Record Retention. Professional Insurance Agents of Florida 1390 Timberlane Rd. Tallahassee, FL

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1 Record Retention Professional Insurance Agents of Florida 1390 Timberlane Rd. Tallahassee, FL Record Retention Guidelines Below are few comments about the record retention information within this document. The Florida statutes don t address the whole range of types of records an agency would have. The statute on financial records [F.S (2)] requires three years which may just be based on how far back an audit is supposed to go. This would be a minimum standard. The second statute [F.S ] is apparently intended to address current policies because otherwise it would be very impractical. There was a fraud bill [CS/BS 312; Chapter ; effective 10/1/99] passed during the 1999 Florida legislative session that includes a five year statute of limitations on prosecution of insurance fraud crimes. This may not affect civil liability but it might be a good guideline for how far back to keep some records. How Long to Retain your Business Records is based more on E&O considerations than on statutory requirements, and it seems to be fairly conservative by retaining records for a relatively long time. Additional guidelines information has been obtained from The National Alliance via the Certified Insurance Service Representatives (CISR) Agency Operations text as well as articles from accounting firms. There doesn t seem to be a definite time established for most record keeping in the Florida statutes so it s a question of meeting the minimum standards for the records specified and using your own judgment and comfort level with the E&O risk to determine how often to eliminate old records. With respect to all information found in this document, PIA of Florida and its directors, officers, members, or employees make no warranty, express or implied, or assume any legal liability or responsibility for the accuracy, completeness, or usefulness of any information contained therein. PIA of Florida does not warrant that the information or services will meet any specific requirements; nor will it be error-free or uninterrupted; nor shall PIA of Florida be liable for any indirect, incidental, or consequential damages sustained or incurred in connection with the use of information in this newsletter. Under no circumstances will PIA of Florida be liable for any loss or damage caused by anyone's reliance on information contained in this document. 3/2007

2 Reporting and accounting for funds (1) All premiums, return premiums, or other funds belonging to insurers or others received by an agent, customer representative, or adjuster in transactions under his or her license are trust funds received by the licensee in a fiduciary capacity. An agent shall keep the funds belonging to each insurer for which he or she is not appointed, other than a surplus lines insurer, in a separate account so as to allow the department or office to properly audit such funds. The licensee in the applicable regular course of business shall account for and pay the same to the insurer, insured, or other person entitled thereto. (2) The licensee shall keep and make available to the department or office books, accounts, and records as will enable the department or office to determine whether such licensee is complying with the provisions of this code. Every licensee shall preserve books, accounts, and records pertaining to a premium payment for at least 3 years after payment; provided, however, the preservation of records by computer or photographic reproductions or records in photographic form shall constitute compliance with this requirement. All other records shall be maintained in accordance with s The 3-year requirement shall not apply to insurance binders when no policy is ultimately issued and no premium is collected. (3) Any agent, customer representative, or adjuster who, not being lawfully entitled thereto, either temporarily or permanently diverts or misappropriates such funds or any portion thereof or deprives the other person of a benefit therefrom commits the offense specified below: (a) If the funds diverted or misappropriated are $300 or less, a misdemeanor of the first degree, punishable as provided in s or s (b) If the funds diverted or misappropriated are more than $300, but less than $20,000, a felony of the third degree, punishable as provided in s , s , or s (c) If the funds diverted or misappropriated are $20,000 or more, but less than $100,000, a felony of the second degree, punishable as provided in s , s , or s (d) If the funds diverted or misappropriated are $100,000 or more, a felony of the first degree, punishable as provided in s , s , or s Agent's records Every agent transacting any insurance policy must maintain in his or her office, or have readily accessible by electronic or photographic means, such records of policies transacted by him or her as to enable the policyholders and department to obtain all necessary information, including daily reports, applications, change endorsements, or documents signed or initialed by the insured concerning such policies.

3 HOW LONG TO RETAIN YOUR BUSINESS RECORDS Most people seem to keep records and papers for an indefinite period of time even though the cost of space for storage may be significant. While there are services that will store records, most businesses keep them in corporate offices and often stuff checks, bank statements and other important documents in file drawers, cabinets and closets. The following chart is a guide to how long specific records should be retained. ACCOUNTING RECORDS YEARS PERM Bank statements & deposit slips Payroll records Expense reports Subsidiary ledgers (including A/P and A/R ledgers) Trial balances (monthly) Checks Payroll (individual time reports & earnings records) Vouchers (for payments to vendors, employees, et. al) Audit reports and financial statements General ledgers & journals CORPORATE RECORDS Mortgages, notes & leases (expired) Bylaws, charter & minute books Capital stock & bond records Checks (taxes, property & fulfillment of important contracts) Contracts & agreements Copyrights & trademark registrations Deeds & easements Labor contracts Patents Retirement & pension records Tax returns & supporting documents CORRESPONDENCE General License, traffic & purchase Production Legal & tax INSURANCE DOCUMENTS Policies (expired) Accident reports Fire inspection reports Group disability records Safety reports Claims (after settlement) PERSONNEL RECORDS PURCHASING & SALES DOCUMENT RECEIVING & SHIPPING RECORDS

4 RECORD RETENTION CHART SUGGESTED CLIENT RECORD RETENTION SCHEDULE Note: Retention requirements vary by state law, the nature of the document and agency management decisions. Agent/Broker of Record Letter Applications for Coverage Audit Reports, Audit Worksheets Binders Certificates of Insurance Claim Reports Client Data Sheet/Profile Daily Reports Evidence of Property Insurance Expiration Slips Expiration Slips, Cancelled Expirations on policies not Fire Rate Make-up Important Correspondence Loss Drafts Letter of Modification of Coverages Conditions, Exclusions, etc. Property Appraisals 3 years after expiration 5 years after expiration 3 years by policy Varies by draft/check 1 year after loss of account 1 year after loss of account 3 years past expiration 5 years past expiration by policy 1 year after not taken or not renewed 1 year after superseded Recommendations for Changes, Coverages, Exclusions, etc. 1 year after loss of the account

5 Risk Analysis Questionnaires Survey Reports Transmittal Letters Underwriting Guidelines of Individual Insurers and Instructions 1 year after superseded 3 years past expiration 5 years past expiration 1 year after superseded This schedule is not intended to be a comprehensive list but rather a starting point for records retention. Consult with agency principal for additions, deletions, etc. from this suggested schedule. Check with your state regulator to determine if there are specific state retention requirements.

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