December 2, 2016

Zenefits Implosion: Is your insurance agent or advisor properly licensed?

More bad news for the once high-flying human resource services provider Zenefits.

Zenefits has been fined by State Insurance Departments for allowing unlicensed individuals to sell insurance.  The California Department of Insurance recently fined Zenefits an eye-popping $7 million for this illegal act, the Washington Department of Insurance fined the company $100,000.

Also, the Washington Department of Insurance has ordered Zenefits to cease giving its employee benefits software, valued at an annual cost of $29,100 to $45,000, free to clients.  Yep, free.  According to the Washington Department of Insurance, this sales practice violates Washington's law that prohibits giving excessive items or money to individuals or businesses as an inducement to make a sale.  These anti-inducement laws are typical, but vary from state to state as to each law's specific prohibitions.

When working with an insurance professional, always check to make sure the individual is properly licensed.  You can find this information online at your State Insurance Department's website, which typically lists each individual's licensing, any complaints, and also sometimes continuing education records.  The California Department of Insurance license lookup is here.

Insurance or Annuity Concerns?

Visit FoutsFinancialGroup.com for information about Mary's Consulting, Expert Witness, and Tax Services.

10 comments:

  1. I really never thought about checking up on my insurance agents.

    ReplyDelete
    Replies
    1. That is commonplace. I always recommend to clients that they check up on any professionals they receive services from (including but not limited to insurance agents, financial advisors, tax professionals including CPAs and enrolled agents, attorneys, physicians, engineers, building contractors, tree trimmers, and architects) to be certain the people are, in fact licensed. Also to check on any history of complaints against the individual/company.

      Delete
  2. Any criminal action against Zenfits?

    ReplyDelete
  3. With the investigations and fines, how is the company even operating anymore? I would run in a heartbeat.

    ReplyDelete
    Replies
    1. I agree. I know I would not consider using their human resources services if I were looking for such services.

      Delete
  4. Read in the newspaper the Zenefits CEO resigned.

    ReplyDelete
    Replies
    1. I read that also, article said he might join Trump's transition team. Not sure the exact tenure as CEO, but I recall reading somewhere it was a short 6 months.

      Delete
  5. This inducement law, why is it wrong to give something away for free? Aren't people and businesses always looking for a deal?

    ReplyDelete
  6. Your method of describing all in this post is in fact fastidious, every one can effortlessly know it, Thanks a lot.

    ReplyDelete

Thanks for sharing your comments! Comments are moderated before posting to weed out spam.