Two faces of nondisclosure: asking the right questions--and doing it well--can reduce the amount of nondisclosure in life and health insurance applications.

Does nondisclosure equal antiselection? Not always. This underwriter would broadly define antiselection as a state that exists when the proposed insured is aware of facts in his health habits (or lack thereof), medical history, avocations, and other scenarios that are intentionally not disclosed at the time of application.These facts are, by inference, material and would have led to adverse underwriting action if they had been revealed.

Hence, we often use the term nondisclosure as a synonym for antiselection.

Which would be fine if it were always true.

Unfortunately for those who bandy words about imprecisely, the fact is that while all antiselection involves nondisclosure, not all nondisclosure equates to antiselection.

Who cares? We do.

If every tobacco devotee would simply tell the truth, we would not need to spend money checking their urine, oral fluid and/or (rarely) blood for telltale evidence of their affliction with "smoker's amnesia."

But, they don't always tell, so we do screen.

The rising popularity of pharmaceutical database profiles is another example of how progressive insurers seek out antiselective nondisclosure--in this case, with regard to the use of prescription remedies.

Nearly all insurers ask about prescription use as an application question.While the predominant value of these database-generated profiles is not detection of antiselective intentions, they do alert insurers when unacknowledged medications associated with impairments conferring excess mortality and morbidity are being taken.

We have now confirmed that intentional nondisclosure of material facts is the same as antiselection.

What about nonintentional, or incidental, nondisclosure? Fact is, incidental nondisclosure is many, many times more prevalent in all domains of underwriting than its sinister counterpart.

How can this be? It is a function of the mechanisms that induce applicants not to disclose information deemed material to insurability.There are at least five such mechanisms occurring every day in conventional (hold that thought) underwriting:

* The question is inadequate--They asked about "liver, pancreas and gallbladder disorders" but I had sclerosing cholangitis, a bile duct condition.

* The question is not understood--95%-plus of insurance buyers do not speak even rudimentary medicalese.

* The question was not asked properly--This is prevalent among younger producers, property/casualty agents who don't sell much life or health coverage and individuals from other domains of finance who include insurance in their repertoire (sans any real training therein). One of my personal favorite blatantly improper variations on the theme of an application question is "You don't smoke, do you?" Inventive technique of encouraging nondisclosure, don't you think?

* The insured was given information by his physician which leads him to not answer properly. In a medical report on chronic lymphocytic leukemia, the physician author acknowledged that he did not tell patients in the early, symptom-free years of this fatal malignancy that they had "cancer." How could we expect this individual to answer a "cancer question" correctly (especially if the word "leukemia" was not included)?

* The question was not asked at all. Sadly, this does happen. Recently, when asked to opine on a challenged claim, one point of contention was that the agent, knowing the proposed insured's family well and thus being privy to the fact that the individual in question had been a "guest in a facility devoted to remedying intemperance" (or more candidly, dried out via inpatient alcohol rehab), opted to, shall we say, gloss over this aspect of the medical history.

You can't answer if you're not asked.

Another scenario that begs for inadvertent nondisclosure is when we ask "in the past five years, have you ...?"

What if the issue at hand occurred four and a half years ago? Memories dim with time."Did I see that doctor in 2000 or was it back in 1999?"

Is this really antiselection? I would think it depends on the individual circumstances.

What can we do about incidental/unintentional/ inadvertent nondisclosure? Do a better job of asking our questions.The operative definition of which is teleunderwriting, which just happens to be the proven antidote for most (but not all) occasions of incidental nondisclosure.

Hank George, a Best's Review columnist, is the principal in his own consulting and training firm, Hank George Inc. He may be reached at [e-mail].