According to the Federal Bureau of Investigations (FBI), the total cost of insurance fraud (non-health insurance) is estimated to be more than $40 billion per year. Uncovering the signs of potential fraud as early as possible is critical to managing this risk and protecting your bottom line.
Leveraging MIB Checking Service℠ data during the underwriting process continues to be one of the best ways to detect potential misrepresentations or omissions on submitted applications. The ability to gain awareness after a case is placed, while still contestable, allows yet another opportunity to mitigate fraud – whether for an in force policy or for an early duration claim.
Missed Opportunity
A review of our data suggests MIB members are discovering significant impairments on their applicants after underwriting has been completed. To validate this, we leveraged the MIB Follow Up Service (Plan-F) to track and review ongoing application activity for a sample of life insurance cases associated with large MIB member companies. The findings were substantial; we found considerable evidence of undisclosed conditions with underwriting significance.
Armed with the information provided by the MIB Plan-F Service, the carriers who underwrote these cases would be able to conduct further investigation, avoiding adverse risk.
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MIB Follow-Up Service℠ (Plan-F)
The MIB Follow-Up Service (Plan-F) is a unique industry tool that enables our members to uncover misrepresentations or omitted application information during the contestable period. This ‘second look’ opportunity is an important source of post-underwriting evidence and has proven to be a critical fraud detection solution with today’s expanding workflow and distribution options.
Through an automated reporting process, Plan-F alerts carriers to any new applicant information submitted by another member for two years following the original inquiry to the MIB Checking Service. This allows a member to review a policy for significant misrepresentation in advance of a claim being submitted.
