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Record Must Be Kept on File under NCUA, Lending Regulations
From CUNA Mutual Group, Lending Compliance
NCUA and other lending regulators govern the length of time loan documents and account records must be kept. Likewise, insurance regulations dictate the length of time insurance documents and transaction records must be maintained.
Insurers are routinely required to produce insurance documents and records for transactions that occurred up to six years earlier.
Our streamlined credit insurance processes keep the costs of insurance reasonable for your members. We rely on your credit union to handle many aspects of the member interface. As a result, many of the records related to credit insurance transactions are retained solely by your credit union. The group policy states that your credit union must make available to us, on request, any books and records pertaining to coverage under the policy. This language is consistent with the obligations imposed by state insurance laws.
To comply with insurance record retention laws and regulations as well as routine record requests from regulators, it is imperative that the documents and records you retain on our behalf be retrieved and provided promptly upon request. As we work together to offer your members a credit insurance program that is administered in compliance with state and federal regulations, we need to be able to respond to regulators without delay by producing these important documents.
Record Retention Requirements
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Credit Insurance Document or Record Type
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Closed-End Loans or Open-End Plans Using Separate Enrollment for each Advance
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Open-End Plans Using Single Enrollment for the Entire Plan (including Future Advances))
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- Any insurance
enrollment form
- Any insurance declination/waiver form
- Certificate of Insurance
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Six years after repayment of the loan or advance
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Six years after the member cancels credit union membership or after the credit union cancels the group policy with CUNA Mutual.
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Member account records that reflect credit insurance premium charges, refunds, and benefit payments.
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Six years after the insurance premium charge, refund, or benefit payment transaction date.
Note: Since NCUA recommends individual share and loan ledgers be retained permanently, your existing procedures should already be in compliance.
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Credit union regulators generally state that paid notes, applications of paid loans, and disclosure forms may be destroyed after a certain period of time. Credit union regulatory requirements however, do not address insurance enrollment, waiver, or certificate forms. If the loan file contains insurance enrollment, waiver or certificate forms, the loan files (or at a minimum these specific insurance documents) must be retained according to the retention period specified in this chart, which may be longer than your credit union’s general regulatory requirements.
Record Retention Methods
Record retention methods can vary depending on credit union business practices. We suggest that you choose whatever process allows for easiest access and retrieval of insurance documents. Some acceptable methods include:
- Paper originals
- Copies
- Microfilm
- Microfiche
- Magnetic tape
- Electronic image format that allows for the identification, storage, and reconstruction of the documents and records
You may need to modify your loan file maintenance practices to comply with insurance record retention requirements. For example, enrollment forms, declinations/waivers, and certificates are usually maintained in the member’s loan file. However, if the credit union has a destruction schedule for loan files that is inconsistent with the insurance record retention requirements, you’ll need to establish a process to ensure that enrollment forms, waivers and certificates are retained for the required periods.
If certificates of insurance are not maintained in each member’s loan file, your credit union must maintain a master file that includes samples of the certificates issued with a record indicating the dates and circumstances of how each certificate was used.
MARC-0307-D226
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