GQ Corner
Q. How long must an insurance carrier retain a file? Stated another way, when can we “close” a file for the purposes of reserves, etc.?
A. There are different deadlines for different entities:
Carrier Records Retention
- There is no provision in the Texas Insurance Code or Texas Labor Code that provides for or allows a carrier to create a retention schedule. Unlike TPAs, carriers are not allowed to destroy or “close” files under Texas law. Therefore, once an injury is deemed compensable, the file must remain “open” indefinitely, and the carrier must maintain it. Internal protocols for suspending activity on files is not file “closure” as the carrier must be able to “reopen” them immediately. The division does not consider an insured’s non-funding of reserves an excuse for the inability to pay benefits timely and accurately.
Third-Party Administrator (TPA) Retention
- Under Chapter 4151 of the Texas Insurance Code, TPAs must retain records for five years following the transfer of books and records to a new TPA. This provision specifically addresses the responsibilities of TPAs during such transitions. The new TPA must retain the records until it transfers them to another TPA, plus five years.
DWC Claim File Retention
- According to Texas Labor Code §402.081(b), the Texas Department of Insurance, Division of Workers’ Compensation (TDI-DWC) must maintain certain workers’ compensation claim files, such as injury reports, wage records, medical reports, and dispute resolution requests.
- Texas Labor Code §408.081 cross-references Chapter 441.185 of the Texas Government Code, which states that claim files must be retained for 50 years.
Ultimately there is no basis for a carrier to refuse to retain the records for less than 50 years.
FOLIO
