obvious categories?

These could be any type of important client documents, and the client may even have forgotten you have them. In that case, definitely keep those away from the shredder until you contact the client. While the best practice is simply to return important documents to the client there are times this is not possible, and you don’t have unlimited space to keep things forever. The last resort is to notify the client the documents will be shredded after a specified date if you receive no objection.

Happy Spring cleaning!

This article is not intended to provide “legal advice” on the issues discussed in it and does not create an attorney-client relationship. It is only for informational purposes. Please contact Slotkin Law Firm or another attorney who is knowledgeable in this area of the law about your specific situation before taking any action.