Part 3 - Agent's Report
Agent's Report***
MR. WATSON: Part 3 is the agent's report .
MR. WATSON: "In this important section, the agent provides first-hand knowledge about the applicant's financial condition and character."
MR. WATSON: What if I see him with a cigarette hanging out of his mouth, and he says "I don't smoke"? On Part 1- General, when I ask if he smokes, and he says "no," what do I put down? I put his answer down, even though I know it to be a lie, but on the agent's report, you better put that you saw him smoking, cover your rear-end. Why? You are an agent of the company. What you see, the company sees. That was the principals of agency law we talked about in a previous chapter.
MR. WATSON: Sometimes there will be an exam, but not always. Everybody clear on that?
STUDENT: Um-hmm.
MR. WATSON: Part 3 is the agent's report. In this important section, the agent will provide first-hand knowledge about
- the applicant's financial condition, and
- character.
We also find out about character in the inspection report, which we’ll be talking about soon.
Medical Information Bureau ***
- Nonprofit
- Established by hundreds of insurance companies
- Keeps premiums down
- Prevents misrepresentation and fraud
- MIB never has any contact with doctors
- Information is for insurance companies only, for underwriting and claims
MR. WATSON: Guys, let's talk about something called the Medical Information Bureau, M.I.B. What's that stand for?
STUDENT: Men in black.
MR. WATSON: It stands for the Medical Information Bureau. It is a non-profit organization whose purpose is to keep premiums down through the prevention of misrepresentation and fraud. It was started by over 700 member insurance companies a long time ago to serve as a reliable source of medical information concerning applicants and to help disclose cases where the applicant either forgets or conceals pertinent underwriting information. Here's how it works.
MR. WATSON: If you apply for insurance through a member company, like Met Life, and they find out that a past problem existed or a current one exists, they are going to report that to the Medical Information Bureau in the form of a code number. Let's say ovarian cancer, 01234. I don't know what the number is, I am making it up. The insurance company reports that to the Medical Information Bureau, and Met Life denies you coverage. That information of denying you coverage does not go into the Medical Information Bureau, just the code number. So if you apply to another member company, like Prudential, they check the M.I.B. and up pops the code number for ovarian cancer. Prudential automatically checks with the MIB. Boom, just like your credit report. Here it comes, code number 01234.
MR. WATSON: People know that there is an incontestable period and if they get beyond that, the insurance company must pay. The MIB helps to protect the insurance company.
MR. WATSON: You have certain rights, just like with your credit report, to correct any errors. You have a right to know what's in there. But it's just the insurance company's way of trying to keep people from getting one over on them, preventing misrepresentation and fraud. Does that make sense?
STUDENTS: Yeah.
MR. WATSON: Where does the MIB get information from? Only Insurance applications. It gets it from insurance companies. The MIB does not get information from your doctors. The information is for member insurance companies only.
MR. WATSON: Its purpose is to keep insurance premiums down through the prevention of misrepresentation and fraud. Your rights:
- Applicants for life insurance must be notified in writing that the insurance company is going to make a brief report to the MIB on their health.
- Applicants must be advised that should they apply at another MIB company for coverage or if a claim is submitted to such a company, the MIB will supply the requested information to the company.
- Applicants must sign authorization forms.
- The MIB will arrange the disclosure of the information to the applicant's physician.
MR. WATSON: Sort of like a credit report. You have certain rights.