Consumer Rights Expanded under Reporting Rule Effective in October

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Starting October 2, American consumers denied health, life or disability insurance will have the right to know when confidential information about them was disclosed to insurers by the nation's largest insurance reporting agency, the Medical Information Bureau (MIB). Under an agreement with Federal Trade Commission staff that affects 99 percent of individual life insurance policies and 80 percent of all health and disability policies issued in the United States and Canada, members of MIB will comply with the Fair Credit Reporting Act requirement that an individual be informed when a consumer report played any part in an insurer's decision to deny coverage or to charge a higher rate. Insurance companies will be required to provide the name and address of the consumer reporting agency that provided the information (MIB) and consumers will be entitled to receive a free copy of their report to verify that all information is correct.

This new consumer right is the result of an MIB rule approved by the FTC staff and agreed to by the reporting agency, MIB, and its 750 insurance company members, in June. MIB collects information on consumers and furnishes it to MIB members for use in the insurance underwriting process. In addition to an individual's credit history, data collected and reported by MIB may include medical conditions, driving records, criminal activity, participation in hazardous sports and other data.

"This is an important, new option for consumers", said Jodie Bernstein, Director of the Consumer Protection Bureau at the Federal Trade Commission. "Consumers will now know if information provided in an MIB report has played a role in the denial or rating of insurance, and will be able to exercise the self-help remedies afforded by the Fair Credit Reporting Act."

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