Podcast Center
Video Center
Webcasts
Resource Center
Events
December 16, 2015 at 09:00 PM
Having unlicensed employees selling insurance policies is obviously a big no-no and a major ethical faux-pas, but apparently it happened recently at a prominent Silicon Valley startup.
San Francisco-based Zenefits, one of the fastest-growing software as a service (SaaS) companies in history, offers cloud-based software to companies to manage their human resources, with a particular focus on helping them with health insurance coverage.
But according to a BuzzFeed News investigation, some of the Zenefits employees helping businesses secure health insurance coverage may have been doing so without the proper licensure – and with the knowledge of management.
The BuzzFeed News report found Zenefits “allowed numerous salespeople to act as insurance brokers in at least seven states without licenses to do so, according to internal emails and records, as well as interviews with eight former employees with direct knowledge of the matter.”
The report went on to say it has found evidence of unlicensed sale of insurance by Zenefits employees dating as far back as summer 2014 and continuing through summer 2015.
At least one regulator, the insurance commissioner in Washington state, is currently examining whether Zenefits operated there without licenses, according to a spokesperson for the agency, Stephanie Marquis. The Washington inquiry began in early 2015 and has not yet been resolved, she said. Under Washington law, anyone who knowingly sells, solicits, or negotiates insurance without the proper state license is guilty of a Class B felony, which can carry a prison sentence of up to 10 years, as well as a civil penalty of up to $25,000 for each violation.
The BuzzFeed News report goes on to say Zenefits sales reps were told that they needed licenses to do their job, but managers in many cases showed a “blasé” attitude toward the requirement, pushing the unlicensed reps to meet sales quotas.
In response, Zenefits issued a statement on Nov. 24, 2015, saying that it is, and always has been, Zenefits’ policy that every individual who sells insurance at Zenefits, as well as the company itself, must be licensed to sell insurance.
