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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.