The Illinois Department of Insurance (“ IL DOI”) has proposed an amendment to Illinois’ insurer record retention requirements, which would significantly reduce reporting, book-keeping and retention obligations. The current regulation, 50 Ill. Adm. Code 901.20, requires that, prior to destruction, Illinois domestic insurers submit to the IL DOI an affidavit signed by the company president and secretary listing records in their custody that are no longer needed for specified purposes, and requesting IL DOI authorization to destroy such records.
The proposed amendment would eliminate the reporting and approval requirements, and instead provide insurers with the authority to dispose of records that do not have sufficient administrative, legal or fiscal value to warrant their further preservation and are not needed: (a) in the transaction of current business; (b) for the final settlement or disposition of an insurance claim, except that these records must be maintained for at least seven years; or (c) to determine the financial condition of the company since the date of the last examination report, except that these records must be maintained for at least seven years. The IL DOI would have authority to ensure compliance with the amended regulation in connection with financial examinations conducted approximately every five years.
In its notice of proposed amendment, the IL DOI states, “The Department recognizes that the current process outlined by this rule is outdated, unnecessary, and not in line with other states’ requirements.” We would add that the amendment is in furtherance of signficant privacy and data protection goals: by streamlining insurers’ ability to destroy claims files and other documents containing sensitive personal information, the proposed amendment reduces the risk of unauthorized access to or acquisition of such information.
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