Both life and health and property and liability insurers routinely disclose information about an applicant or insured to the agent, to the extent necessary to service the policy; to reinsurers (when a company underwriting a large policy wants to reduce its exposure to loss); to an insured's physician; to inspection bureaus to facilitate the preparation of an investigative report; and to other types of investigators asked to prepare such reports. Because insurance is often required to buy a house, operate a car, pursue a career, or conduct a business, they may also disclose information about an individual to loan institutions and employers.
Further, life and health insurers, as indicated in the preceding sections, also disclose information to the Medical Information Bureau or the Impairment Bureau, and may provide details to another member insurer when requested to do so. Property and liability insurers, for their part, routinely notify the loss indexes of certain claims, and, in some cases, may notify the Insurance Crime Prevention Institute (see below).
Some potential insureds are judged to be so likely to produce adverse claim experience that they cannot obtain insurance in the normal manner. The driver with a poor record poses two problems. The first is meeting his own acute need for financial protection and perhaps his ability to qualify legally as a registered vehicle owner. The second is protecting society from the harm which an unsafe driver is likely to inflict on others. State "assigned-risk" insurance plans were formed to provide coverage to a driver whom companies consider an unacceptable risk and thus can require information about him to be disclosed to the administrators of the plan as well as to the insurance company to which his application is assigned.
Both life and health and property and liability insurers may release information about individuals to State insurance department officials in response to inquiries or complaints, and in the course of periodic examinations of company underwriting practices and procedures by such officials. Independent auditors employed by an insurance company make similar checks for the same purpose. In addition, because insurance companies are repositories of detailed information about individuals, their records are often requested by Federal as well as State government agencies and law enforcement authorities.
Finally, to make it possible for residents and property owners in high risk locations to purchase insurance against losses due to crime, civil disorders, and floods, partnerships have been formed between insurers and government agencies which make it necessary for insurers to disclose information about individuals to the agencies participating in such programs.