What You Should Know About the Medical Insurance Bureau (MIB)

The Medical Insurance Bureau (MIB), previously known as the Medical Information Bureau, is for insurance companies what credit reporting agencies are for money lenders.

Just as credit reporting agencies store information regarding your credit history that allows lenders to decide whether they should lend you money, the MIB contains your medical history and other records that help underwriters determine your insurability and set premium rates.

Keep on reading to learn more about the MIB, how it works, and how it helps both the insurance company and the applicant.

What is the MIB?

Established in 1902 and operating in the U.S. and Canada, theMIB Group is a not-for-profit and member-owned organization. The medical information bureau (MIB) is essentially an information exchange among insurers. It has a database which contains information about factors that can affect your insurability. An insurance company can access and search it while evaluating a person’s risk and eligibility for coverage.  

Life and health insurance companies contribute information to the MIB’s database. Other insurance providers use it to double-check new applications for errors, representations, and omissions. Before extending coverage to an applicant, insurance carriers may want to find out all about their health history, driving records, drug use, family medical history, etc. The more they know about them, the better they can judge their insurability. The MIB is one of the tools an insurance company can use to research applicants.

For instance, when you apply for life insurance, the insurer will check the MIB to see if you have any illness that you did not disclose. If the MIB database shows that your application is missing key information, the insurer is likely to do further research before extending your coverage.  

The MIB’s goal is to minimize fraud, which in turn helps keep premium rates low and affordable. It does not provide any underwriting services, nor does it impact your insurability as long as you have filled in your application truthfully and accurately.

How does the MIB work?

The MIB is owned by about 430 life and health insurance companies. When you apply for coverage with any medical information bureau (MIB) member, the underwriting information from your application may go to the MIB’s database. This includes your:

• health conditions

• criminal record

• driving record

• occupation status

• participation in risky activities

• foreign travel

It is important to note that the MIB does not collect your actual medical records. Instead, your information is stored in a coded format to ensure privacy. The database does not contain approval or denial information from insurers and only the MIB members can access this information.

When you apply for a life or health insurance policy, it is important to answer all questions accurately and truthfully. Insurance carriers do extensive research to cross-check the information provided by applicants. TheMIB is one of the many tools used by them for this purpose. If the MIB’s database suggests you may not have listed an important detail on your application, the insurer will look into the matter more deeply.

The information in the MIB’s database can go back seven years. So, you will have a file only if you have applied for a policy with a member life insurance company in the past seven years.

Why is the MIB important in the insurance sector?

The MIB alerts life and health insurance companies too missions, misrepresentations, or errors made by people on their applications. In short, it helps an insurance company to accurately assess an applicant’s insurability and lower the risk of fraud. This, in turn, helps keep the premiums affordable for policyholders.

Insurance companies generally pass on the costs associated with bogus claims and fighting fraud to consumers. So, the fewer the insurance frauds, the more affordable life and health insurance products will be.

What does the MIB mean to the insurer and the insured?

Checking life insurance applications against the MIB’s records helps insurers fight fraud. Insurance carriers set your premium rates on the basis of how likely you are to die within the policy term. Assuming other things remain equal, the greater the risk, the higher the premium rate.

By running an MIB check, insurance companies can make sure they are not awarding low rates to undeserving applicants. For instance, someone who used to smoke but has not mentioned this information in their recent application.  

A proper evaluation of applications, however, helps the applicants as well. It is an open secret that the insurers pass the cost of fraud on to their consumers. By minimizing insurance frauds, the MIB helps keep insurance premiums in check, which bodes well for consumers.  

How does the MIB minimize cost for the consumer?

The MIB helps insurers combat fraud and, by extension, keep insurance costs in check.

Are your medical records collected by the MIB?

MIB neither collects nor stores a person’s actual medical records in its database. So, your file will not have your lab test results, physician statements, x-rays, etc. Instead, MIB uses specific codes to store medical information, making sure personal details about your medical history are not disclosed. For example, if you had prostate cancer and underwent surgery, your medical information bureau (MIB) file will only have a code for it.

Is your privacy protected with the MIB?

Since the insurance companies do not share your exact medical records, your privacy is protected. The information in MIB’s database is present in a coded format, which does not contain any personal identifiers.In addition, the MIB states that the gathered information is intended for minimizing fraud in insurance and shared with its members only for underwriting purposes.Last but not the least, the MIB will not sell the personal information they have to any third party.

How long does the MIB have your medical history?

The MIB stores information regarding you for seven years.After that, it is removed from its database

Common myths about the MIB

There are many myths and misconceptions floating around about MIB. The six most common ones are:

1.  Insurance companies can send your information to MIB without your knowledge

Insurance companies cannot send your information to MIB without obtaining your consent. Nor can they access your MIB consumer file unless they have your permission. When you apply for a life or health policy, the application should include a disclosure explaining how your personal and medical information will be used.

2.  Everyone has an MIB file

Only MIB-member companies can add information to and access information from the MIB’s database. Since only individual policies require underwriting, you will have a MIB report only if you have applied for such a policy at one of the MIB-member companies.

There will be no MIB file if:

• You have never applied for life or health insurance with an MIB-member insurance company

• You last applied for life or health coverage more than seven years ago

• You have only applied for group life or health insurance so far 

3.  Every insurance company uses theMIB to check applications

At present, the MIB is owned by roughly 430 member insurance companies. Only they can access the MIB database to cross-check applications for fraud and misrepresentation. Any insurance company that is not an MIB member cannot access its database.

4.  MIB files makes you uninsurable

The MIB’s goal is to weed out fraud — not to impact an applicant’s insurability. Its database stores information in coded formats. These codes do not provide underwriters with enough information to judge someone’s insurability since they usually represent broad categories of health conditions or histories. However, MIB codes do help underwriters check whether an applicant has omitted some important information on their application or not. If someone’s MIB report reveals information not included in the application, the insurer will likely investigate further.

If you answer all the questions on your application accurately and honestly, your MIB report will have little or no impact on your application because the underwriter will already know everything that is important.

5.  The MIB makes it difficult to view or change records

You can request one copy of your MIB file at no charge per year. In the unlikely event of some mistake in your file, you can ask the MIB fora review by submitting a request online or over the phone. The MIB will recheck and get back to you within 45 days.

6.  MIB knows if you were declined coverage

The MIB has information pertaining to your medical history, criminal activity, driving record, and the like. But that is pretty much all they have got on you. Insurance companies do not tell the MIB about their decision when they accept or reject an applicant. This information is strictly confidential.So, when you apply for coverage, you can rest easy knowing the underwriting decision will not be revealed to the MIB in any circumstance.

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Can I see my MIB records?

Whether you have applied for health or life insurance earlier or are planning to apply for a new policy, you may be wondering what information is there on your MIB file, if you have one. Well, the easiest way to find out is to request your own copy for free.

MIB allows you to request one copy of your file at no charge per year. To submit a request, visit their website or call their toll-free number. Your file contains:

• Your personal and medical information going back to seven years

• The name of the member life insurance company that reported this information

• The date of the report

• Any insurance provider that has requested your MIB file

You will have an MIB file only if you have applied for individual health or life insurance in the past seven years. However, if you are in good health and have no health issues, you may not be in the MIB database even then.

Can I alter my records?

If you find that some of the information in your MIB file is inaccurate or incomplete, you can request changes by contacting MIB. MIB will then investigate the matter and send you the results of their findings within 45 days. Fortunately, only 1% to 2% of files contain errors, so the chances of your needing to alter your records are low.  

Conclusion

The MIB is one of the tools available to insurance companies to combat fraud. It functions as an information exchange for its430-odd members, allowing them to double-check applications for errors, misrepresentations, and omissions. By reducing the instances of fraud, the MIB helps keep insurance costs low, which is exactly what every applicant wants. Dundas Life works with many top Canadian insurers, and can help you find coverage that perfectly meets your insurance needs and fits your current budget.