Medical Information Bureau: What it is and what it isn't

Medical

Information

Bureau:

What

it

is

and

what

it

isn't

R.D.

ATKINSON,

MCFP

In

recent

years

there

has

been

a

grow-

ing

interest

in

medical

data

files,

espe-

cially

those

that

are

computer-based.

Today

concern

is

being

expressed

about

the

use

and

potential

abuse

of

such

computer

banks,

especially

as

they

re-

late

to

privacy

and

confidentiality.

Each

of

us

needs

to

know

what

a

particular

file

contains,

what

is

its

purpose,

how

confidentiality

is

maintained

and

how

the

individual

can

determine

the

con-

tents

of

his

own

personal

file

with

a

view

to

assessing

accuracy

and

correct-

ing

errors.

Physicians

have

a

respon-

sibility

to

be

informed

on

medical

data

banks

and

to

advise

their

patients

so

that

privacy

and

confidentiality

can

be

protected.

The

purpose

of

this

article

is

to

provide

Canadian

physicians

with

information

on

a

specialized

computer-

based

medical

file,

the

Medical

In-

formation

Bureau

(MIB).

What

is

MIB?

MIB

is

a

non-profit,

unincorporated

trade

association.

It

exchanges

medical

and

certain

nonmedical

underwriting

information

between

its

member

com-

panies.

More

than

700

life

insurance

companies

in

Canada

and

the

United

States

are

members.

One

hundred

and

sixty-six

companies

are

licensed

to

do

life

insurance

business

in

Canada;

of

these

84

are

Canadian

companies.

MIB

membership

is

maintained

by

66

of

the

Canadian

companies

and

by

74

of

the

US

and

other

foreign

companies

that

do

business

in

Canada.

The

bureau

operates

under

a

con-

stitution

and

extensive

rules

designed

to

protect

the

confidentiality

of

stored

information

on

those

who

apply

for

insurance

and

to

promote

efficient

operation.

Eligible

for

membership

is

any

licensed

insurer

in

the

US

and

Reprint

requests:

Dr.

RD.

Atkinson,

medical

director,

individual

life

underwriting

operations,

Mutual

Life

Assurance

Co.

of

Canada,

Z27

King

St.,

S.,

waterloo,

Ont.

N2J

1R2

Canada

who

offers

life

insurance

on

the

level

premium

legal

reserve

plan.

Each

company,

to

qualify

for

member-

ship,

must

have

its

medical

affairs

ad-

ministered

by

a

medical

director

who

is

a

qualified

physician

and

surgeon

in

good

standing.

The

medical

director

is

accountable

for

seeing

that

the

rules

are

followed

in

his

company.

One

of

the

rules

of

membership

is

completion

of

a

pledge

to

observe

the

MIB

constitution

and

rules.

The

pledge

is

executed

by

the

member's

chief

exec-

utive

officer,

medical

director

and

chief

underwriter.

Activities

of

the

bureau

are

super-

vised

by

an

executive

committee

of

nine

members

elected

by

the

entire

membership.

Four

must

be

medical

di-

rectors;

the

others

are

senior

lay

in-

surance

company

officers.

In

1890

a

rejection

exchange

was

founded

by

a

group

of

life

insurance

medical

directors

to

exchange

informa-

tion

on

the

health

of

life

insurance

applicants.

Its

purpose

was

to

protect

against

abuse

that

threatened

to

in-

crease

the

cost

of

life

insurance

to

pol-

icyholders

by

reason

of

"antiselection".

This

exchange

was

superseded

in

1902

by

a

new

exchange

operated

by

the

Association

of

Life

Insurance

Medical

Directors

of

America

(ALIMDA).

A

major

reorganization

in

1947

estab-

lished

the

MIB

as

a

separate

institution

with

medical

directors

continuing

to

play

a

key

supervisory

and

advisory

role.

The

bureau

has

since

grown

and

evolved,

the

major

change

in

the

past

decade

being

automation.

Purposes,

value

The

constitution

of

the

MIB

states

the

purposes

of

the

bureau:

a) to

effectuate

the

free

exchange

among

its

members

of

underwriting

and

claims

information

with

respect

to

ap-

plicants

for

insurance,

insureds,

and

in-

surance

claimants.

The

exchange

of

such

information

shall

be

effectuated

in

such

a

manner

as

may

be

deemed

best

to

protect

the

confidential

nature

of

the

in-

formation

exchanged

and

the

interest

with

respect

thereto

of

the

applicants,

insureds,

and

claimants

as

well

as

the

insurers

concerned.

b) to

aid

the

members

in

their

consider-

ation

of respective

insurance

risks

by

making

available

information

which

is

relevant

and

necessary

to

careful

under-

writing

procedures.

This

information

shall

not

be

considered

a

substitute

for

normal

medical

and

inspection

activities

on

the

part

of

the

member

companies.

c)

to

help

prevent

the

perpetration

of

fraud

upon

the

members

by

applicants

for

insurance

who

conceal

facts

relevant

to

the

determination

of

the

insurance

risk.

d) to

act

as

a

central

bureau

for

med-

ical-actuarial

statistics

and

to

assist

in

mortality,

morbidity

and

related

studies.

Bureau's

main

purpose

Briefly,

the

main

purpose

of

the

bureau

is

to

alert

members

to

informa-

tion

essential

in

evaluating

risks

for

life

insurance.

Risk

is

thus

assessed

equitably

at

a

reasonable

underwriting

cost,

resulting

in

lower

premiums

for

insurance

consumers.

Reports

presented

at

the

1975

meeting

of

the

Home

Of-

fice

Life

Underwriters

Association

sup-

ported

again

the

cost-effective

value

of

the

bureau.1

The

conclusion

of

a

non-industry

observer

adds

support

to

these

findings.

The

MIB

serves

an

invaluable

function

in

the

life

insurance

industry

by

meeting

underwriters'

informational

needs.

The

proved

ability

to

set

premiums

which

re-

sult

from

the

use of

the

MIB

benefits

the

policyholders.

It

is

they

who

bear

the

burden

of

increased

costs

if

an

applicant

is

assessed

for

premiums

inadequate

to

cover

the

risk

of

loss

he

represents.2

As

stated

in

the

opening

paragraph

it

is

essential

for

individuals

to

know

what

files

about

them

may

contain.

The

bureau

does

not

store

an

mdi-

vidual's

complete

medical

record,

nor

806

CMA

JOURNAL/OCTOBER

8,

1977/VOL.

117

does

it

store

the

insurance

company's

file

on

the

client.

Only

the

highlights

of

a

medical

record

are

recorded

in

a

brief

three-digit

code

form.

These

are

maintained

on

file

for

7

years,

after

which

they

are

automatically

elimin-

ated.

A

report

consists

of

an

applicant's

name,

date

and

place

of

birth,

area

of

residence

and

occupation

(MIB's

iden-

tifiers

for

file

purposes)

followed

by

one

or

more

three-digit

codes

and

letter

suffixes.

These

indicate

any

reportable

conditions

and

times

of

occurrence

(see

Table

I).

An

average

report

contains

only

two

or

three

coded

entries.

The

coding

system

used

is

purposely

kept

insufficient

so

that

detailed

or

complete

medical

histories

cannot

be

reported.

Many

of

the

code

definitions

are

of

a

general

nature

-

for

example,

gout,

multiple

sclerosis,

coronary

ar-

tery

disease,

retinal

hemorrhage

or

detachment

and

diabetes

mellitus.

Only

authorized

underwriting

and

claims

personnel

have

access

to

the

code;

the

information

is

not

available

to

sales

personnel.

Each

member

company

must

report

significant

underwriting

information

re-

ceived

with

preliminary

or

completed

formal

applications

for

personal

insur-

ance.

The

reports

are

compiled

from

MIB's

official

code

list

of

impairments.

Of

the

information

maintained

by

MIB,

90%

is

medical

underwriting

informa-

tion,

but

there

are

a

few

nonhealth

factors

(such

as

aviation

or

participa-

tion

in

hazardous

sports)

of

significant

interest

to

underwriters.

Favourable

in-

formation

is

reported

as

well

as

un-

favourable.

No

report

may

be

made

of

the

amounts

of

insurance

issued

or

not

is-

sued,

nor

of

underwriting

or

claims

decisions.

Information

is

submitted

by

member

companies

only,

and

then

only

on

about

12%

of

applicants.

The

sources

of

the

company's

information

include

hospitals,

attending

physicians,

insur-

ance

examinations

and

the

applicant

himself.

The

bureau

does

not

employ

investigators,

examine

applicants

or

use

any

consumer

reporting

agencies.

Strict

security

The

information

is

stored

in

a

com-

puter

data

file.

The

bureau

retains

a

servicing

agent,

the

recording

and

sta-

tistical

division

of

Sperry

Rand

Cor-

poration

(R&S),

to

administer

MIB

records

and

correlate

all

information

received

from

the

members.

There

is

strict

security

at

the

computer

site;

R&S

personnel

cannot

decipher

re-

ported

codes

because

they

do

not

have

access

to

any

code

books.

MIB

information

is

released

only

upon

an

applicant's

consent

and

only

Interpretation

Nan.e

Blrthdate

and

Place

-

"Vodiuip

shown

for

medical

conditions

are

hypothetical

examples

a.ldnotttioss

in

actual

us.

when

a

member

company

has

a

bona

fide

application

for

insurance.

If

there

is

information

on

file,

it is

received

in

code

form.

The

report

does

not

contain

the

action

taken

by

the

original,

report-

ing

company,

that

is,

whether

the

ap-

plication

was

rated,

declined

or

re-

stricted.

The

second

company

may

be

alerted

by

information

contained

in

the

report,

but

under

the

rules

it

may

not

base

its

own

decision

on

the

MIB

codes

-

in

fact,

there

simply

isn't

enough

information

in

an

MIB

report

for

an

insurer

to

do

so.

The

second

company

must

conduct

its

own

independent

un-

derwriting

investigation

and

arrive

at

its

own

decision,

which

may

be

quite

different

from

that

of

the

original

re-

porting

company.

The

second

company

Dr.

R.D.

Atkinson

must

report

its

own

findings.

Informa-

tion

on

bureau

files

is

not

available

to

credit

bureaus,

consumer

reporting

agencies,

government

agencies

or

non-

member

companies.

A

member

must

correct

or

eliminate

reports

it

has

made

that

are

subse-

quently

found

to

be

based

on

inac-

curate

data.

Members

must

also

notify

MIB

when

they

believe

another

mem-

ber's

report

may

not

be

correct.

After

receiving

an

MIB

report

and

also

having

either

obtained

a

statement

from

a

medical

source

or

completed

a

med-

ical

examination,

the

member

company

may

request,

through

the

servicing

agency,

details

of

coded

reports

from

the

original

reporting

member.

The

response

to

such

a

request

is

entirely

at

the

discretion

of

the

medical

director

of

the

original

reporting

company.

He

may

decline

to

furnish

details

or

to

disclose

his

company's

identity,

he

may

decide

to

supply

only

the

name

and

address

of

the

information

source

or

he

may

furnish

detailed

information.

During

the

2

years

following

an

ini-

tial

inquiry

on

any

issued

policy,

a

member,

as

a

subscriber

to

the

MIB

follow-up

plan,

may

be

alerted

to

addi-

tional

later

reports

made

to

the

bureau

during

this

"contestable"

period.

This

is

further

protection

against

misrepre-

sentation

in

the

original

application.

Consumer

protection

The

general

rules

of

the

MIB

require

that

the

member

company

advise

each

applicant

for

insurance

about

MIB.

This

is

done

by

a

written

prenotice,

as

prescribed

by

the

executive

committee.

This

document

is

furnished

to

the

ap-

plicant

before

he

completes

the

applica-

tion.

It

informs

the

applicant

of

MIB's

existence

and

operations,

the

possibility

that

a

report

may

be

made

to

the

MIB

and

the

availability

of

procedures

for

disclosure

and

challenging

accuracy.

A

member

cannot

report

to

or

receive

information

from

MIB

unless

pre-

notice

has

been

given.

Further,

no

member

shall

request

MIB

record

in-

formation

pertaining

to

an

individual

without

having

first

obtained

that

in-

dividual's

written

consent

on

a

form

expressly

naming

MIB

as

an

author-

ized

source.

The

prenotice

and

author-

ization

wordings

are

shown

in

Fig.

1.

The

prenotice

contains

the

telephone

number

and

address

of

the

MIB

in-

formation

office

(330

University

Ave.,

Ste

403,

Toronto

M5G

1R7;

416-597-

0590).

Upon

request

and

proper

identi-

fication

MIB

will

clearly

and

accurately

disclose

to

the

applicant

the

nature,

substance

and

source

(that

is

the

name

of

the

reporting

member

company)

of

all

nonmedical

information

on

the

ap-

plicant

that

it

has

in

its

files.

Alter-

natively

it

will

disclose

the

source

of

CMA

JOURNAL/OCTOBER

8,

1977/VOL.

117

807

PreNotice

Fotm

Caxiada

Infonnatioui

regarding

your

Ivusuirabllity

will

be

trebled

as

conuldeutial,

XYZ

C.,npany

uvay.

however,

make

a

brief

report

thereon

to

the

Medical

Information

Bureaus

a

un.preflt

membership

mpnlzatioui

of

LIfe

InstirUeft

Cou.pau1es

which

eperalu

an

Infonnatlon

exchange

en

behalf

of

its

members.

If

you

apply

to

another

bureau

member

company

for

Life

or

Health

insurance

ceverego,

or

a

.lat.n

for

benefits

Is

submitted

to

suck

a

company,

the

Iurou,

upon

request.

will

supply

such

a

company

with

the

Information

in

Its

files.

upon

recoipt

of

a

request

from

you,

the

brean

will

aiTange

disclosure of

any

iufer.uatlon

it

may

have

in

your

file.

(Medical

Information

will

he

disclosed

onLy

to

the

attending

physician).

If

you

question

the

moracy

of

I

vile

the

Rureavi's

file,

you

nusy

contact

the

Rur.ou

ni

seek

a

correction.

The

address

of

the

Bureau's

Information

Office

I&

MedJoel

huforenatkvn

Buroan

330

VelversIty

Avenue

tusite

403

Toronto,

Ontario,

%an..

M5G

IR?

Telephone

.I4

4164634518

XTZ

Company

may

also

release

InformatIon

In

Its

fIle

to

other

Life

Insurance

Cotupanies

to

whom

.ou

may

apply

for

Life

or

Health

Insurance,

or to

wham

a

claim

for

bemfits

may

he

suibmitted.

I

hereby

authorize

any

licensed

physician,

medical

practitioner,

hospital,

clinic

or

other

medical

or

medically

ielated

facility,

Insurance

company,

the

Medical

Informa.

floe

Bureau

or

other

tion,

inStitutloit

or

person,

that

has

any

records

or

knowle4ge

of

tue

or

,y

lveafth,

to

give

to

the

XYZ

Life

Inurance

Cmpany

any

such

hvfor.nation.

Aph

phlccopyofthisauthoitzatloushallbeasvalldastheoriginaL

FIG.

1-Prenotice

form

as

prescribed

by

MIB

executive

committee.

MIB

rules

reoutre

that

the

authorization

should

contain

substantially

the

laneua.e

above.

all

medical

information

in

its

files

on

the

applicant.

On

additional

request,

the

bureau

will

advise

an

applicant

of

the

recipients

of

any

MIB

report

on

him

that

it

has

furnished

within

the

preceding

6

months.

Upon

receipt

of

the

applicant's

writ-

ten

request,

the

bureau

will

request

the

reporting

company

to

disclose

to

the

applicant's

designated

physician

at

least

the

meanings

of

the

codes

reported

to

MIB

and

the

results

of

its

medical

examinations.

Where

the

member

company's

med-

ical

report

has

been

based

on

state-

ments

of

an

attending

physician,

hos-

pital,

clinic

or

other

medical

or

med-

ically

related

facility,

the

medical

direc-

tor

of

the

reporting

company

will

take

reasonable

action

to

see

that

the

ap-

plicant's

current

attending

physician

is

advised

of

the

meanings

of

the

codes,

of

the

source

of

the

information

and,

if

ethical,

the

content

of

the

statements.

In

other

words,

all

medical

information

is

released

through

the

applicant's

own

physician

and

the

company

has

an

op-

portunity

to

amplify

the

basic

disclo-

sure

with

the

documentation

in

its

un-

derwriting

file

when

it

feels

it

is

helpful

or

advisable

to

do

so.

Inaccurate

records

can

be

corrected.

During

the

underwriting

process

a

member

company

is

required

to

correct

any

error

it

discovers.

The

applicant

can

have

errors

corrected

on

disclosure

of

file

information.

Other

procedures

protect

the

privacy

and

confidentiality

of

the

consumer's

records.

The

member

company

is

re-

quired

to

conduct

a

self

audit,

review-

able

by

MIB

staff,

to

determine

wheth-

er

it

has

complied

with

MIB's

constitu-

tion

and

rules

and

whether

its

internal

procedures

have

protected

the

privacy

of

individuals

and

the

confidentiality

of

MIB

record

information

and

code

books.

In

addition,

MIB

has

field

audi-

tors

who

visit

each

member

company

every

2

years.

Unsatisfactory

perform-

ance

and

noncompliance

with

MIB

rules

may

be

reported

to

the

executive

committee

for

appropriate

disciplinary

action.

In

1970

the

liaison

committee

of

ALIMDA

and

the

Society

of

Actuaries

recommended

that

"the

MIB

system

might

well

be

utilized

for

statistical

in-

formation,

not

only

of

underwriting

value

to

the

life

insurance

industry,

but

also

of

substantial

benefit

to

the

medical

profession,

and

thus

to

the

general

public".

Such

a

centre

could

serve

other

purposes.

Actuaries

would

find

helpful

a

system

of

collecting

and

studying

industry

experience

on

the

mortality

associated

with

build,

blood

pressure

and

medical

impairments.

Cur-

rent

intercompany

experience

would

provide

a

statistical

base

to

review

the

fairness

of

today's

underwriting

prac-

tices.

Studies

are

supervised

by

the

liaison

committee

with

day-to-day

guidance

provided

by

a

committee-

appointed

actuary.

In

1973

the

first

study

was

undertaken,

a

comprehen-

sive

investigation

of

the

mortality

of

insured

lives

according

to

variation

in

body

build,

height,

weight

and

blood

pressure.

This should

be

available

in

1978,

updating

a

similar

study

con-

cluded

in

1959.

A

second

intercompany

study

on

auricular

fibrillation

and

mor-

tality

is

now

being

conducted.

Summing

up

Alan

F.

Westin,

professor

of

public

law

and

government,

Columbia

Univer-

sity,

has

stated:

In

order

to

delimit

privacy,

it

seems

to

me,

an

organization

must

ask

itself

three

questions:

What

kinds

of

information

need

to

be

collected

-

that

is,

what

data

are

essential

to the

assigned

function

of

the

organiza-

tion,

and

where

can

the

boundary

be

drawn

between

what

might

be

called

"in-

trusive"

data

collection

and

a

routine

gathering

of

information

that

is

socially

and

legally

acceptable?

Who

has

the

right

to

use

the

information

within

the

organization

-

and

with

whom,

if

anyone,

should

it

be

shared

out-

side

the

organization?

When

do

individuals

get

to

know

what

is

in

their

records,

and

when

are

they

given

procedures

for

contesting

and

correcting

them?3

MIB

by

its

rules

and

procedures

on

consumer

protection,

confidentiality,

operations

and

administration

has

pro-

vided

satisfactory

answers

to

these

questions.

Further,

it

has

dealt

fully

with

the

question

of

confidentiality

by

protecting

its

facilities

against

unau-

thorized

access

or

disclosure.

MIB

con-

tinues

to

serve

the

public

in

helping

to

prevent

antiselection,

thus

keeping

costs

of

insurance

as

low

as

economics

allow

by

reducing

the

need

for

extra

mor-

tality

cost

and

more

extensive

and

ex-

pensive

underwriting

procedures.

Phy-

sicians

continue

to

be

involved

in

the

management

of

the

bureau,

while

the

medical

director

of

each

company

is

accountable

in

the

day-to-day

opera-

tions.

References

1.

Proceedings,

Home

011

ice

Lile

Underwriters

Association

annual

meeting,

1975,

Kansas

City,

McWhirter,

1975

2.

STERN

LC:

Medical

Information

Bureau:

The

Life

Insurer's

Databank.

Rutgers

Journal

ol

Computers

and

the

Law

4:

1,

1974

3.

wEsTIN

AF:

The

Problem

of

Privacy

and

Security

with

Computerized

Data

Collection.

The

Conference

Board

Record

March

1974

808

CMA

JOURNAL/OCTOBER

8,

1977/VOL.

117