South Carolina Life Insurance Practice Exam

Which entities make up the Medical Information Bureau?

1. Insurers

2. Policyholders

3. Agents

4. Financial institutions

The correct answer is: Insurers

The Medical Information Bureau (MIB) is primarily composed of member insurance companies, making insurers the correct answer. The MIB serves as a cooperative database that helps providers of life and health insurance assess the risk they take when underwriting policies. Insurers contribute data about applications and claims, as well as various medical conditions of applicants. This shared information assists insurers in making informed decisions about issuing policies, thus promoting accuracy and reducing fraud in the applications filed by prospective policyholders. Other entities, while involved in different capacities within the insurance ecosystem, do not comprise the MIB. Policyholders, for example, are the individuals who purchase insurance but do not play a role in the governance or contribution of data to the MIB. Agents, while they facilitate the sale and distribution of insurance products, are also not part of the MIB's structure. Similarly, financial institutions may interact with insurers regarding coverage or premium payment but do not contribute to the MIB either. Therefore, the purpose and composition of the MIB are clearly linked to the collection and sharing of information among insurers themselves.