A prepaid application for individual disability income insurance was recently submitted to an insurer. What action would the insurance company not take after receiving the MIB report?

A prepaid application for individual disability income insurance was recently submitted to an insurer. What action would the insurance company not take after receiving the MIB report?

• A. Send a notice to the MIB that the applicant was declined
• B. Request additional medical examinations
• C. Offer a higher premium rate
• D. Decline the application based on undisclosed information

Answer: (A)

Upon receiving the Medical Information Bureau (MIB) report, an insurer would not take the action of sending a notice to the MIB that the applicant was declined. The MIB serves as a resource for insurance companies to share information about policyholders and applicants to mitigate the risk of insurance fraud and to better assess the risk associated with applicants. If an application is declined, insurers typically do not report this decision to the MIB. Instead, MIB reports focus primarily on medical conditions, history, and other risk-related information rather than the outcome of individual applications. Thus, the action of notifying MIB of a decline would not be a procedural step that the insurer would follow. The other options involve actions that are standard practices in underwriting and risk assessment processes. These actions include requesting further medical exams if there are additional concerns based on the MIB report, adjusting premiums to reflect higher risks, or even declining an application if undisclosed medical information presents a significant risk that cannot be underwritten favorably.

Upon receiving the Medical Information Bureau (MIB) report, an insurer would not take the action of sending a notice to the MIB that the applicant was declined. The MIB serves as a resource for insurance companies to share information about policyholders and applicants to mitigate the risk of insurance fraud and to better assess the risk associated with applicants.

If an application is declined, insurers typically do not report this decision to the MIB. Instead, MIB reports focus primarily on medical conditions, history, and other risk-related information rather than the outcome of individual applications. Thus, the action of notifying MIB of a decline would not be a procedural step that the insurer would follow.

The other options involve actions that are standard practices in underwriting and risk assessment processes. These actions include requesting further medical exams if there are additional concerns based on the MIB report, adjusting premiums to reflect higher risks, or even declining an application if undisclosed medical information presents a significant risk that cannot be underwritten favorably.