Former Zenefits CEO surrenders insurance license following department enforcement action
News: 2018 Press Release
SACRAMENTO, Calif. — Today, Insurance Commissioner Dave Jones announced the conclusion of an enforcement action against Parker Conrad for his alleged role in licensing compliance violations that occurred at Zenefits during his tenure as CEO. Following the filing of an Accusation, Conrad entered into a settlement with the department resulting in the surrender of his insurance license.
"As Zenefits' CEO, the buck stopped with Parker Conrad," said Commissioner Jones. "Unlicensed insurance transactions occurred under Conrad's management and employees were provided with a computer program that enabled them to skirt the pre-licensing education requirements. Conrad was ultimately responsible."
In late 2015, the department learned of alleged violations regarding the transaction of insurance by unlicensed Zenefits' employees as well as the creation of a software macro that enabled employees to circumvent the pre-licensing study requirements. Following an investigation, the department concluded an enforcement action against Zenefits in November 2016. Zenefits agreed to pay a fine of $7 million, with half of the fine suspended if Zenefits had no future insurance code violations. This is one of the largest fines imposed for licensing violations in the history of the department.
Conrad was a co-founder of Zenefits and acted as the company's CEO from its inception in 2012, until his resignation in February 2016. He also held a seat on the company's board of directors and had an ownership interest in the company during the time the alleged violations occurred.
In addition to surrendering his license, Conrad agreed to pay $66,000 in reimbursement costs to the department and to not transact insurance, either directly in his name or indirectly by managing or directing the transaction of insurance through any other licensee, without first applying for and obtaining an insurance license.
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Media Notes:
Led by Insurance Commissioner Ricardo Lara, the California Department of Insurance is the consumer protection agency for the nation's largest insurance marketplace and safeguards all of the state’s consumers by fairly regulating the insurance industry. Under the Commissioner’s direction, the Department uses its authority to protect Californians from insurance rates that are excessive, inadequate, or unfairly discriminatory, oversee insurer solvency to pay claims, set standards for agents and broker licensing, perform market conduct reviews of insurance companies, resolve consumer complaints, and investigate and prosecute insurance fraud. Consumers are urged to call 1-800-927-4357 with any questions or contact us at www.insurance.ca.gov via webform or online chat. Non-media inquiries should be directed to the Consumer Hotline at 800-927-4357. Teletypewriter (TTY), please dial 800-482-4833.
