Zenefits is hoping that a new comprehensive licensing controls application will help avoid future claims that the company has unlicensed brokers selling insurance.
In a nutshell, Zenefits built software controls into its sales system that automatically verify licensing status and block accounts from being assigned to a broker who does not hold a valid insurance license in the correct state. The app also helps manage license renewals and prevents brokers from transacting until their renewal is processed.
The San Francisco-based company says it has been using the system with success since January, but it's now making the application available for free to all insurance brokerage firms nationwide.
The application relies on a feed from the National Insurance Producer Registry (NIPR) Producer Database to maintain up-to-date licensing data. On the infrastructure side, Zenefits built the application on the Salesforce App Cloud.
"With more than 10,000 licenses, we process thousands of verifications every month," said Joshua Stein, chief compliance officer for Zenefits. "Automating the licensing controls has streamlined that to ensure greater accuracy and save a tremendous amount of time."
For Zenefits, the compliance effort is the latest move by CEO David Sacks to bolster the company's integrity following concerns over the legitimacy and licensing of some brokers. More specifically, some Zenefits brokers were alleged to have padded the hours they said they committed for pre-certification in the state of California.
A subsequent BuzzFeed report suggested that 83 percent of Zenefits' insurance deals in Washington state through August 2015 were brokered by employees without the required licenses.
Following the shady licensing accusations, Parker Conrad, Zenefits' founding CEO, was booted from the company, leading to the appointment of current CEO Sacks.