Is an insurance company allowed to keep claim files out of state? If so, when is it okay?

• A. No, claim files must stay entirely in state.
• B. Yes, if manager has granted written approval.
• C. Yes, if the out-of-state file is for a multi-state claim and approved by a supervisor.
• D. Yes, for archival purposes only.

Answer: (D)

Archival storage off-site is allowed. The idea is that claim records can be kept out of state when they’re inactive and kept for long-term retention (archival), not for active handling. This lets a company move older files to off-site storage while keeping current or actively needed records accessible in a compliant location. The key requirement is that the archived files remain retrievable when needed for audits, regulatory requests, or ongoing investigations, and that appropriate security and confidentiality controls are maintained during storage and any retrieval. Therefore, the scenario described—off-site storage is permissible for archival purposes only.