The thorny issue of retention periods – Insurers Beware

There is perhaps no issue under Canadian and international privacy legislation that causes as much grief as the issue of what retention period can be applied to data collected by an organization. However, recently the Office of the Privacy Commissioner of Canada (OPC) provided some guidance that should assist organizations in drawing some parameters around what is an acceptable retention period.

In particular, organizations must ensure retention periods are rationally connected to the purposes for which the information was obtained or the legal obligations that are being cited as a reason for a longer retention. At least in the insurance industry, three years may be an acceptable retention period for retaining information relating to an insurance quote. Organizations may also consider obtaining consent to a specific retention period, provided that the organization is equipped to follow it.

The Limiting Retention Principle

Even in the absence of an express request for deletion, organizations are generally directed by privacy legislation to destroy personal information when it is no longer required to fulfill the purposes for which it was collected (subject to any overriding legal obligations to retain the information). Organizations are also directed to create record retention policies. For example, Principle 4.5.3 of Schedule 1 to the Canadian federal Personal Information Protection and Electronic Documents Act (PIPEDA) states:

Personal information that is no longer required to fulfil the identified purposes should be destroyed, erased, or made anonymous. Organizations shall develop guidelines and implement procedures to govern the destruction of personal information.

However, the direction to destroy information is at odds with the structure of many organization’s systems and information practices, as well as the economic imperative to make larger data sets available for analytical investigation. The result is that many organizations fail to comply with this PIPEDA principle.

Insurance Provider Improperly Retains Information

In PIPEDA Report of Findings #2014-019  (recently posted by the OPC), the OPC considered a complaint by an individual about the retention of his personal information by an insurance provider. Eight years earlier, the insurance provider quoted automobile and home insurance for the individual. When the individual made an access request for his personal information years later, he found that the insurer still had this information on record even though the individual had not enrolled for any insurance. This was in violation of the insurance provider’s own record retention period of seven years.

The individual complained not only about the failure to comply with the insurance provider’s own retention period but also the length of that retention period. Like many organizations, the insurance provider appeared to be using a seven-year period as a guide based on a combination of factors such as statutory requirements, limitation periods on litigation, and other considerations. Even though the insurance had a retention period, the insurance provider had not updated its electronic systems to allow for the purging of electronically held information that exceeded its ordinary retention period (although a project was underway). As many readers will understand, the purging of electronic data contained in complex and interrelated databases is not simple and must be handled carefully to avoid the destabilization of those databases. Many organizations are in a similar position as the insurance provider that found itself investigated by the OPC.

In reviewing the complaint, the OPC concluded that:

  • The insurance provider had breached its own records retention policy, which was a violation of PIPEDA; and
  • The insurance provider was unable to explain why a seven-year period was rationally linked to purposes such as fraud detection and prevention, or laws imposing retention obligations.

The result was that the complaint was held to be well-founded. The insurance provider’s response to the OPC’s recommendations was to agree to only retain insurance quotations for three years to “more appropriately reflect fraud prevention requirements”. The OPC apparently accepted that a three-year retention period was rationally linked to fraud detection and prevention in the insurance industry.


The OPC’s Report of Findings contains a number of takeaways for organizations struggling with retentions periods:

  • The failure to follow an organization’s record retention policy is a violation of PIPEDA. Therefore, make sure your electronic systems can support your record retention policy. Also, ensure your employees follow your record retention policy.
  • The choice of a retention period cannot be arbitrary but should be based on a rational connection between the data and either (i) a purpose for which the information was collected or created or (ii) a specific legal obligation. Organizations should document the reasons for retention periods. Convenience will not persuasive. Instead, consider why the records really must be kept and document those reasons.
  • Information can be kept indefinitely if it is anonymized. Build a robust de-identification program into your systems. It is frequently difficult to “bolt-on” de-identification onto existing systems; therefore, look for opportunities when your organization is upgrading or converting systems.

Intriguingly, in a throw-away line (see the “Lessons Learned”), the OPC recognized that information might be retained for longer than is necessary to fulfill the purposes for which it was collected if the individual consents to a longer retention period.  It is unclear what the OPC means here. It would be difficult to justify retention as being “appropriate” if it exceeded what is necessary to satisfy the purposes for which it was collected and any longer retention period required by law.

However, this statement by the OPC signals a willingness, perhaps, for the OPC to consider an organization’s transparency with respect to how long it keeps personal information and whether the individual consented to that retention period. Organizations may wish to consider obtaining express agreement to retention periods and then following those retention periods, in order to avoid later complaints.