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October 10, 2007 at 12:57 PM
Regulators in a Mid-Atlantic state are asking an insurer to change the way it markets health coverage and keep better track of complaints.
The Delaware Department of Insurance says it will be requiring MEGA Life and Health Insurance Company to pay $100,000 in fines in connection with allegations of concerns raised during an examination of MEGA activities that occurred from January 2002 to June 2004.
The exam was completed earlier this year, regulators say.
MEGA, North Richland Hills, Texas, a unit of HealthMarkets Inc., North Richland Hills, seems to have violated Delaware law by encouraging applicants who were eligible for small group policies to buy fully underwritten individual policies instead, Delaware department officials allege.
MEGA had few written procedures or management controls in place, and it could provide records for only 9 Delaware consumer complaints arising during the 2.5-year-old period examined, officials allege.
“This failure was due in part, to the company’s policy of discouraging consumers from submitting complaints in writing, coupled with its policy of only tracking and responding to written complaints,” officials allege.
