The Medical Information Bureau, Inc. (MIB, Inc.) is a nationwide specialty consumer reporting agency for health conditions and personal lifestyle data. The MIB consists of approximately 500 insurance company members.

According to the Federal Trade Commission, MIB’s member companies account for 99 percent of the individual life insurance policies and 80 percent of all health and disability policies issued in the United States and Canada.

“MIB’s value to the insurance industry can hardly be overestimated. Not only to do some applicants forget to list ailments that could cost the insurer money but fraudulent applications are common.”

The Medical Information Bureau, Inc. (MIB, Inc.) also “plays a critical role in the lives of many thousands of individuals, affecting not only their security but their finances as well. But many of those affected have little idea that the MIB played a part. This is partly by design.” (Source, “Medical Bureau is Valuable Unit of Insurance Industry” published by The Associated Press (AP) on July 14, 1971).

Whereas most consumers would never apply for credit without verifying their credit report files, few consumers are aware that insurance companies also use consumer credit reports to evaluate applicants and set prices for policyholders. To prevent rejection for pre-existing conditions, consumers should request a copy of their medical report file (guaranteed under Federal law) to check for errors and accuracy.

For more information about the history of MIB’s adversarial relationship with insurance customers, read the Associated Press (AP) report “Medical Bureau is Valuable Unit of Insurance Industry” from July 14, 1971.

“Medical Bureau is Valuable Unit of Insurance Industry”

NEW YORK (AP) – Among the least known units of the insurance industry is the Medical Information Bureau (MIB), which gathers, controls, and disseminates medical information in 12 million applicants for life [insurance] policies.

The bureau functions in a manner somewhat similar to a credit agency. Its 700 member companies contribute personal medical information obtained from applicants, and they also draw on the data to aid their investigations.

Its stated purpose is to protect the companies against inaccurate applications and thereby prevent individuals with higher than average mortality prospects from upsetting a company’s profits and rates.

It’s value to the insurance industry can hardly be overestimated. Not only to do some applicants forget to list ailments that could cost the insurer money but fraudulent applications are common.

It also plays a critical role in the lives of many thousands of individuals, affecting not only their security but their finances as well. But many of those affected have little idea that the MIB played a part.

This is partly by design. Although it traces its origins to before the turn of the century, it’s executive director stated in a speech to physicians two years ago that “we seldom have gone out in the world to publicize or explain our work.”

In recent years, said Joseph C. Wilberding, the director, the MIB has tried to be more open and frank. But, he told the doctors: “This meeting today is the first time I have talked generally about the bureau outside the confines of the insurance world.”

The MIB is also controversial. Some agents, anxious to earn commissions, feel it is a blacklist. Some critics feel it prejudices an individual’s ability to bargain freely. Others question the sharing of information by companies supposedly competitive.

Wilberding, and quite likely almost all the industry, feel the MIB’s role is not only essential but eminently fair. “It permits the industry to avoid putting a burden on honest policyholders,” said Wilberding in an interview, explaining that if higher risk applicants were insured it would result in higher rates.

“All the MIB does is warn a company, put it on notice regarding the medical history of the person. We do not report that the person was rated or declined insurance. We’re not in that business,” he said.

“Our information is provided by code and only when each application is made. Each company makes its own investigation. Our information cannot be used alone to turn down an applicant.”

Another question still persists: Do most applicants know that the information they provide to their agent may be shared with others? Or do they feel they are involved in a confidential relationship?

Wilberding notes that in most insurance applications the signer authorizes the company to consult with the individual’s doctor. Since April [1971], authorization has been broaden to include other insurers too.

Can an individual obtain information from his file? “If a person writes to us,” said Wilberding, whose office is in Greenwich, Conn., “we will give him what information we can and have the company give him as much as possible.”

More than 30 years later, consumers are still struggling to understand the role of the Medical Information Bureau (MIB) in the insurance purchase process. According to a Consumer Reports investigation in 2008, “few people realize MIB, formerly known as the Medical Information Bureau, has a file on them. Like a credit-reporting agency, MIB monitors virtually every aspect of a person’s health care.”

“When someone applies for health-care coverage, the application is routinely run through MIB’s huge database of health and medical information. Insurers effectively use the MIB data for health-insurance applicants like they use motor-vehicle administration records for auto-insurance applicants, adjusting premiums or even denying coverage based wholly or in part on what is in a person’s MIB file.”

Under a consent agreement with the Federal Trade Commission in 1995, the MIB and its members are required to comply with consumer protections of the Fair Credit Reporting Act at 15 U.S.C. §1681 et seq. (“Nation’s Largest Insurance Reporting Agency Agrees To Expand Consumer Rights.” – http://www.ftc.gov/news-events/press-releases/1995/06/medical-information-bureau)

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