What is the primary purpose of the MIB?

The primary purpose of the MIB, or Medical Information Bureau, is to share medical data among member companies, which enables insurers to maintain a consistent and accurate assessment of the risk associated with applicants. The MIB acts as a database that gathers information about an individual's health history, which insurers can access to make informed underwriting decisions. This is crucial because it helps companies reduce the chances of fraud and minimizes the potential for adverse selection, where individuals with higher risks seek insurance coverage disproportionately.

While sharing medical data is a central purpose, it also contributes to a broader goal of promoting a more equitable approach in underwriting practices across the insurance industry. This cooperative sharing ensures that insurers have access to necessary health information while also safeguarding the privacy of applicants to some extent, as they must adhere to strict regulations regarding data use.

Other options point to various functions that the MIB does not primarily fulfill. For instance, providing legal advice is not part of MIB’s role, nor is it designed exclusively for assisting in underwriting life insurance; its database covers multiple types of insurance. Although fairness in premium pricing is an important aspect of insurance, it is more a result of the practices stemming from data sharing rather than a direct purpose of the MIB itself.