BUSN104 Money Matters

Introduction

The Comminsure that is the insurance hand of the Commonwealth Bank of Australia recently has been tangles up in various cases where they have been accused to breaching the ethical conducts and CSR practices. The act includes manipulation of the medical reports and compelling the doctors to represent the medical reposts in such a way that would reject the insurance claims of the consumers. The insurance hand CommInsure before the scandal was known as for its reputation of offering life cover to more than 3 million members, with 1.8 billion dollars of in-force premiums around the USA. The incident has ruined the culture of the Commonwealth Bank, who is going on rebuilding the reputation.

Discussion

 i) Description of the CommInsure financial decisions and practices

The Commonwealth Bank of Australia is one of the financial institutes in Australia which has been engaged in various scandals that have destroyed the goodwill of the organization. One of the financial scandals that had shaken the base of this organization is the CommInsure scandal which affected a number of customers who had been promised of various benefits but were denied such benefits when it came to actual ground situation. CommInsure is the insurance and financial planning arm of the Common wealth Bank of Australia. As reported by Yeates in The Sydney Morning Herald (Yeates 2018) reports "doctors in the bank being pressured to change their assessments of customers to avoid payouts; delaying payouts to terminally ill customers; and a refusal to honour claims to former staff who were medically retired." This tremendous unfair practice of the Insurance body and related decisions has come into knowledge of the people in general and that has resulted in a great damage in the goodwill of the company. In a terrible breach of ethics CommInsure had deleted and destroyed several files under claimants, this is a direct fraudulent behavior and goes against the beneficence code in the Code of conduct of the CRR (Corporate Responsibility Report) published by the Commonwealth bank of Australia. There are several legal cases and several unofficial victims who had been suffering due to the fraudulent activities of the financial body of the bank (Agrawal and Cooper 2017)

ii. Brief description of the coverage of CBA’s Corporate Responsibility Report (CRR)

The Common Wealth Bank of Australia had published its own Corporate Responsibility Report which has several guidelines about ethical practice in banking and what the various guidelines that the company and its several branches must follow to keep a fairness in their operations. Some of the key points covered in the Corporate Responsibility Report include- Diversity and Inclusion, Financial stability transparency and disclosure, Wellbeing of the workforce, Responsible leading investing and procuring, privacy and security of data, and climate change risk and opportunities among others (Breitinger and Bonardi,  2017). These are some of the aspects that have been covered by the corporate responsibility report of the Commonwealth Bank of Australia. The organisation through this report has aimed to give the customers the best banking and financial experiencing by protecting the rights of each individual person banking with them and by ensuring that the promises are fulfilled. The corporate responsibility report also vows against any fraudulent activities and promises to ensure a very free and transparent financial business process (Pearson 2016).

iii) Evaluation of Policies and Practices of Comminsure that are relative to the CSR report of CBA

The analysis of the financial planning of the Comminsure it can be seen that the insurance firm’s CSR practices connection with policies and practices of CBA has been violated. Primarily, fundamental accountability principle has been violated by Comminsure since it did not take any charge for the breaches. As per Aju and Beddewela 2018, the accountability principle it is vital for the organization to report the activities that have been concluded to all the parties that have been affected (Lock and Seele 2017). It would show that the bank is a element of a societal network extensive firm instead of being a firm who merely focus on the employees. Secondly, the transparency violation clause is evident in the CBA actions. It is not ethical for any company to influence figures and facts to misinform the stakeholders. The transparency breach by CBA or Comminsure was by using medical descriptions that were outdated and captured under the policies of life insurance to deceive the holders of the policy. Other than that, in the Commonwealth Bank of Australia the Life Insurance Code of practices was manipulated, however, the code pledge is to be respectful, truthful, timely, and fair and open to the practice of strategy for communication. The Life Insurance Code of Practice is the most pertinent. In context to financial planning decisions of CBA the financial management has a vital role in the daily company operations. As per the CSR Report of 2017 of CBA the transparency principle enables the Australian Commonwealth Bank to efficiently collect and plan data investment decisions that are viable.

iv) The importance of sustainability and socially responsible outcomes for CBA

The concept of sustainability deals with the meeting the present needs without the compromise of the future generations the capability for their demand satisfaction. The social responsibility, on the other hand helps in the generation of the profit at the time of undertaking the activities that would result in benefiting the society (Davis, Levy and Delak 2018). It can be identified that there exist a direct correlation between the two. The Commonwealth Bank of Australia, in the CSR report of 2017 has emphasised greatly on the concerns while incorporating the plan of corporate responsibility. As per the plan there is three categories that is evident that includes education, innovation and a sound practice of business (Beck and Paton 2018).

The comprehensive review of the above three categories contained in the 2017 CBA’s CSR report, i.e., innovation, education, and sound business practices can be interpreted to relate to the aforementioned the descriptions of corporate social responsibility and organizations’ sustainability. Also, in the metric productivity statistics of the CBA’s 2017 CSR report, it continues to portray the social, customer consummation and environmental metrics of the firm. Some statistics that capture this, for instance, include support of the local community, provision of financial literacy programs for schools and participation of employees in environmental conservation practices (McIlroy 2018). These facts and statistics have increasingly continued to increase from 2013, an implication that that sustainability and corporate social responsibility are fundamental parts of the Commonwealth Bank of Australia.

v) Identification of the ethical principles that have breached by CommInsure in comparison to the Code of Ethics of the CBA

The principles of Ethics offers a framework that is generalized with some issues related to ethics may be assessed. With respect to the Commissure Insurance actions, the principles of moral that have been violated are fidelity, beneficence, and justice. The beneficence elaborates the decision making on the basis of moral and correct (De Roeck et al. 2018). The CBA analysis of the actions of the insurance company indicates that the beneficence ethical principle was not upheld.

The fidelity that has also been violated by the Commissure, deals with remaining faithful to others by being honest, faithful and respectful to others. In case of failure to stay truthful in a business setting, stakeholders end up being denied the rights to exercise free choice. In the context of actions of CBA, the Commissure has compelled doctors to stop providing the results and delete the medical views in order to stop the insurance claims. This does not conform with the the principle of fidelity requirement (Dixon and Finnane 2018).

The justice refers to the principle that has been dishonoured by the actions of CBA. The principle shows that the decision-makers must put stress on the measures that are true and fair to the persons involved (McIlroy 2017). The CBA managers and the employees have made the various decisions that do not follow the principle of justice as aresult the victims have suffered due to the unethical rejected claims.

Conclusion

The CommInsure Insurance was red-handedly caught for performing its operations without keeping a good faith and manipulating its policy holder’s claims. The acts include manipulation of the medical reports and compelling the doctors to represent the medical reposts in such a way that would reject the insurance claims of the consumers. The various heads that have been breached by the Comminsure that includes Corporate Social Responsibility principles, Life Insurance Code of Practice of CBA, Sustainability and social responsibility and transparency had been violated.  After analysing the financial planning scandal of Commnsure, the biggest and the present dilemma faced by the CBA is the incapability to keep the stakeholder’s trust. In case the company applied the CSR rues and the principle of ethics as per the CBA, the dilemmas that have been found out that would sort the issue and thereby there would be a reduction of the harm of the future policyholders.

Reference List

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Yeates, C. 2018. CommInsure: Scandal to hit CBA brand, again. [online] The Sydney Morning Herald. Available at: https://www.smh.com.au/business/banking-and-finance/comminsure-scandal-to-hit-cba-brand-again-20160308-gndj4y.html [Accessed 7 Sep. 2018].