Monday, November 24, 2008

How Underwriters Verify the Information on Your Application

Underwriters have several tools at their disposal to confirm information provided by prospective applicants.

The Medical Information Bureau

Insurance underwriters often check the information you put on your application against your Medical Information Bureau (MIB) report. Your MIB report is to your medical history what your credit report is to your financial history or what a Dun & Bradstreet rating is to the creditworthiness of your business. MIB, a central database on the health history of tens of millions of Americans, is shared by approximately 600 life and health insurance companies.

When you apply for individually underwritten life or health insurance, or when you participate in a group insurance plan in which an insurance carrier underwrites the health of your group, you typically give the underwriter permission to send your health information to the MIB. MIB keeps information on file for seven years.

MIB is not subject to HIPAA privacy regulations, but MIB is a consumer reporting agency subject to the Fair Credit Reporting Act. As with a credit report, if you are denied insurance based on an MIB report, you are entitled to a free report and the opportunity to have any erroneous information corrected.

Telephone Verification Calls

Most carriers do telephone verifications of the information on your application. After you apply, you should expect to receive a telephone call from the insurance company to verify at least a few questions on your application. A verification call is always recorded and is typically with a juniorlevel employee rather than with a senior underwriter with whom you can discuss your health issues.

Requests for More Information

If you have checked yes to any of the hundred or so checklist questions on specific diseases or treatments, the underwriter may request a specific medical report from one or more of your medical providers. This is usually done without your knowledge since your signature on the application gives the underwriter permission to obtain this information and gives the medical provider permission to share it. It also typically gives the underwriter permission to share such information with the MIB.

About 5 percent of the time, the underwriter is not comfortable with the paper trail of your medical history or wants a professional to examine you for a specific issue and requests an Attending Physicians Statement (APS). In such a case, you are directed to see a local physician for a medical exam, or a doctor who has seen you recently is requested to send his or her medical notes to the carrier.

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