Zenefits Settles With Tennessee In First Of Multiple Investigations Into Its Practices
Officials in several states are looking into the San Francisco-based company after it failed to get the necessary licenses for its sales staff to broker health insurance benefits.
Zenefits Fined $62,500 By Tennessee Regulators In First Settlement On Licensing
Software startup Zenefits must pay the state of Tennessee $62,500 for violating insurance requirements, state officials said on Monday, marking the first settlement with regulators as the scandal-hit company seeks to redeem itself after revelations it had flouted the law. "Under the company's past leadership, compliance with insurance laws and regulations was almost an afterthought," Julie Mix McPeak, commissioner of the Tennessee Department of Commerce and Insurance, said in a statement. "Under the old Zenefits model, they were not complying with state laws. Fortunately, new company leadership has demonstrated a dedication to righting the ship." (Somerville, 7/25)
The Wall Street Journal:
Zenefits Settles With Tennessee Regulator Over Sales Practices
Zenefits faces several continuing investigations from other states, including Washington, California and Massachusetts, after the company failed to get the necessary licenses for its sales staff to broker health-insurance benefits, the primary way the startup makes money. Zenefits reported its licensing issues to all 50 states earlier this year and said it has stopped the unlicensed practices. The company won’t be restricted from doing business in Tennessee, said Zenefits’s chief executive, David Sacks, in an email to employees that was released by the company. (Winkler, 7/25)