People Deserve Second Chances, even in the Insurance Industry

By | April 14, 2016

Two years ago, the online health-insurance broker and human-resources portal Zenefits hired an insurance agent with a criminal record. Now the San Francisco Chronicle is attacking the firm for that decision.

While Zenefits certainly has had some well-documented compliance problems, this hiring wasn’t one of them. If anything, it’s an example from which other insurance brokers and agents might have a bit to learn, when it comes to dealing with ex-offenders.

According to the Chronicle, Zenefits, hired Michael Henry Solomon as an insurance agent despite his having committed a number of relatively minor crimes in the late 1990s – with apparently none that involved insurance sales. Zenefits’ own background check may not have uncovered these events.

But between his brushes with the law and working for Zenefits, Solomon worked consistently and held two jobs working in the insurance industry. He had a valid California state insurance license, which he obtained after an initial rejection. In California, as in all other states, getting almost any sort of professional license after a criminal conviction requires examination of the specifics of past offenses and, almost always, lots of sterling character references.

There’s also no evidence that Solomon committed any sort of illegal act while employed by Zenefits or that he harmed any of its customers. His only recorded crime in the past 15 years was a drunken-driving conviction. Given that Zenefits certainly knew about this when it hired him and that the company’s model strongly suggests that driving wasn’t part of the job, it’s clearly something the company’s hiring managers decided wasn’t disqualifying.

In short, Zenefits gave a second chance to someone who had committed crimes but had shown evidence of reform and had worked in the industry for more than a decade. Solomon seems to have been just the type of person, in other words, who likely deserves a second chance.

People who sell insurance or any other financial product should likely be held to higher standards of financial probity than the public at-large. It is beyond obvious that people convicted of insurance-related fraud should generally be bared from the industry. But a minor criminal record needn’t be a reason to exclude people from the insurance industry altogether.

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About Eli Lehrer

Eli Lehrer is president of R Street Institute, a national think tank that supports free markets, effective government and responsible environmental stewardship. More from Eli Lehrer

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