Updated with Zenefits comment at end.
Officials at the California Department of Insurance say they are investigating Zenefits to see whether the company is complying with California laws and regulations.
The department opened the Zenefits investigation last year, officials said in a news release.
Dave Jones, the California insurance commissioner, said he has asked the department's enforcement branch to "deploy additional investigative resources to the Zenefits investigation."
Zenefits, a human resources and benefits automation company, announced earlier this week that David Sacks, a former PayPal executive, had taken over from Parker Conrad, a company co-founder, as chief executive officer
Many news organizations quoted from an internal email, said to be written by Sacks, in which Sacks allegedly told employees, "The fact is that many of our internal processes, controls, and actions around compliance have been inadequate, and some decisions have just been plain wrong."
The department cannot release information about its Zenefits investigation findings and conclusions until the investigation is completed, officials said.
In a statement about the investigation, Jones said new technologies and new business models can bring value and convenience to California consumers.
"But businesses deploying new technologies and new business models must comply with California's strong consumer protection laws, including the laws and regulations governing the licensing and training of insurance agents and brokers, which are designed to make sure that only individuals and firms with the expertise and integrity to transact insurance are allowed to do so," Jones said in the statement.
Kenneth Baer, a Zenefits representative, said the company told the department about the matter that led to the investigation.
"We are communicating and cooperating fully with regulators with regards to this issue that we discovered and self-reported to them," Baer said in a statement.
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Allison Bell
Allison Bell, a senior reporter at ThinkAdvisor and BenefitsPRO, previously was an associate editor at National Underwriter Life & Health. She has a bachelor's degree in economics from Washington University in St. Louis and a master's degree in journalism from the Medill School of Journalism at Northwestern University. She can be reached through X at @Think_Allison.
