The Medical Information Bureau (a/k/a, MIB Group, Inc., a/k/a, MIB, Inc., a/k/a, MIB Solutions, Inc.) is the nation’s largest insurance reporting agency. Under Federal law, every consumer is entitled to a free annual copy of their medical report file.
MIB’s basic purpose was (and continues to be) to detect and deter fraud and misrepresentation in connection with the underwriting of life and health insurance and claims. MIB helps “keep the cost of insurance down for insurance companies and for consumers by preventing losses that would occur due to fraud or omissions,” says Neil Day, MIB’s president.
For many years, insurance agencies consulted MIB without telling applicants about the files. MIB even had an unlisted phone number. Today, the secret continues, if to a lesser extent: MIB won’t establish a secure website for consumers to request, review, and dispute their MIB medical reports.
In the past the Medical Information Bureau (MIB) reported codes in consumers’ files for such non-medical information as “sexual deviance” and “sloppy appearance.” MIB, Inc. President Neil Day disagrees, but since the Medical Information Bureau (MIB) won’t release the list of conditions for which it has created codes, there is really no way to know for sure. There have also been disagreements over the accuracy of MIB’s files.
The following MIB FACT SHEET was printed in January, 1990 by the Medical Information Bureau (MIB Inc.), P.O. Box 801 Boston, MA 02103, (617 329-4500) by Mary E. Crowley, Manager MIB Information Office.
The following information is prepared as a concise and current fact sheet which describes MIB, Inc. as of the above date [January 1990].
MIB IS A NON-PROFIT ASSOCIATION TO PREVENT FRAUD
MIB, Inc., also known as the Medical Information Bureau, is a non-profit incorporated trade association of about 750 life insurance companies formed to conduct a confidential interchange of underwriting information among its members as an alert against fraud. This interchange enables MIB member companies to protect the interests of insurance consumers as well as the interests of life and health insurance providers.
BASIC PURPOSE IS TO REDUCE THE COST OF INSURANCE
MIB was organized in 1902 by physicians who were medical directors of about 15 life insurance companies. These medical directors recognized that their respective companies had lost substantial sums where fraud was not detected. Such losses meant higher premiums which was not fair to the vast majority of policyholders who were honest. What was needed was a system that would protect the honest consumers against higher premium costs which would be necessary if the forgetful or dishonest applicants were too often successful.
MIB’s basic purpose was (and continues to be) to detect and deter fraud and misrepresentation in connection with the underwriting of life and health insurance and claims. The elimination or reduction of fraud improves conditions in the life insurance industry in several ways. First, MIB’s fraud prevention activities tend to minimize public criticism of the industry, and fosters public confidence by providing assurance that the industry’s products are sold in an honest marketplace. Second, by reducing the incidence of risk misclassification, it contributes importantly to the financial soundness of insurance arrangements, in which the entire industry shares an interest. Third, it advances an important public interest in establishing equitable apportionment of insurance costs among policyholders. Finally, it results in cost savings which are passed on to policyholders in the form of reduced premiums and increased policy dividends.
HOW MIB FUNCTIONS TO MEET THE BASIC PURPOSE
Member companies are required to report a brief, coded resume to the MIB of the relevant results of the underwriting evaluation made at the time of application. Medical conditions are reported by using one or more of about 210 codes. Conditions most commonly reported include height and weight, blood pressure, EKG readings, and X-Rays, but only if the condition is significant to health or longevity. Sometimes, non-medical information of a very restricted nature regarding insurability may be reported. Non-medical codes are reported by using one or more of 5 codes. Significant, and therefore reportable, nonmedical information includes adverse driving record, hazardous sports and aviation activity as confirmed by the applicant or official records. Member companies may not report information or action as to claims made on life, health and disability insurance.
In the interest of sound underwriting and to avoid unfair competitive practices, MIB coded information may not be used as a basis for establishing an applicant’s eligibility for insurance. MIB information is used only to alert members to the possible need for further investigation. An MIB report does not indicate the action that may have been taken in regard to any application for insurance; therefore, an MIB report does not indicate whether an application for insurance is issued, rated or declined. In no case does an MIB report exist unless an insurance application has been made to a member company. All reports more than seven years old are automatically eliminated by computer edit.
MIB MEETS THE EXPECTATION OF CONFIDENTIALITY
All information received by member companies through MIB is held in such manner as will maintain its confidential character. Only member companies may have access to MIB’s record information; it is not released to non-member companies or to credit or consumer reporting agencies or to governmental agencies who do not have a court order or authorization from the consumer. In fact, it is released to a member company only after the consumer has signed a written authorization which permits that company to contact MIB as to a current, pending application for coverage requested by the consumer.
AVAILABILITY OF MIB DISCLOSURE AND CORRECTION PROCEDURES
Legislators, regulators and courts have long recognized MIB as a reasonable business institution which must be subject to high standards of accuracy. As part of the application process, the consumer receives a written notice which describes MIB and its function. The notice also states a Boston phone and mail address (Post Office Box 105, Essex Station, Boston, MA 02112 and 617-426-3660) which a consumer may contact in order to obtain a copy of the consumer’s MIB record, if any, or to seek a correction to the MIB record. Medical information is disclosed to a medical professional designated by the consumer. Nonmedical information is disclosed to the consumer. In an average year, about 7,000 persons request disclosure and about 200 request corrections. These procedures were voluntarily established by MIB in 1971 and were patterned after Federal Law. In 1983, the Federal Trade Commission and MIB agreed that MIB disclosure and correction procedures would be regulated by the FTC and that a few minor changes would be made to MIB Procedures.
Throughout its history, the MIB system has effectively accomplished its basic purpose. Specifically, MIB helps to detect and deter fraud upon its members and their policyholders by proposed insureds and claimants who may omit or seek to conceal facts essential to accurate, proper and reasonable determination of insurance risks.
MIB’s activities have been extensively reviewed by Federal and State legislators and regulators since 1965. Such review confirms that MIB is a reasonable balance between an individual’s right to privacy and an insurers need for protection against fraud or omission. The MIB function is consistent with high standards of confidentiality, accuracy, relevancy and utilization of personal information.
OTHER MIB SYSTEMS
The principal function of MIB, Inc. is the operation of the Medical Information Bureau information exchange as described above. In addition, MIB operates four other systems which collectively represent about 9% of MIB activity.
In 1974, MIB began operating the Alpha Index System for about 30 members. In essence, a subscriber uses the MIB automatic name matching system for location of its own internal records.
In 1980, MIB began operating the DIRS (Disability Insurance Record System) for about 80 subscribers who were concerned about individuals who might overinsure by purchasing disability policies from several insurers.
In 1986, MIB began operating the MIBTRAN system which is now used by about 650 insurers; this system provides the ability to transmit messages between member companies and other organizations such as laboratories, reinsurers and inspection companies.
Finally, MIB is proud of its role in processing mortality and morbidity studies for the life insurance industry. In 1972, MIB offered MIB staff and computer equipment for use in industry studies which are useful to life insurers and of benefit to the medical profession and general public. The MIB Center for Medico-Actuarial Statistics (The Center) has assisted in three major studies and numerous special studies. Such studies are fully processed by MIB and are based on contributions of data submitted by groups of insurers. Such studies provide current information for purposes such as risk classification and research and the studies are made available to the insurance industry, the medical profession and the general public.
MIB IN BRIEF – NEIL DAY, PRESIDENT OF MIB
The President of MIB, Inc., Neil Day, briefly describes the Medical Information Bureau (MIB) as follows:
- A report made to the MIB in 1986 of heart disease will alert an insurer who receives an application in 1989 that the applicant should admit and describe that history.
- MIB provides an alert to MIB members as to applicants who may omit or attempt to conceal essential facts.
- MIB reports are made by MIB members and are available to an MIB member with the written permission of the applicant.
- MIB reports are not used as the basis for an underwriting decision to reject an application or to increase the cost of insurance.
- Underwriting decisions are based on information from applicants and from medical professionals, hospitals, test labs or other facilities but not on MIB reports.
- MIB supervises the exchange of MIB reports among 750 MIB members who are life insurance companies.
- MIB helps to make sure that all applicants pay her or his fair share of costs for life or health coverage.
- Each member furnishes each applicant with a written description of MIB and its review and correction procedures before an application is completed.
- Any person or his or her medical professional can review or correct information in the person’s MIB file.
- Conditions significant to health or longevity such as overweight or hazardous sports are described by 210 medical codes and 5 non-medical codes.
- Readers can contact the MIB Information Office (P.O. Box 105, Essex Station, Boston, MA 02112, 617-426-3660) with questions about MIB or its review and correction procedures.
Medical Information Bureau
P.O. Box 801
Boston, MA 02103
Under Federal law, all consumers are entitled to an annual copy of their medical report files from the nationwide specialty consumer reporting agencies.
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