Zenefits has implemented a new system of checks and balances to ensure compliance with broker licensing issues, the HR tech company announced Friday.
The “sophisticated new controls,” launched inside the company’s CRM Salesforce.com, will “ensure that every one of our sales representatives is licensed to sell insurance in the state where that current or prospective client resides,” the company said in a blog post announcing the new controls.
“As we’ve acknowledged, Zenefits has had issues with licensing compliance in the past,” the blog says.
The company has been under investigation by the California Department of Insurance since last year, the state agency disclosed last week. California Insurance Commissioner Dave Jones said he had directed the agency to use additional resources to investigate whether Zenefits had complied with regulations that require the licensing and training of insurance agents and brokers.
"We believe that this sophisticated new technology provides some of the best-in-class controls in the industry and, as of today, corrects the company's broker licensing issues,” Kenneth Baer, a Zenefits spokesperson, says about the new system controls.
"As we’ve acknowledged, Zenefits has had issues with licensing compliance in the past."
According to the company here’s how the technology works:
- Before any potential customer can be assigned to a sales rep, the system checks to make sure that the sales rep is licensed in that customer’s state. If that is not the case, the system will produce an error message and prevent the assignment from taking place.
- Every sales rep must enter all of their licensing information into the system. They must also upload a PDF of their license certificate.
- Zenefits’ compliance team then checks the sales rep’s license information against the Department of Insurance (DOI) website for that state. The compliance team member verifies that the employee is appropriately listed on the DOI website.
- The compliance team member then takes a screenshot of the employee listing from the DOI website and uploads it into Salesforce.com.
- Only when both pieces of information have been entered into the system — the sales rep’s certificate and the compliance team’s verification — will the sales rep be approved by the system to conduct sales conversations in that state.
The new system of checks and balances applies to both existing and future sales opportunities, the company says, and includes sales people, as well as benefit advisers.
The company says it will conduct regular reviews of the technology to ensure that it is working as expected.
