Zenefits will pay $3.7 million settlement over licensing issues
Zenefits, the troubled purveyor of an online human resources platform for insurance, has agreed to pay nearly $3.7 million to settle charges brought by California state regulators.
The 4-year-old Silicon Valley-based company was dinged for allegedly allowing unlicensed employees to handle insurance transactions and for circumventing insurance agent education requirements, the California Insurance Department announced.
Zenefits, launched in 2012, has been under both regulatory and media scrutiny that led to the February resig- nation of Parker Conrad, the company’s co-founder and CEO. Serial tech entrepreneur David Sachs, former chief operating officer of PayPal and co-founder of Yammer, took the helm.
The agreement stipulated a $3 million penalty for the licensing violations and a $4 million penalty for “subverting the pre-licensing education and study-hour requirements for agent and broker licensing,” according to the agency statement. Another $160,000 was paid to the state to cover its costs for investigation and examination. However, because Zenefits self-reported and had taken remedial actions, including retraining its licensed personnel, the state agreed to cut its monetary penalties in half, suspending the other half, which could be reinstated, if it fails an agreed-upon compliance review in 2018.