BOX 1.1 The Medical Information Bureau Inc.

The Medical Information Bureau (MIB) Inc. is a nonprofit trade association designed to alert member insurance companies of possible fraud or omissions in life insurance applications. The organization was founded in 1902 by the medical directors of 15 life insurance companies who were concerned that their companies had lost substantial amounts of money because of undetected fraud and omission. Today, MIB has 680 member life insurance companies, including almost every major issuer of individual life, health, and disability insurance in the United States and Canada.

MIB collect information about individuals from its member insurance companies. Member companies are required to submit reports to MIB regarding particular applicants if, in the underwriter's judgment, the application contains information significant to life expectancy, such as high blood pressure. Medical conditions are reported by using one or more of about 210 codes. Conditions most commonly report include height and weight, blood pressure, electrocardiogram readings, and x-rays if—and only if—these facts are commonly considered significant to health or longevity. Five additional codes record nonmedical information that may affect insurability, such as an adverse driving record or participation in hazardous activities MIB receives about 3 million reports per year, representing roughly 10 to 15 percent of all applications. It keeps record in ifs files for 7 years and has a database containing reports on approximately 15 million individuals.

When a consumer applies to an MIB member company for individual life, health, or disability insurance, the company may ask MIB whether it has a record on the consumer. If there is a record, MIB sends it in coded form to authorized personnel at the requesting company. The company may use the MIB report to detect attempts by applicants to omit or misrepresent factual information: it may not use the report as the basis for denying an application. As a matter of sound underwriting, such decisions are based on independent investigations that document medical and nonmedical information about the consumer. As a matter of law, the National Association of Insurance Commissioners (NAIC) Insurance Information and Privacy Protection

information that have been demonstrated in health care settings, this report attempts to demonstrate ways in which privacy and security can be maintained in health care applications of the national information infrastructure. The content of this report is structured to provide illustrations of practical initiatives that can be pursued by health care organizations and to allow a more informed public debate over policy.



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