Law360 Publishes Shawn Hanson, Crystal Roberts Article on Free Insurance Services

“Recent InsurTech Obstacles And Their Potential Solutions,” an article by Akin Gump litigation partner Shawn Hanson and staff attorney Crystal Roberts, has been published by Law360.

The article discusses an order from the Washington state insurance commissioner to cloud-based human resources software developer Zenefits to cease providing free access to software. As the authors write, “Zenefits offers an online, cloud-based, software-as-a-service platform that integrates “apps” for the administration of human resources, payroll and employee benefits. The core HR apps, which include hiring and terminating employees, managing employee information, tracking employee paid time off, generating Affordable Care Act filings, helping to ensure ACA compliance, and generating various employer reports, are offered to the public at no charge…For certain insurance-related features centered on insurance enrollment and administration, Zenefits requires a client to designate Zenefits as its broker of record.”

In November, following a nearly two-year investigation, the insurance commissioner “found that Washington anti-rebating and inducement laws…prohibit a licensee like Zenefits from offering valuable software functions or other valuable benefits for free or at less than fair market value to the public.”

Hanson and Roberts discuss two challenges for insurance producers operating in the Evergreen State: Can any noninsurance services be offered to the public for free, and can any insurance-related services be offered to the public for free? In response, they outline opinions from regulators around the country and discuss possible solutions, including charging a fee for services and challenging the order through the administrative process, state courts or legislative measures.

To read the full article, please click here.