Illinois Insurance Department Settles with Human Resources Startup, Zenefits

Illinois has become the 17th state to reach a settlement with a California-based human resources software startup for alleged insurance code violations.

Illinois Department of Insurance investigators found the startup Zenefits violated state law by allowing unlicensed employees to sell insurance to Illinois-based businesses. The department announced the settlement on Feb. 1.

The company has agreed to pay a civil forfeiture of up to $560,000. Of that amount, $100,000 will be suspended pending the successful completion of a probation period.

Zenefits has replaced its top management and has instituted new controls and procedures to ensure that its employees are properly trained and licensed. The Illinois Department of Insurance will continue to monitor the company’s practices to ensure compliance with Illinois law.