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.

Delaware may increase the fine to as much as $500,000 if MEGA does not comply with a list of recommended remedial actions, officials say.

MEGA has issued a statement saying that it cooperated fully with the Delaware market conduct examination and believes it will be able to avoid paying additional fines.

“The company has worked closely with the Delaware Department of Insurance, and we believe we have previously addressed and implemented corrections to many of the issues noted in the examination report,” the company says. “We will continue to work in cooperation with the Delaware department of Insurance on any additional issues that may arise.”

A private equity firm bought HealthMarkets in 2006, and, “in the 3 years since the time covered by this examination, the company has proactively implemented and continues to implement a wide range of changes and improvements designed to enhance customer service, customer education and agent training,” MEGA says in its statement.

“As a provider of health insurance to the residents of Delaware, we are committed to adhering to all regulatory guidelines and to providing quality, affordable health coverage to our customers,” the company says.