What is a requirement for an insurance company to maintain records?

An insurance company is required to maintain records for the current year plus two prior years, which ensures compliance with regulatory standards and allows for effective oversight and auditing. This requirement helps ensure that there is adequate documentation available for any claims, inquiries, or audits that may arise, thus protecting both the insurer and the policyholders.

Maintaining records for this timeframe also aligns with the typical statute of limitations for various claims and legal actions, providing a clear window for the availability of pertinent information. This approach balances the need for the availability of information with the practicality of storage and management of company records.

Other timeframes presented—only for the current year, past 3 years only, or for an indefinite period—would either not adequately safeguard consumer interests or create unnecessary burdens on the companies in terms of record-keeping and space management. Therefore, the requirement to hold records for the current year and the two preceding years is both practical and beneficial for regulatory compliance and operational efficiency.