The Tennessee Department of Commerce and Insurance has imposed a $62,500 fine on the firm Zenefits for allowing unlicensed brokers to sell insurance in the state.
CEO David Sacks, who took the helm at Zenefits after reports of compliance failures in mulitple states, called the minor settlement a "milestone", suggesting it was the best possible outcome.
"As you know, we brought our licensing into compliance shortly after I became CEO in February and self-reported the issue to all the state departments of insurance on March 1," he wrote. "However, the question of the company's historical violations still needed to be resolved with regulators."
Because Zenefits self-reported the unlicensed activity and is now focused on "righting the ship", as TDCI Commissioner Julie Mix McPeak put it, the regulatory agency will not bar the company from doing business in the state.
Specifically, McPeak noted that Zenefits, which provides human resources tools, now mandates that all insurance brokers complete 52 hours of continuing education courses from the National Association of Health Underwriters (NAHU), including 12 hours of ethics training.
Additionally, 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 company also created the position of chief compliance officer and put together a compliance team.