While as Californians we value innovation, we also insist that new businesses, including high tech start-ups, follow our consumer protection rules.

Yesterday I announced a record $7 Million penalty imposed on Zenefits, an online insurance broker.

Zenefits’ former leadership created an “anything goes” culture at the internet start-up, resulting in numerous violations of licensing requirements designed to protect consumers.

New online businesses can bring additional convenience and lower costs for consumers. However, consumers are put at risk when start-ups violate important consumer protection laws. And existing businesses who are following the laws are put at a competitive disadvantage.

Zenefits cooperated fully with our investigation and agreed to the record penalty. The old leadership of the company, including the former CEO, has been replaced. New controls have been established to make sure Zenefits complies with our consumer protection laws. And we will be monitoring them closely as they move forward.

Enforcing our consumer protection laws remains my highest priority. No one is above the law. Even high-flying internet start ups.

Thank you again for the privilege of serving you as your Insurance Commissioner.

Sincerely,

DAVE JONES
Insurance Commissioner