A 2013 start-up, Zenefits is a San Francisco based company whose business model was to provide online HR services to businesses and then encourage those same businesses to use Zenefits as an insurance broker selling lines of insurance needed by HR departments.

The company was started by funding from well known gurus such as David Sacks who made his first fortune as an early executive at PayPal, then a second as the co-founder of Yammer, a social network for businesses, which he sold to Microsoft in 2012 for $1.2 billion. He then became an early investor in Uber and SpaceX.

Zenefits launched in April 2013 through startup incubator Y Combinator. Within eight months it was on track to make about $1 million in recurring annual revenue. It moved into a highrise in San Francisco’s SoMa district and expanded from fewer than 20 people to roughly 500, many on the sales side. By the end of 2014, Zenefits hit it’s $20 million recurring revenue goal and was making good on its promises to shake up the insurance brokerage business.

Soon, Zenefits ran into snags. The Utah Insurance Department banned it from operating in the state because the agency considered the free HR software to be in violation of a law against offering rebates to customers. Still, Zenefits kept growing. By the middle of 2015 it was serving 14,000 businesses and in the process of hiring more than 1,000 additional employees.

But in Novermber 2016 the California Department of Insurance announced that the enforcement action taken against Zenefits for multiple insurance broker license violations resulted in a $7 million penalty.

Zenefits was charged with allowing unlicensed employees to transact insurance and circumventing insurance agent education requirements. This was the largest penalty assessed by any commissioner against Zenefits and one of the largest penalties for licensing violations ever assessed in the California department’s history.

Shortly after the California investigation into Zenefits’ business practices and compliance began, the company announced publicly that they were not complying with insurance laws and regulations, which was followed by the resignation of Zenefits’ CEO, Parker Conrad.

The 2016 settlement agreement obtained by the California insurance commissioner included a $3 million penalty for licensing violations, including allowing unlicensed employees to transact insurance, a $4 million penalty for subverting the pre-licensing education and study-hour requirements for agent and broker licensing, and a $160,000 payment to reimburse the Department of Insurance for investigation and examination expenses.

Zenefits has been investigated and fined in other states for similar compliance issues, including Texas, Massachusetts, Tennessee and Washington. In July 2016 Zenefits reached a settlement with the Tennessee Department of Insurance and Commerce, agreeing to pay a fine of $62,500. And the Texas insurance regulators have fined Zenefits, $550,000 for its past use of unlicensed health insurance brokers. BuzzFeed published a series of articles about Zenefits’ use of unlicensed brokers. And details of how the company devised schemes to circumvent broker licensing laws have been reported by Bloomberg Businessweek.

Jay Fulcher the former CEO of Ooyala and Agile Software was ultimately appointed its new CEO, Since then, Fulcher has been trying to re-orient Zenefits into something that’s seen as compliant and business-friendly – and away from the chaotic culture that it had under the prior CEO Parker Conrad who was shown the door.

Fulcher and the company have come out this week with two big announcements: first, the name isn’t going anywhere while the brand gets a makeover; and second, that it’s getting out of the insurance brokerage business and leaving that up to new partners. By doing that, Zenefits hopes to become an all-in-one HR tool for small businesses while leaving insurance brokerage deals to partners.

Initially, Zenefits will partner with OneDigital, an employee benefits company, as it starts to expand to partner with more regional and local brokers that have the expertise for various companies’ needs.