Mib In Life Insurance: What You Need To Know

The MIB, or Medical Information Bureau, is a resource used by life insurance companies to assess risk and evaluate life insurance applications. It is a not-for-profit entity that has been operating for over 100 years in the United States and Canada. The MIB helps insurance companies make decisions about offering life, health, long-term care, critical illness, and disability insurance policies to consumers. It functions similarly to a credit bureau for insurance-related information, with insurance companies using it as a tool to protect themselves from fraudulent activity.

The MIB's role in the life insurance application process

The Medical Information Bureau (MIB) is a crucial player in the life insurance application process, offering a unique service that benefits both insurers and consumers. The MIB is a non-profit entity, owned and utilised by hundreds of insurance companies in North America. Its primary role is to help insurers assess applicants' risk and eligibility for life insurance coverage, while also ensuring the security and accuracy of consumer data.

When an individual applies for life insurance, they provide extensive personal information, including their health history. Insurers then use the MIB as an external source to gather additional data. The MIB provides coded reports that alert insurers to potential errors, omissions, or misrepresentations on the application. These codes relate to medical conditions, risky hobbies, and adverse driving records. The absence of personal identifiers in these reports protects consumers' privacy, complying with HIPAA regulations.

The MIB's coded system helps insurers verify the accuracy of applicants' information. If an insurer discovers inconsistencies between the MIB report and the application, they are prompted to conduct further investigations. This process ensures that insurers have a complete and accurate health profile of the applicant before making coverage decisions.

In addition to its role in fraud prevention, the MIB also contributes to maintaining a fair marketplace for insurance carriers. By helping insurers accurately assess and select risks, the MIB plays a key role in keeping insurance premiums affordable for consumers. The MIB estimates that its services save its member companies over $1 billion annually.

Consumers also benefit from the MIB's commitment to transparency and accuracy. They can request access to their MIB report for free, ensuring the completeness and accuracy of their information. If inaccuracies are found, consumers have the right to dispute their file and request a reinvestigation, which the MIB must conduct free of charge.

How the MIB helps insurers assess applicants' risk

The MIB (formerly the Medical Information Bureau) is a membership corporation owned by approximately 430 member insurance companies in the United States and Canada. It provides services designed to protect insurers, policyholders, and applicants from attempts to conceal or omit information material to underwriting life and health insurance.

The MIB's services are used exclusively by its member life insurance companies to assess an individual's risk and eligibility during the underwriting of life, health, disability income, critical illness, and long-term care insurance policies. These services "alert" underwriters to errors, omissions, or misrepresentations made on insurance applications.

Here's how the MIB helps insurers assess applicants' risk:

Verifying Application Data

Insurers use MIB data to verify the information they receive on an application against other applications submitted over the past seven years. This helps insurance companies identify possible errors, omissions, and misrepresentations on an application.

Investigating Discrepancies

If the information from an MIB report is inconsistent with the information on a life insurance application, the insurance company may investigate the applicant's medical history or other conditions before making an approval decision. This allows insurers to obtain a more complete picture of the applicant's health and risk profile.

Increasing Efficiency and Accuracy

MIB data increases the efficiency and accuracy of the application process. By providing data points that flag fraud and inconsistencies, insurers can make faster and more informed decisions on applications that don't raise any red flags. Accurate information also helps insurance companies keep costs in check, benefiting both consumers and insurers.

Alerting to Medical Conditions and Risky Hobbies

The MIB's coded reports provide information on medical conditions and details on risky hobbies, such as skydiving or rock climbing, which may impact an applicant's health or longevity. This information helps insurers assess the applicant's risk profile and make informed underwriting decisions.

Detecting Anti-Selection

The MIB helps insurance companies reduce the risk of anti-selection, which occurs when an insurance company insures an individual at a lower risk rating due to misrepresentations in the underwriting process. By providing a central repository for information, the MIB simplifies the process of guarding against anti-selection for its member insurance companies.

Overall, the MIB plays a crucial role in helping insurers assess applicants' risk by providing an external source of data that ensures fair premium classifications and helps maintain a balanced insurance marketplace.

How the MIB maintains data security and accuracy

The Medical Information Bureau (MIB) is committed to maintaining data security and accuracy. This is achieved through several measures, including:

• Coded Data Format: The MIB stores and provides consumer information in a coded format. This means that medical records are not stored directly but are instead represented by codes that correlate to medical and avocational data relevant to the underwriting process. This helps to protect the privacy and confidentiality of consumer information.
• Limited Access: Access to MIB records is strictly limited to authorized individuals at the MIB itself or at member firms. Only underwriters working for member firms are allowed to enter a code in the system. Additionally, each time an individual requests access to a report, they must provide their authorization credentials to prevent any unauthorized release of data.
• HIPAA Compliance: The MIB must comply with the Health Insurance Portability and Accountability Act (HIPAA) regulations regarding the security and privacy of healthcare records. This ensures that the MIB adheres to strict standards for protecting sensitive health information.
• Data Retention Policy: The MIB only retains consumer information for a limited period. Codes remain active in the system for seven years, after which they are removed. This helps to ensure that data is not kept indefinitely and reduces the risk of outdated or irrelevant information being used.
• Consumer Access and Dispute Resolution: The MIB allows consumers to access their files and verify the accuracy and completeness of the information. Consumers can request a copy of their MIB report once a year and dispute any inaccuracies through a reinvestigation process outlined in the Fair Credit Reporting Act. This helps to ensure that consumers have a say in the data that is being collected and can take action if they find any errors or omissions.
• Data Security Measures: Given the sensitive nature of the information it handles, the MIB implements robust security standards to protect its database from unauthorized access, hacking, and other cyber threats. While the specific security measures may not be publicly known, the MIB prioritizes safeguarding its data to prevent data breaches and identity theft.

By adhering to these measures, the MIB strives to maintain the security and accuracy of its data, protecting consumer privacy and ensuring that insurance companies have reliable information for their underwriting decisions.

How the MIB's information is used by insurance carriers

The MIB (Medical Information Bureau) provides insurance carriers with coded reports that contain information such as medical conditions, details of risky hobbies (e.g. skydiving or rock climbing), and adverse driving records. These reports help insurance companies verify the information provided by the applicant and protect against fraud.

If there is a discrepancy between the MIB's coded report and the information provided by the applicant, the insurance company's underwriters are required to conduct a further investigation to obtain additional details about the applicant's risks, conditions, and/or medical history before making a coverage decision. This helps insurance companies verify the information provided by the applicant and protect against fraud by ensuring that the applicant's information is consistent with previous applications.

The MIB report is one factor that contributes to an applicant's overall profile and helps insurance companies set premiums accurately. The report includes information about the applicant's life insurance applications over the last three to five years, including the date of any previous applications, the date of diagnosis or treatment for an illness, known medical conditions, and the source of the medical history.

Insurance companies use the MIB to detect errors, omissions, or misrepresentations in insurance applications, which helps lower the risk for insurance companies in approving "risky" applicants. This, in turn, helps maintain a more equitable marketplace for insurance carriers and lowers the cost of insurance for consumers.

How to access and dispute your MIB report

The Medical Information Bureau (MIB) is a non-profit organisation that collects and maintains information on insurance applicants. It was founded in 1902 by a group of life insurance companies to create an industry-wide database to combat fraud and support the underwriting process.

The MIB maintains records of individuals who have applied for life, health, critical illness, disability, or long-term care insurance policies in the past seven years. The information is stored in coded form to protect personal information.

You can access your MIB report by submitting an online form or calling the MIB directly at 1-866-692-6901. You are entitled to one free report annually.

If you believe there is an error on your MIB report, you can dispute it by initiating a reinvestigation process. This can be done by signing a Request for Reinvestigation form on the MIB website or by submitting a signed letter. There is no fee for submitting a dispute. You will need to provide the following information:

• Your full name, including middle initial and suffix
• Date and place of birth
• Last four digits of your Social Security Number or Social Identification Number (for Canadians)
• A list of each item on the MIB Consumer File that you believe to be incorrect or incomplete, including specific details about the inaccuracy

The reinvestigation process can take up to 45 days, and you will be informed of the results by mail.

Frequently asked questions