The Canadian Life Insurance Medical Officers’ Association (CLIMOA) is the representative body of the Medical Officers who work in Insurance Medicine in Canada. Our membership consists mainly of physicians, but also other professionals involved in underwriting, claims evaluation, product development for the Insurance Industry in Canada. The represented medical specialties are across the board, but most physicians come from the specialties of Internal Medicine and Family Medicine. Physicians who work in this industry all have at least 5 years of clinical medical experience and most maintain some form of clinical work despite their responsibility as Medical Directors to Insurance Companies.
- What is Insurance Medicine?
- What is the history of Insurance Medicine?
- What is the history of CLIMOA?
- What services does CLIMOA offer?
- Where does CLIMOA obtain funding from?
- How can I train in Insurance Medicine?
- Who can I contact to learn more about this industry/discipline?
1. What is Insurance Medicine?
The financial wealth of a community is a significant determinant of the medical health of that community. In times of crises, people require financial support and the insurance industry is a pillar to lean on during those times – knowing that their finances will endure even if their health does not. The job of the Medical Director in the Insurance Industry is to facilitate that security by accurately assessing the client’s medical status in order to fairly underwrite insurance policies and assess insurance claims. This involves obtaining the necessary information from the client’s medical community. The Medical Director has a responsibility to the insurance industry to ensure that the practice is sustainable (i.e. adhere to the actuarial calculations of risk), but also to communicate with the medical community in order to facilitate back and forth communication and foster understanding both ways. The Medical Director is involved in the decision making process of all types of policies involving medical information – life insurance, critical illness insurance, disability insurance, long term care insurance, health and travel insurance. Depending on the type of policy the client applies for, the assessment would differ – for example, requiring assessment of mortality risk for lifeinsurance policies, morbidity risk for disability policies and risk of specific diagnoses as per the critical illness policies. Depending on the company, Medical Directors are involved in the final decision in 5-30% of insurance applications.
Underwriting is evidence based. The determination of mortality risk is a statistical method derived from available clinical trials in Evidence Based Medicine and compared to the published
country-specific standard mortality rates of a population of the same age and gender.
Physicians may also be involved in policy design and medical wording of documents and help with updating the underwriting manuals. They may also be required to help with definitions of
specific diseases and asked to interpret special investigations such as ECGs. They may be asked to relate disability to a specific occupational profile. Physicians working for a specific insurance company are usually involved in the training of medical underwriters and claims assessors too. Many physicians working in the Insurance Industry, present at industry conferences. At these conferences colleagues share the knowledge of new developments in clinical medicine that are relevant to the Insurance Industry and discuss the complex medical conditions that are important to Insurance Industry professionals. The environment that the medical Director functions within is truly multi-disciplinary in that they closely work with underwriters, claims assessors, actuaries, lawyers, as well as business professionals and other medical professionals.
2. What is the History of Insurance Medicine ?
“…by uniting with others, so that each man may subject himself to a small deprivation, in order that no man may be subjected to a great loss.”
Select Committee of House of Commons, UK, 1825 The concept of “insurance” is evident as early as 4000BC in the civilization in Babylon and was later also practiced by Hindus in 600BC and in Greece around 400BC. It existed as “bottomry” contracts where lenders would provide funds for repair of a trading ship in exchange for interest on the loan when the cargo was delivered, and the loan repaid. If the vessel did not complete the voyage, then the lender would lose the money. Thus, the interest charged on loans covered the risk of loss. During the 17 th century Edward Lloyd’s coffee house on Tower Street in London was frequented by both merchants and investors. This resulted in contractual agreements where an investor would agree that in exchange for a premium, they would pay the assured a sum of money if their cargo was lost at sea. If the loss did not occur, the investor would retain the premium.
These contracts were usually shared by several investors who would write their names and their percentage share under the wording of the contract – hence the term “underwriter” originated. This was the unintended beginnings of Lloyd’s of London – the renowned British Insurance Market of today. The first life insurance policy was sold in 1583. It was modelled on the existing marine policies at the time. The industry as we know it did not start until the end of the 17 th century. Early life insurance policies failed because of significant abuse, fraud and lack of medical selection. Some policies were even sold without the knowledge of the person ensured, resulting in a type of gambling scheme. In 1725 London Assurance attempted to make the industry more viable by interviewing the individual and asking for proof of identity. The person was asked if he/she had survived smallpox.
Mortality tables were first conceived by a London draper’s son, John Graunt, in 1662 and was derived from the London Times’ records of burials and christenings. The first scientist to create
mortality tables was Edmund Halley (of Halley’s comet fame) in 1693. He used the data compiled by the local pastor in the city of Breslau, then a part of Austria. The Life Insurance
Industry was slow to develop. James Dodson (1756) proved that selling life insurance for a period longer than 12 months was viable by graduating premiums. Dodson may be seen as the
person who paved the way for modern actuarial science. The British Parliament enacted the Life Insurance Act in 1774 and thereby put an end to speculation on lives. Benjamin Franklin created the first insurance company in the United States in 1752. It was called Philadelphia Contributionship and was mainly intended to insure homes against the risk of fire. The first Life Insurance Company was the Presbyterian Ministers’ Fund. Created in 1759 it was meant to support the widows and orphans of deceased ministers. The practice of medical examination started in 1809 in Pennsylvania and in 1823 the Massachusetts Hospital Life Insurance Company introduced a rate book. Early life insurance policies placed restrictions on who could be named as beneficiaries (not women) and restricted the lifestyle of those who had bought the policies by doing checks on their health and character and limiting where they could travel to. At first, insurance policies were limited to the wealthy, but in 1840 the concept of Mutual Insurance increased the base to whom insurance policies could be sold and thereby significantly increased the number of policies sold. The first company to sell life insurance in Canada was Canada Life Insurance Company in 1847 and several more followed after 1880.
In 1848 the Institute of Actuaries laid down standards for the industry in Great Britain and was followed by the Actuarial Society of America in 1889. The first meeting of physicians involved in the practice of insurance was in 1889 – ALIMDA (Association of Life Insurance Medical Directors of America, now called AAIM – American Academy of Insurance Medicine) and was held in the USA. The first international meeting was held in Brussels and was the start of ICLAM.
In 1897 insurance policies started to consider a client’s build and in 1925 blood pressure was added as a parameter of insurance risk. Life insurance has made valuable contributions to medical science over time – the value of urine analysis, how build and blood pressure factor into mortality risk as well as the development of the aneroid sphygmomanometer by Dr O.H. Rogers (Medical director of New York Life Insurance Company) in the early 1900s. Substandard risk clients have been insured since 1920 and since then the insurance industry has kept up with medical research and actuarial evidence to evaluate risk in terms of mortality and morbidity. The Insurance Industry has shown a steady growth of 8.4% annually since 1910 and is now responsible for a large proportion of the capital provided to fund the world’s largest economies in addition to significantly benefitting the standard of living in developed countries world-wide.
3. What is the history of CLIMOA?
CLIMOA was first conceived in 1947 but only named 2 years later. The first meeting had 20 members and was held in Kitchener, Ontario. The first president of CLIMOA was Dr. Samuel Straight. At the time he was the Chief Medical Director of Canada Life Insurance Company and the President of ALIMDA (that would later be renamed as AAIM). It was decided early on that the meeting would be held during “blossom time”. The initial objective of the meeting was to create an Impairment Manual. The first meeting procedure to be publicized was in 1956 and by 1957 the association had 71 members. The initial Constitution was approved in 1960.
Through the years CLIMOA has been involved in many challenges that the insurance industry has been faced with. In 1959 the challenge was to create an insurance questionnaire that would satisfy both the insurance industry and the medical profession. Privacy of personal information became an issue around 1979 and CLIMOA had to defend the right to risk classification. Still today, with the development of new genetic assays, the insurance industry aims to balance the needs of the industry with the rights of the private individual.
4. What services does CLIMOA offer?
CLIMOA hosts the annual conference of Insurance Medicine in Canada. This is an opportunity for those involved in medical underwriting and claims to connect, exchange ideas, update their knowledge of the latest advances in Medicine and trends in the industry. Newcomers have the opportunity to learn about the set ethical standards, and changes in the regulatory environment is discussed among members. CLIMOA also serves as a resource for those in the industry to connect, share available job postings as well as other educational opportunities.
5. How is CLIMOA funded?
CLIMOA is a not for profit organization and is mainly funded by annual membership contributions and annual conference fees, as well as the support that is graciously provided by insurance companies every year.
6. How can I obtain training in Insurance Medicine?
Most of the education in Insurance Medicine happens on the job – from colleagues and actuaries and those already working in Underwriting and Claims at the individual companies.
The learning curve is rather steep and long. It takes many years to be confident of the decisions made in insurance cases and the industry is ever-changing. As previously stated, physicians are expected to have at least 5 years of clinical experience in order to ensure a solid clinical background. The annual conferences hosted by CLIMOA and the American counterpart
organization, AAIM, are valuable resources for education. ICLAM, the international organization hosts a conference every third year.
The University of Montreal offers a web-based course for Insurance Medical Officers and the American Board of Insurance Medicine offers board certification in Insurance Medicine in
affiliation with AAIM.
7. Who can I contact to learn more about Insurance Medicine?
The executive of CLIMOA, including the current and past presidents, may be contacted via the contact information on this website to answer any further questions.
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