Tennessee Department of Commerce and Insurance (TDCI) is announcing today that it’s making human resources and insurance service provider Zenefits pay a $62,500 fine after the startup’s employees sold insurance to companies without having proper licenses.

The state agency points to Zenefits’ self-reporting of issues and the steps it’s taken to fix problems.

“Among such remediation efforts is a new company mandate that all insurance producers complete 52 hours of continuing education courses, including 12 hours of ethics training,” the TDCI said in a statement. “Technical controls will also confirm the license status of a producer before he/she begins selling insurance to a potential Tennessee client.”

Because Zenefits has taken those actions — and others, like forming a compliance team and adding to its board of directors — the state agency is not imposing bigger fines, Zenefits chief executive David Sacks explained today in a blog post. This is Zenefits’ first regulatory settlement, Sacks wrote.

Tennessee is one of multiple states in which Zenefits employees at one point sold insurance without having the proper licenses. It also happened in New York and Washington state, among other places, as BuzzFeed reported. Alongside that activity Zenefits employees also previously have engaged in extensive partying, according to BuzzFeed.

Sacks, a former executive at Yammer and PayPal, replaced cofounder Parker Conrad as chief executive of the startup in February. Since then Zenefits has laid off more than 350 employees, and another 100 have left with severance packages. The San Francisco-based startup recently dropped its valuation down to $2 billion from $4.5 billion, according to Reuters.

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