Zenefits Slammed With $7M Fine From California Insurance Regulator
California regulators called it "one of the largest penalties for licensing violations ever assessed in the department's history."
The Wall Street Journal:
Zenefits Hit With $7 Million Fine By California Insurance Regulator
The settlement is the largest thus far for Zenefits, which has faced investigations from multiple states for improper sales practices by some of its staff. The San Francisco company has already settled investigations with other states, including Tennessee, Arizona and Minnesota, paying much smaller fines in the tens of thousands of dollars. (Winkler, 11/28)
Reuters:
Zenefits Hit With $7 Million Fine By California Insurance Regulator
Software company Zenefits has been fined $7 million by California's insurance regulator, marking the biggest penalty yet for the startup that has faced multiple investigations for flouting insurance laws. California Insurance Commissioner Dave Jones said in a statement posted on the state insurance department's website that Zenefits was charged with allowing unlicensed employees to sell insurance and circumventing education requirements for insurance agents. (Somerville, 11/28)
Los Angeles Times:
Employee Benefits Start-Up Zenefits Is Fined $3.5 Million For Licensing Violations
"Zenefits is an example of an Internet-based start-up whose former leaders created a culture where important consumer protection laws were broken," Jones said in a statement, describing the tactics as a “bad" strategy that other start-ups should avoid (Dave, 11/28)
Bloomberg:
Zenefits Fined $7 Million By California Insurance Regulator
Zenefits has faced a spate of controversies in the last year after some employees used software to skirt training requirements and sold health insurance without the necessary licenses. The company has slashed head count and agreed to reduce its valuation to $2 billion in exchange for shareholders agreeing not to sue the company. Zenefits has raised more than $580 million from backers including Andreessen Horowitz, Fidelity Investments and TPG Capital. (Newcomer, 11/28)
San Francisco Business Times:
California Penalizes Zenefits $7 Million, Most Of Any State
“We are pleased to reach a settlement with the California Department of Insurance, which recognized our remediation efforts by suspending half the fine. We now have a clean bill of health from our lead regulator, as well as 16 other states,” a Zenefits spokesperson said. “New management has righted the ship at Zenefits.” (Siu, 11/28)