How long must an insurance agent retain records of transactions?

The correct duration for an insurance agent to retain records of transactions is at least 5 years. This requirement ensures that there is an appropriate period during which records can be accessed for audits, legal purposes, or regulatory reviews. Retaining records for 5 years provides a balance, allowing insurance agents to maintain necessary documentation while also managing storage and administrative burdens.

This retention period aligns with best practices in the insurance industry, which emphasizes accountability and transparency. Having documentation from the past 5 years allows for sufficient evidence in case of disputes, claims processing, or compliance checks mandated by regulatory authorities.

In contrast to shorter retention periods, such as 1 or 3 years, a 5-year retention period serves as a comprehensive timeframe that can cover various circumstances that might arise in the insurance industry. Furthermore, a 10-year retention would exceed common practice unless specifically dictated by unique circumstances or specific types of records.