Comminsure Financial Scandal: Breach of Ethics and CSR Practices

The report discusses the CommInsure financial scandal where they have been accused of breaching ethical conducts and CSR practices. It includes a description of the scandal, evaluation of policies and practices, identification of ethical principles breached, and importance of sustainability and social responsibility for CBA.

Running head: MONEY MATTERS
Money Matters
Name of the Student
Name of the University
Author note:

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Table of Contents
Executive Summary.........................................................................................................................2
Introduction......................................................................................................................................2
Discussion........................................................................................................................................2
i) Description of the CommInsure financial decisions and practices..........................................3
ii. Brief description of the coverage of CBA’s Corporate Responsibility Report (CRR)...........3
iii) Evaluation of Policies and Practices of Comminsure that are relative to the CSR report of
CBA.............................................................................................................................................4
iv) The importance of sustainability and socially responsible outcomes for CBA.....................5
v) Identification of the ethical principles that have breached by CommInsure in comparison to
the Code of Ethics of the CBA...................................................................................................6
Conclusion.......................................................................................................................................7
Reference List..................................................................................................................................7

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Executive Summary
The CBA that is known as the Commonwealth Bank of Australia has its insurance arm that is
known as the Comminsure. The Comminsure 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. In the following report
would elaborate on the various heads that have been breached by the Comminsure that includes
Corporate Social Respobilities principles, Life Insurance Code of Practice of CBA,
Sustainability and social responsibility and transparency had been violated.
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

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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-

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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,

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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

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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.

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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.

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Reference List
Agrawal, A. and Cooper, T., 2017. Corporate governance consequences of accounting scandals:
Evidence from top management, CFO and auditor turnover. Quarterly Journal of Finance, 7(01),
p.1650014.
Aju, O. and Beddewela, E.S., 2018, July. Exploring the dynamics of employee social
expectations and employee-centred CSR. In Academy of Management Proceedings (Vol. 2018,
No. 1, p. 15081). Briarcliff Manor, NY 10510: Academy of Management.
Beck, J. and Paton, G., 2018. Corporate law: The Royal Commission: Corporate culture
spotlight: Where is all this heading?. Governance Directions, 70(6), p.351.
Breitinger, D. and Bonardi, J.P., 2017. Firms, Breach of Norms, and Reputation
Damage. Business & Society, p.0007650317695531.
Davis, K., Levy, Y. and Delak, B., 2018. Towards a Development of Cybersecurity Risk-
Responsibility Taxonomy of Small Enterprises for Data Breach Risk Mitigation.
De Roeck, K., Raineri, N., Scheidler, S. and Jones, D.A., 2018, July. Giving the Benefit of the
Doubt: A Micro-Level Investigation of the Insurance-Like Effect of CSR. In Academy of
Management Proceedings (Vol. 2018, No. 1, p. 16540). Briarcliff Manor, NY 10510: Academy
of Management.
Dixon, K. and Finnane, G., 2018. S is for stakeholders, not shareholders: The shift in board
responsibility. Governance Directions, 70(6), p.322.
Lock, I. and Seele, P., 2017. Politicized CSR: How corporate political activity (mis‐) uses
political CSR. Journal of Public Affairs, p.e1667.
McIlroy, J., 2017. Re-nationalise the commonwealth bank. Green Left Weekly, (1149), p.11.

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McIlroy, J., 2018. Bank scandals fuel calls for completely new system: Why we should
nationalise the big four under democratic control. Green Left Weekly, (1178), p.8.
Pearson, G., 2016. Failure in corporate governance: financial planning and greed. Handbook on
Corporate Governance in Financial Institutions, p.185.
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].