MIB Executive Testifies that Reporting Agency Collects Personal Data on Sexual Deviation

The landmark consumer protection law, the Fair Credit Reporting Act (FCRA) was passed in 1970. The FCRA, which went into effect in 1971, originally exempted disclosure of medical information by data-gathering organizations such as the Medical Information Bureau (MIB), although it did direct disclosure to consumers of information that would be detrimental to a person’s credit rating. In 1973, the U.S. Senate Banking Committee, Subcommittee for Consumer Credit, held hearings on the use of medical information for insurance underwriting.

During these hearings, the Senate subcommittee chairman, Senator William Proxmire, questioned Joseph C. Wilberding, executive director and general counsel of the Medical Information Bureau (MIB). Mr. Wilberding testified that the individual consumer files collected and exchanged by MIB, “included data on sexual deviation, drug addiction, alcoholism and such hazardous hobbies as auto racing and flying.” (Source, “Insurance Data Called Faulty“, The New York Times, October 4, 1973.)

That consumers are largely unaware of the MIB’s existence cannot be blamed on individual apathy or misinformation. The Medical Information Bureau (MIB) was purposefully hidden by its employees. Mr. Wilberding also testified that “applicants for health insurance policies were “not told” that medical information would be made available to the 700 companies that support the data bank, and insisted that applicants “shouldn’t be told.” (more…)

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US News & World Report – How Risky Hobbies Can Raise Your Insurance Rates

US News and World Report LogoU.S. News and World Report discusses how risky hobbies and dangerous “lifestyle” activities that can increase life insurance rates. According to U.S. News, adventurous and thrill-seeking pastimes can cost you more than you think. Some common types of activities that life insurance companies for search for include: motorcycle riding, scuba diving, BASE jumping, hang-gliding, rock climbing, hunting, recreational boating, and international travel to “risky” locations.

Insurance companies are well aware of the groups you’re involved in, the commentary you write on Facebook, the stuff you post on Instagram. If you have a low-value insurance policy, it won’t come up, but if it’s a serious policy that could bring in big numbers, they’ll want more background on you.

Nevertheless, you must always be honest in your application. You might easily think it’s not worth the trouble to tell an insurance company about your love for mountain climbing, and it’s true that it’s probably not smart to volunteer the information. But if you’re asked and lie to an agent or on your application, you’re taking just as much of a risk as the pastime you’re engaged in.

To read the full article, see the U.S. News and World Report – Money Personal Finance website to learn how “How Risky Hobbies Can Raise Your Insurance Rates”.


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Insurance Companies are Mining Online Data To Predict Medical Health and Lifespan

Life insurers are testing new ways to predict life expectancy and are mining personal data online and offline to analyze the health and medical conditions of consumers. According to an investigation by the Wall Street Journal, executives at American International Group Inc., Aviva USA, and Prudential Financial Inc., confirm they are exploring the use of consumer-marketing data to create a “predictive modeling” system for insurance applicants.

Making the approach feasible is a trove of new information held by giant U.S. data-collection firms, such as Acxiom, Alliance Data Systems Corp., Experian PLC, and Infogroup, who each have detailed information on more than 100 million American households. Deloitte Consulting LLP, a major backer of the concept, has pitched it in recent months to numerous insurers.

These data-gathering companies have such extensive files on most U.S. consumers – online shopping details, catalog purchases, magazine subscriptions, leisure activities and information from social-networking sites – that some insurers are exploring whether data can reveal nearly as much about a person as a lab analysis of their bodily fluids.

This data increasingly is gathered online, often with consumers only vaguely aware that separate bits of information about them are being collected and collated in ways that can be surprisingly revealing. In this Wall Street Journal NewsHub video interview, reporter Leslie Scism explains how “Insurers Test Data Profiles to Identify Risk Clients”.

Although the personal information sold by marketing-database firms is lightly regulated, utilizing it in the life insurance application process would “raise questions” about whether the data would be subject to the federal Fair Credit Reporting Act, says Rebecca Kuehn of the Federal Trade Commission’s division of privacy and identity protection.


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Insurers Test Personal Data Files to Identify Risky Applicants

Life insurers are testing an intensely personal new use for the vast dossiers of data being amassed about Americans: predicting people’s longevity. The article “Insurers Test Data Profiles to Identify Risky Clients”, by The Wall Street Journal reveals a remarkable proliferation of the use of consumer-marketing data to create a “predictive modeling” system for insurance applicants.

Insurers have long used blood and urine tests to assess people’s health—a costly process. Today, however, data-gathering companies have such extensive files on most U.S. consumers—online shopping details, catalog purchases, magazine subscriptions, leisure activities and information from social-networking sites—that some insurers are exploring whether data can reveal nearly as much about a person as a lab analysis of their bodily fluids.

Making the approach feasible is a trove of new information being assembled by giant data-collection firms. These companies sort details of online and offline purchases to help categorize people as runners or hikers, dieters or couch potatoes. They scoop up public records such as hunting permits, boat registrations and property transfers. They run surveys designed to coax people to describe their lifestyles and health conditions.

Increasingly, some gather online information, including from social-networking sites. Acxiom Corp., one of the biggest data firms, says it acquires a limited amount of “public” information from social-networking sites, helping “our clients to identify active social-media users, their favorite networks, how socially active they are versus the norm, and on what kind of fan pages they participate.”


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Obama Administration Announces New Pre-Existing Condition Insurance Plan

The United States Department of Health and Human Services Secretary Kathleen Sebelius announced a new “Pre-Existing Condition Insurance Plan” (PCIP) under the Affordable Care Act Program to provide temporary coverage for Americans without health insurance due to pre-existing conditions now through 2014, when the new insurance exchanges are established.

The Pre-Existing Condition Insurance Plan (PCIP), which will be administered either by a state or by the Department of Health and Human Services, will provide a new health coverage option for Americans who have been uninsured for at least six months, have been unable to get health coverage because of a health condition, and are a U.S. citizen or are residing in the United States legally.

Created under the Affordable Care Act, the Pre-Existing Condition Insurance Plan is a transitional program until 2014, when insurers will be banned from discriminating against adults with pre-existing conditions, and individuals and small businesses will have access to more affordable private insurance choices through new competitive Exchanges. In 2014, Members of Congress will also purchase their insurance through Exchanges.

“For too long, Americans with pre-existing conditions have been locked out of our health insurance market,” said Secretary Kathleen Sebelius.  “Today, the Pre-Existing Condition Insurance Plan gives them a new option – the same insurance coverage as a healthy individual if they’ve been uninsured for at least six months because of a medical condition.  This program will provide people the help they need as the nation transitions to a more competitive and fair market place in 2014.” (more…)

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Survey Finds Insurance Premiums Soaring for Individual Policyholders

During the national debate about whether to overhaul the health insurance market, people who were buying coverage on their own were experiencing sharp increases in the cost of their policies, according to a survey released by the Kaiser Family Foundation, a nonprofit health policy research group, in June 2010.

Among those surveyed, individuals reported that they were faced with premium increases averaging 20 percent when they last sought to renew their coverage, reported the Kaiser Family Foundation, which conducted the survey in March and early April.

As reported by the American Medical Association, the Kaiser Family Foundation report, “Survey of People Who Purchase Their Own Insurance,” issued June 21, found that 77% of those who buy individual policies were told that their insurance premiums would increase by a proposed average of 20%.  The remaining 23% were mostly individuals who had been with their plans one year or less.

Sixty-one percent of individuals surveyed stayed with their plans and paid an average 18% more than they had previously. Another 16% switched to cheaper plans, paying an average of 3% less — but 49% of those who switched ended up with fewer benefits. The survey said the average individual rate was $3,606 per year, while the average family rate was $7,102. (more…)

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Selecting and Purchasing a Disability Insurance Policy

Personal finance isn’t just about growing your finances — it’s also about protecting what you have. Most experts advise insuring your home, your car, your health and your life. What many people never get around to doing is insuring their earning power.

According to The Wall Street Journal in a December 2006 article “The Growing Appeal of Disability Insurance”: Even consumer advocates who are often critical of the insurance industry for pushing unnecessary products (such as life insurance for someone with no dependents) say that a disability policy can be a smart buy. “Disability insurance would probably be the one insurance product that is undersold,” says J. Robert Hunter, insurance director for the Consumer Federation of America.

If you have benefits through your employer, you are probably smugly thinking that you are already covered. Check again. You likely have a false sense of security and don’t have coverage. If you do have coverage, it likely is for short-term only (for example, just for five years), or the benefits paid are not enough. What you need is long-term coverage, until social security kicks in (at age 65).

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