Illinois Health Insurance Practice Exam

What is the purpose of Medical Information Bureau (MIB) report?

1. A. Determines if total benefits are reasonable compared to applicant's income

2. B. To verify the accuracy and completeness of the application

3. C. Clearing house for medical information for insurance companies

4. D. Establish tax deductions for insurance premiums

The correct answer is: C. Clearing house for medical information for insurance companies

The Medical Information Bureau (MIB) serves as a clearinghouse for medical information for insurance companies, which allows them to share and access specific medical data about applicants. This centralized approach helps insurers verify the information provided in applications, streamlining the underwriting process while reducing potential fraud. By collecting and maintaining records on various health-related factors from past insurance applications, the MIB helps companies assess risk more accurately and efficiently. This is critical in determining whether to approve coverage and at what rates, ultimately aiding insurers in making more informed underwriting decisions. The other choices do not encapsulate the primary function of the MIB, as they pertain either to direct application verification or to financial management concerning insurance premiums, rather than the specific role of the MIB in handling medical information for underwriting purposes.