Business

License ‘scheme’ gets insurance company a $25,000 fine from Idaho regulators

The Idaho Department of Insurance has fined Zenefits FTW Insurance Services $25,000 for knowingly letting employees sell insurance in Idaho without proper licensing.

The state’s insurance regulator issued the administrative penalty Oct. 25 for what it called a “licensing scheme.”

“Zenefits has been unlawfully doing business in Idaho, and a number of other states and has been fined thousands of dollars by several states,” said Dean Cameron, the director of the Idaho Department of Insurance, in a news release.

Zenefits has been licensed in Idaho since 2014.

After states opened investigations, Zenefits did an internal audit that “revealed systemic flaws in Zenefits oversight and licensing procedures,” the release said. “The report discovered that employees were conducting the business of insurance without licenses and that some licensees had access to a technology tool that would misrepresent the hours studied for licensing exams.”

The department learned of those findings in March, the news release said.

The company has since replaced its top leadership, hired a chief compliance officer and created a compliance team, the department said.

Zenefits now requires all employees who sell, solicit or negotiate insurance to be licensed. It has put in place “new administrative and technical licensing controls” and hired a national accounting firm to test the new controls and report those results to the department, the news release said.

The tool that allowed people to fake studying time is no longer available, and agents must do 52 hours of continuing education courses, including ethics, it said.

Audrey Dutton: 208-377-6448, @IDS_Audrey

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