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 ‭(Hidden)‬ Catalog-Item Reuse

Spring Clean: How Long Should You Retain Documents in Your AMS?

Differences between federal and state record retention rules as well as those included in carrier contracts may lead to uncertainty.
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spring clean: how long should you retain documents in your ams?

Q: What is the recommended retention period for documents within your agency management system (AMS)?

Response 1: Your state's insurance commissioner and your errors & omissions carrier will typically be the guideline on what they expect your document retention standard should be. 

I would recommend researching what the expectations are for each of those two entities and then contacting your automation vendor for best practice guidelines for setting up and maintaining your system based on those stipulations. 

There are proper purging procedures inside every automation system that purge the entire document footprint, which isn't necessarily accomplished by simply deleting a file. Contact your automation vendor for specific and detailed procedures to make sure you're completely compliant with the standards.

Response 2: The correct answer to this question is extremely long and complex. The rules vary significantly depending on the type of document involved. No single date exists. The only single data point is that all paper and electronic records are to be maintained for the same time. Also, federal and state record retention rules often conflict, as well as carrier contracts.

Response 3: Record retention must comply with state and federal laws. Your management system likely no longer requires that you “purge" documents since storage space is not expensive, so you could conceivably keep everything forever. But keeping things longer than required may have a downside as well. 

Response 4: The old rule of thumb for paper files was 5-7 years for personal lines documents or 7-10 years for commercial lines documents. Then, after we eliminated the paper files, the argument was made that if the limit was seven years before, why not seven years now? Now that we don't need physical space for old records, we can keep information indefinitely. As technology allowed us to have more “space" to store records, it seems to be a simple solution. 

However, do you want to be harmed by a note in your file from 10 years ago? That's exactly what happened in an E&O claim I was involved in. Almost every agency I talk with agrees that they do a better job documenting today than they did 10 or 20 years ago, so really, it could help you, but it could also harm you. 

One of the critical issues is whether your system will even let you remove the records. Almost all systems allow you to archive records, but not always totally remove them. Talk to your vendor before you decide what you can or should do.

This question was originally submitted by an agent through the Big “I" Virtual University's (VU) Ask an Expert service, with responses curated from multiple VU faculty members. Answers to other coverage questions are available on the VU website. If you need help accessing the website, request login information.