STATEMENT BY ZENEFITS

24 November 2015

It is -- and has always been -- Zenefits’ policy that every individual who sells insurance at Zenefits, as well as the company itself, must be licensed to sell insurance. Zenefits has more than 280 active resident insurance licenses and more than 2500 active non-resident licenses, and these licensed brokers have sold thousands of insurance policies over the past two-and-a-half years. When we started Zenefits, we followed a practice common to many small independent brokerages of having each broker licensed in their home state and having the agency itself also registered in all 50 states so as to allow out-of-state sales. As we grew and heard from regulators that they wanted each licensed broker individually to acquire a non-resident license, we set out to do just that. As we have grown, so have our compliance procedures.

Job offer letters we send to new sales representatives and account managers specify that new hires in these roles must be licensed before starting work.

We have built custom software for our CRM system that helps us ensure compliance by checking for appropriate licensure when each sale is closed.

We have taken corrective action, including terminating the employee, when we have learned of violations, either because individuals failed to pass the brokerage exam or have otherwise violated our licensing policies.

Any accusations of other individuals violating our licensure policies will be thoroughly investigated, and we will take appropriate remedial action.

In some cases, there are sales reps who start at Zenefits before obtaining their license. Like any other unlicensed Zenefits employee, they are not allowed to sell insurance until they have obtained their license. They can sell the Zenefits platform as a whole -- which does much more than insurance -- until securing their license.