Second only to life insurance agents for being blasphemed by the life insurance buying public is the Medical Information Bureau, or MIB. The MIB is a super warehouse of health and lifestyle information gathered from life insurance applications as they are processed by member companies, and yes, when you sign the application you give the company and the MIB authorization to share that information.
A sample MIB disclosure from XYZ Life reads “Information regarding your insurability will be treated as confidential. XYZ Life Insurance Company or its reinsurers may, however, make a brief report thereon to the MIB, Inc., formerly known as Medical Information Bureau, a not-for-profit membership organization of insurance companies, which operates an information exchange on behalf of its members. If you apply to another MIB member company for life or health insurance coverage, or a claim for benefits is submitted to such a company, MIB, upon request, will supply each company with the information about you in its file. Upon receipt of a request from you, MIB will arrange disclosure of any information in your file. Please contact MIB at 866-692-6901 (TTY 866-346-3642). If you question the accuracy of information in MIB’s file, you may contact MIB and seek a correction in accordance with the procedures set forth in the Federal Fair Credit Reporting Act. The address of MIB’s information office is 50 Braintree Hill Park, Suite 400, Braintree, MA 02184-8734. XYZ Life Insurance Company, or its reinsurers, may also release information from its file to other insurance companies to whom you may apply for life or health insurance, or to whom a claim for benefits may be submitted. Information for consumers about MIB may be obtained on its website at www.mib.com.”
Big retail companies have two ways to improve their profit margins and coincidentally keep their prices competitive. They can sell more and they can fight fraud and theft. For life insurance companies that’s where the Medical Information Bureau comes in. Let’s say you apply to XYZ and get your rate class changed from non smoker to smoker because you tested positive on their nicotine use test. It triples the amount of premium you would have to pay so you have four choices. Pay up, lower your coverage and pay up, go without, or go to an insurance company that offers “no exam” life insurance. All you have to do is answer no to nicotine use, no to ever been rated or denied life insurance before and go apply. With no exam there is no test for nicotine use and you are transformed into a life insurance non smoker.
But wait. “Information exchange?” Life insurance companies share that kind of information specifically so consumers can’t game the system and cause adverse selection, a situation where the insurance company is put into an unfair position when someone doesn’t tell the truth. By law life insurance companies have to carry reserves large enough to cover normal mortality, but if an insurer issues a policy based on fraudulent information the reserves could prove inadequate.
It’s not big brother or privacy invasion. Companies become members of MIB because it cuts their bad decisions and losses. Let’s dispel with one urban legend about MIB. There is a general perception that MIB not only has information but also has XYZ company’s decision on file. Not true. ABC company may know that you tested positive for nicotine but they have no idea what XYZ did with that information. They could have changed your rate to a smoking rate or they might have declined you for lying on your application or they might have asked for a tobacco use questionnaire and found out that you smoke cigars and approved you under their special cigar use guidelines.
Being an impaired risk life insurance agent it’s safe to say that most of my clients, if they have previously applied, have information in the MIB that the company I take them to is going to find out. And if the information wasn’t in MIB, after they apply through me it more than likely will be. But that doesn’t stop agents and companies from turning one company’s decline into another company’s approval. It’s true that most of my clients have been declined or rated for life insurance before they come to me. I like that because it lets me know right where we stand and what work needs to be done, so the MIB doesn’t impair my work at all.
Now the bad news. MIB is inhabited by humans and there can be errors just like there are errors occasionally in credit reports. It happens. But, just like the disclosure above says, errors can be corrected and the MIB is very helpful in that process.
Bottom line. Good guy or Bad guy? There’s no doubt they’re good because they help the life insurance industry stay healthy and believe me, agents and clients alike really want that. If you have any questions or feel you have been treated unfairly in a life insurance underwriting decision, please call or email me directly. My name is Ed Hinerman. Let’s talk.
My 20 years of experience give me the knowledge and leverage to find reasonably-priced life insurance for people who have been declined or are paying more than they need to.
IWOULD LIKE TO KNOW HOW? I CAN FIND OUT IF SOME ONE HAS INSURANCE ON ME.
Mr Scott,
I would recommend going to http://www.mib.com/ and using their policy search service. If it can find lost policies or insurance that families have lost track of, it should certainly be able to note anything in force on you. Keep in mind that it is very hard and illegal for someone to take out life insurance on you without your knowledge and consent.
does MIB have anything to your credit score? I was forwarded to the MIB site when reviewing my credit information.
Mr Robles,
MIB has nothing at all to do with credit. They are a clearing house for medical information only
they might be more of a good guy if there information wasn’t so wrong. they stated i had a stent installed in june 2012 which is completely false!
Two statements, one on the MIB website and one in this blog, are factually incorrect.
First, the MIB website clearly states, “You will not have an MIB Consumer File unless you have applied for individually underwritten life or health insurance in the last seven years”. I have done neither, yet MIB holds sensitive information about me, without my knowledge, and without any understanding about how they will use this information or, most importantly, how it will be governed.
Second, the blogger write, “Let’s dispel with one urban legend about MIB. There is a general perception that MIB not only has information but also has XYZ company’s decision on file. Not true. ABC company may know that you tested positive for nicotine but they have no idea what XYZ did with that information.” This is NOT TRUE. Recently I applied for life insurance, and my broker said, “The one thing I did learn is that the conclusion that AUL comes to on your health case is then submitted to your MIB.”
Kumar,
If you have a problem with what the MIB states on their site, you should take them to task for it. Make them tell you where it came from and if it has outlived their stated 7 years, tell them to remove it. Have you done that? Have they refused to remove it?
It sounds like either I or the broker you were getting health insurance through doesn’t know what they’re talking about. You claim my statement is “NOT TRUE” because this other person told you differently. Get your MIB report and if you can prove me wrong I will most certainly apologize to the reader’s of this blog and take the MIB to task. So far you have no evidence that I’m wrong and the other guy is right, so chill, get your MIB report and deal with your bigger problem, potentially outdated sensitive information.
Mr. Hinerman,
I beg to differ with you on your incorrect assumption and/or statement that “when you sign the application you give the company and the MIB authorization to share that information”.
Not only is incorrect but in violation of the federal “1974 Privacy Act”. In which regardless of whether any insurance company receives a signature from an applicant giving them the consent to acquire medical information from their medical providers, it is exactly that, “Consent to provide” not consent to share!!
As usual some brain child in the insurance industry, of course including but limited to the founders of MIB (now being referred to as the “Men in Black” and not in a positive way) found the need to obviously miss-interpret the Fair Credit Reporting Act “FCRA” as a clearing house for whatever they wish to use it for, wrong!
Not only wss the FCRA for the purposes of protecting consumers from companies that incorrectly report information on a consumer, but it is for the purposes of reporting credit, not federally protected personal information e.g. medical, family history etc..
Medical history is personal and privileged information that cannot be stored by anyone other than a physician or hospital for the purposes of determining necessary the future care for their patients, not for the purposes of being shared with or by insurances companies for determining ones medical credibility, and certainly not for the storage of inaccurate medical information or old medical information on a person that is obviously not being purged from MIB’s system, which is why it is not allowed by law and something that is in the process of being corrected.
And wish to cite the following as an example;
A man in his mid 40’s applied for $300k life ins policy and in that process he signed a “Release of medical information” form provided by his life insurance company.
Now although he signed a release permitting his life insurance company to acquire his medical history, it was also very specific to the physicians and/or medical providers he listed on his application. And in way did he ever give permission to the ins. co. to acquire medical information or history using an outside reporting source, in this case MIB.
And as you might have guessed, not unlike Equifax, Trans-Union or Experian covered under the FCRA, the information acquired is only as good as the supplier of that information, and MIB is not permitted to request medical information from anyone other than that of which has been identified by the applicant, and it can only be what is available from the past three years.
So in the case of my client; his family had suffered from a massive heart attack that consequently took his life, but it was not the result of Coronary disease but in fact the result of self-imposed medical issues brought on by stressed life style that included excessive drinking, neither of which were hereditary. However, this was miss-interpreted by an underwriting “expert” as implied that his father had “Heart Disease” which was not disclosed in his application and was therefore denied coverage.
Interpretation of heart disease, on what grounds, none! The heart attack was not a condition but rather the end result, and even though my client did not list this his application, is was taken from transcripts in medical records as provided by someone other than his family physician as recorded in a questionnaire from numerous years (8) prior to application.
So who is MIB protecting, certainly not those who subscribe to the service, for led to a libelous law suite that will set precedence and no doubt case history and a victory for those being unfairly treated by the insurance industry.
And so to conclude, there is no doubt that the MIB was formed by the insurance industry and for the industry and this will come to end, I promise you that!
Sincerely,
M.A. Walsh
Good story. All life insurance applications I’ve seen ask if a client has had a heart attack, whether caused by CAD or a close encounter with a water buffalo. If your client answered no then he misrepresented his medical history. You as the agent asking the questions should know that you can’t submit to an underwriter what you think is relevant. You have to submit the whole story and let them decide if it was relevant. Sounds like you screwed up on behalf of your client and now want to blame it on the MIB.
I don’t have the time to address how many times you are wrong in your comments, but I stand by the fact that MIB is needed in the business.