Which statement about the Medical Information Bureau (MIB) is correct?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
The Medical Information Bureau is a nonprofit trade association whose member life insurers exchange coded medical information reported on life insurance applications. Its purpose is to alert underwriters to possible omissions or discrepancies, not to make final decisions. Under federal law, applicants must be told that information may be reported to the MIB and that they may request a copy of their MIB record and correct any errors. Member insurers make their own individual underwriting decisions based on their own standards, and the MIB's coded reports are only one input among many.
Why the other options are wrong
- B) The MIB is not a government agency and does not license underwriters or issue any credentials. It is a private nonprofit trade association of insurers. It serves the member companies that support it.
- C) The MIB does not decline applicants; member insurers decide based on their own underwriting policies. The MIB only supplies coded information for the insurer to evaluate. The decision to decline belongs to the insurer.
- D) Premium rates are set by individual insurers, not by the MIB, which is purely an information exchange. Rate-making remains a company function driven by mortality, expense, and interest assumptions.
Memory hook
MIB: a coded memo pool among insurers—flags a mismatch, never pulls the trigger itself.