How long must insurance companies maintain records regarding insurance transactions?

Insurance companies are required to maintain records regarding insurance transactions for a period of five years. This requirement ensures that there is adequate documentation available for any potential audits, claims, or disputes that may arise during that time frame. By retaining records for five years, regulators and policyholders can refer back to relevant information, providing transparency and accountability within the insurance industry. This duration strikes a balance between holding onto relevant information for a reasonable time while also allowing companies to manage storage and efficiency without excessive retention of outdated records. Maintaining these records helps support consumer protection and promotes fair practices in the insurance sector, which is crucial for maintaining trust between insurers and policyholders.