The Illinois Department of Insurance (“IL DOI”) has amended its record disposal and destruction regulation effective May 23, 2016, significantly reducing reporting, book-keeping and retention obligations for Illinois domestic insurers, as well as any principal U.S. office of a foreign or alien insurer located in Illinois. The amendment to Title 50, Section 901.20 of the Illinois Administrative Code, available here, tracks the IL DOI’s previous proposed amendment, as reported here, except that the adopted amendment reduces certain required retention periods from seven to five years.
The amendment eliminates a cumbersome requirement that, prior to destruction, 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 request IL DOI authorization to destroy such records. Under the amended regulation, insurers may 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 the current year plus five 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 the current year plus five years.
Insurance companies domiciled in Illinois, as well as any principal U.S. office of a foreign or alien insurer located in Illinois, should review and revise their record retention policies accordingly.