Zenefits CEO steps down

LOS ANGELES - The CEO of a Silicon Valley firm that looks to sell health insurance in a new way, essentially skirting the middle man, has resigned.

Parker Conrad, the co-founder and CEO of Zenefits, stepped down Monday, the company announced, and was replaced by former Yammer founder Chief Operating Officer David Sacks.

Zenefits, touted by business magazines as a fast-rising tech startup has been dogged by recent reports that it skirted insurance laws and allowed unlicensed brokers to sell health insurance.

"I believe that Zenefits has a great future ahead, but only if we do the right things," said Sacks in a blog post announcing the changes. "We sell insurance in a highly regulated industry. In order to do that, we must be properly licensed. For us, compliance is like oxygen. Without it, we die."

Zenefits has been valued at $4.5 billion in funding, and has several high-profile investors, including venture firm Andreeson Horowitz, actors Jared Leto and Ashton Kutcher and Box CEO Aaron Levie.

A lengthy BuzzFeed article from November looked into Zenefits insurance selling issues.

In the blogpost, Sacks said the company needs to "admit" the issues, and "remediate it as soon as possible." Zenefits hired a Big Four auditing firm to conduct an independent third-party review of it's licensing procedures that "we will turn over to regulators as soon as possible. I will expand that effort into a top-to-bottom review to ensure appropriate and best-in-class corporate governance, compliance and accountability."