The Technological Shift In Life Insurance Underwriting

When I started working in the life insurance industry twenty-five some odd years ago the technological revolution that started in the late 90’s and took off like a rocket at the turn of the century hadn’t yet started. Email existed and some of the employees at life insurance companies had email accounts…but most didn’t. The internet existed and some of the life insurance companies had websites…but most didn’t. Google didn’t exist, Amazon didn’t exist, and Facebook and Twitter didn’t exist. And we still worked in an environment where we faxed paper applications to home offices and medical records were paper and not in an electronic format.

Slowly the technology that we all now take for granted took over the world, including the life insurance world. Insurance companies and advisors slowly started using and relying on email. Insurance companies slowly started to design websites that provide advisors and customers essential tools and information about their products and services. Over the past two decades, we’ve evolved from a time when every document required an original signature…to a time when drop-tickets are submitted, voice-signatures are received, and e-signatures are accepted at delivery.

But the technological leap that’s occurred over the last twenty years hasn’t just impacted the processing of applications. That was the first step and, in my opinion, the least important step. It was the way many carriers navigated a very steep learning curve that made them comfortable enough to start using the technology that existed (and has yet to exist) to reduce underwriting times and the need and cost of certain underwriting requirements. This new technology is being used to allow insurance companies to waive certain requirements, which makes your job easier and makes applying for life insurance less painful to your clients.

As technology and public records become more ubiquitous throughout society, industries from banks to online book sellers, and from supermarkets to life insurance companies, are using these new tools to cut costs and make better and faster decisions. This brings us to two of the oldest resources that insurance companies have used to help them obtain accurate and complete information on their proposed insureds…the MIB and MVR.

The Medical Information Bureau–MIB
The MIB has been used for years by life, health, disability, long term care and critical illness insurance companies and it’s the tool that seems to be one of the most misunderstood by advisors. MIB is an entity that collects and stores medical information that its member insurance companies collect during the underwriting process. If the proposed insured then applies with another member insurance company in the future, the prior medical information is shared with this new company.

The first common misconception that many advisors have about MIB is what information is reported to it. The information that’s reported to MIB isn’t specific information like actual lab results or test results…it’s relatively vague and in code form only. For example, a code that’s reported to MIB might indicate something like “Abnormal Blood Glucose Result” or “Elevated Blood Pressure” but wouldn’t give any more specific information than this. It’s the requesting company’s job to then investigate this information by either re-questioning the proposed insured or by reaching out directly to the insurance company that reported the code to MIB.

Another common misunderstanding many advisors have about MIB is that MIB indicates what action the reporting company took regarding the information that’s been reported. In fact, MIB doesn’t indicate if the reporting company offered a rated policy, declined to offer at all, or took no adverse action based on the information that was posted.

And lastly, MIB does not collect information from medical records or directly from doctors outside of the reporting done by insurance companies. If an individual has never applied for insurance in the past, then they will not have an MIB record.

The Motor Vehicle Report
The MVR report has also been used for decades and is simply a report of traffic violations along with dates of each violation and dates of conviction or acquittal. Note that MVRs can sometimes be confusing given the fact that they come directly from state agencies that may or may not have the most up-to-date technology. Therefore if an insurance company makes an adverse action based on an MVR report, we always suggest that you verify with the proposed insured the dates of every violation noted in the decision.

The MIB and MVR have been used for decades and their efficacy and impact on underwriting is tried and true. The tools that I’ll now review are relatively new and many are unknown to many advisors. Knowing how these tools work and what information they provide about your clients will help you communicate better with your clients and potentially save a case.

Clinical Laboratory Database
This is a relatively new tool that allows insurance companies to pull blood and urine test results that were run by a proposed insured’s personal physician. This gives the underwriter great insight into many facets of the proposed insured’s health history such as possible chronic conditions like diabetes, hyperlipidemia, or chronic kidney disease. It also gives the underwriter an idea of how often the proposed insured gets medical care, and how in-depth and extensive their medical care has been. Many doctors also run different types of tests than those run on the insurance exam. Tests like CBCs, thyroid panels, and other specialized tests that aren’t done by the insurance companies. These results can give underwriters even greater insight into the proposed insured’s health history.

Prescription Database
Another tool that’s very similar to the Clinical Laboratory Database Search is the Prescription Database Search. This is a database that pulls prescription information from thousands of pharmacies across the country. This report gives the underwriter the names of medications prescribed to the proposed insured, the initial date those medications were prescribed, the date the prescription was last filled, how many times the prescription has been filled, and the physician who prescribed each medication.

This report in conjunction with the Clinical Laboratory Database Search can again give underwriters an amazing ability to put a picture together of an insured’s health history and hopefully negate the need to obtain medical records. For example, if an individual’s Clinical Laboratory Database Search shows that they have a history of elevated blood glucose, and the Prescription Database Search shows that Metformin was prescribed two years ago and has been filled regularly since then with normal blood glucose levels on the Clinical Laboratory Database Search since then, the underwriter can many times determine the rating for this proposed insured’s diabetes without obtaining medical records.

Claims Data
Claims data is one of the newer tools that underwriters can use to determine a client’s medical history prior to ordering medical records, therefore allowing them to potentially waive the medical records entirely. Every time a patient sees their doctor, a billing code, sometimes called an “ICD-10 Code” or a “Healthcare Common Procedure Code,” is noted in the medical records. These codes allow the medical provider to bill the patient’s health insurance company. Life insurance companies now have access to these billing codes and can therefore get a relatively clear picture of the insured’s medical history without obtaining their medical records. One of the primary drawbacks to this new tool however is that the underwriter doesn’t get a clear picture of the attending physician’s plan of care or a clear picture of the patient’s compliance with that plan of care which can sometimes be just as important as the actual diagnosis.

Electronic Medical Records
This is probably the newest tool that insurance companies are using in an effort to shorten underwriting times. The use of EMRs really started out of necessity when the COVID pandemic hit in early 2020. As we all know, obtaining medical records is usually the single largest delay in the underwriting process. It can sometimes take several months to receive medical records and COVID made this even worse. In some instances, the pandemic made it impossible to obtain a client’s medical records and electronic medical records became a potential solution to this problem. Note that the technology is still being perfected, but it allows copies of a patient’s records to be pulled from a healthcare facility’s computer system without waiting for a human being to process the request.

One drawback, however, that has limited the use of this new technology is that not all healthcare facilities have the technology on their end to support it. The second issue is that electronic medical records don’t normally include everything that’s included in a patient’s actual medical chart. There’s also a widespread misunderstanding by advisors that electronic medical records are the same as what a patient can obtain from their online patient portal, but this usually isn’t the case. We usually receive much more information from electronic medical records than what’s in the online patient portal that is accessible by the patient themselves.

Big data is already helping to expedite underwriting and allow insurance companies to require fewer medical requirements. And as the insurance companies gain more experience over the next several years using this data, they’ll come to depend more on it and less on invasive and time-consuming activities like exams and obtaining traditional medical records.

One drawback to advisors however is the lack of clarity about where specific information is coming from that’s being used in an underwriting decision, and how to correct erroneous information or appeal a decision based on this information. This is where your brokerage general agent comes in. They can help decipher the data that’s been collected, help your client obtain a copy of these reports, and then determine a plan of action to overcome any roadblocks that might be causing problems. For better or for worse, big data is here to stay. And the better we understand it, the more we can leverage that knowledge to get our clients the best underwriting offers possible.

Greg Horak is a case underwriter for LifePro Financial Services, Inc. He has been the medical underwriter at LifePro since 1998 and has been in the financial services industry since 1996.

Horak participates in underwriting symposiums and seminars multiple times each year and was an inaugural graduate of the SwissRe A.D.A.M. Program. He has helped hundreds of advisors across the country place millions of dollars in life target premium and hundreds of millions in death benefit.

Horak can be reached by telephone at 888-543-3776 ext. 3266. Email: