Analysis of CommInsure's Practices and CBA's Culture

This assignment examines the practices of CommInsure, a insurance company affiliated with Commonwealth Bank of Australia (CBA). It delves into the findings of an ASIC report, which revealed misleading advertising statements by CommInsure. The assignment also discusses CBA's culture and its impact on corporate social responsibility.

FINANCE MONEY MATTERS

TABLE OF CONTENTS
EXECUTIVE SUMMARY.............................................................................................................1
INTRODUCTION...........................................................................................................................2
PART A...........................................................................................................................................2
Recommendation through CRR Report and CommInsure breaches...........................................2
CBA code of conduct and CommInsure breaches......................................................................2
PART B............................................................................................................................................3
1. CommInsure’s practices and financial decisions....................................................................3
2. Coverage of CBA's Corporate Responsibility report..............................................................4
3. CommInsure practices related to CBA's CRR report..............................................................4
4. Explaining whether socially responsible and sustainable outcome impact CBA or not?.......5
5. Identifying ethical principles which were breached by CommInsure in comparing CBA's
Code of ethics..............................................................................................................................5
6. Discussing ethical violations with context of stakeholder .....................................................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................8

EXECUTIVE SUMMARY
CommInsure is a business which is registered as name of Colonial Mutual Life
Assurance Society and Commonwealth Insurance Limited (CIL). It is one of the major
subsidiary located in Australia. Usually it provides insurance of home and car as well. The
present report would be identifying its espoused level of behaviour which had been demonstrated
through CommInsure breaches with context of Corporate Responsibility report. It also gives
understanding on various sections which are relevant code of conduct within CBA which had
been breached through CommInsure. It had been concluded that there were nor breaches of law
as outcome.
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INTRODUCTION
CommInsure is considered as one of the largest insurers and replicated as insurance arm
with reference to Commonwealth Bank of Australia (CBA). The present report is discussing
about CommInsure scandal as it had determined espoused level of behaviour with reference to
CBA and its actual behaviours articulated CommInsure breaches as per Corporate Responsibility
report. It had also described its financial decisions and practices along with proper coverage of
CBA's report. It had also identified various ethical violations as compared to code of ethics of
CBA.
PART A
Recommendation through CRR Report and CommInsure breaches
Recommendation by CRR report CommInsure Breaches
 They would advocate for various
initiatives in order to gaining better
balance among outcome of retirement
and life insurance.
 Use of simple english with appropriate
assistance by regulatory for
implementing all standardised
definitions.
 Alterations for making it easy for
rationalising legacy products and to
decrease cost with reference to its
customers (Corporate Responsibility
Report, 2017).
 New background check protocol with
context to potential employees.
 Selling of faulty products which had
impaired consumers.
 Backdated in Australian securities and
investments commission review.
 Database had been altered for making it
in robust format.
 Organization was incentivised
financially for knocking back on claims
for people who were dying and sick.
 Undue pressure on doctors for altering
medical opinions.
CBA code of conduct and CommInsure breaches
CBA Code of conduct CommInsure Breaches
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 Presence of various obligations and
rights to each party whether it is for
customer or banker relationship.
 Handling of personal information.
 Measures for facing difficulty in
finance.
 Responding on customer complaints.
 It promotes high standards in context of
service to its consumers (Phillips,
2017).
 Benchmark had been provided for
consistency in its specific industry.
 Sales would be monitored through staff
and authorized representatives.
 Faulty products had been sold to
impairment of consumers to get away
from it.
 It had backdated in Australian
Securities and Investments Commission
review (Matthews, 2016).
 There is presence of changes in
database with reference to format
which is robust.
 The business entity was directly
incentivised financially for the purpose
of knocking back with context of its
claims for people who were getting sick
and dying.
 There is presence of undue pressure on
doctors for changing their opinion.
PART B
1. CommInsure’s practices and financial decisions
CommInsure is business which is registered as name of Commonwealth insurance
Limited (CIL) and Colonial Mutual Life Assurance Society Limited (CMLA). The insurance for
home and car had been issued through Commonwealth Limited and protection for home loan had
been issued via Colonial Mutual Life Assurance society. The practices and financial decisions
are stated as absence of evidence for supporting allegations which are claimed through
CommInsure managers as it had been implied under pressure on doctors for altering after opinion
of medical. It would be stating various initiatives from industry to attain better balance among
life insurance and retirement outcome. There would be alterations to make it easier for
rationalising products of legacy and for decreasing costs to consumers (Ferguson, 2017).
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It helps in managing fraud with appropriate definition of control principles by group,
compulsory accountabilities and requirements. It would be articulating that fraud would not be
tolerated and directly committed for maintaining and promoting very sound ethical culture. In the
same series, their practices are continuously evolved as they are considered a signatory equator
principles and had introduced 9 environmental, social and governance lending commitments in
year 2014, which had been embedded approach for lending with reference to business.
2. Coverage of CBA's Corporate Responsibility report
It consists of different investment with reference to financial education program for youth
and children. In the last decade, this specific program had assisted different vocational, primary
and secondary education schools for skills of managing money. There is huge proportion that
had been invested in education, which is more than 16 billion. There are various organization
which are focussing on youth as they awarded $2 million via fund of staff community. The
hardship had been provided to more than 6000 customers in each month (Longstaff 2016).
Illustration 1: Practices of CBA as Corporate social responsibility
(Source: Policies and practices, 2018)
3. CommInsure practices related to CBA's CRR report
CommInsure had commissioned various independent experts such as DLA piper,
Delloitte and Earnst Young for investigating various allegations and these concerns. It was
justified there was absence for supporting major concerns of misconduct which is wilful and
widespread. It had been also concluded by Deloitte that there are various opportunities for
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improving elements of process of claims for improving experience of customer. It would
implement these specific recommendations with context to CBA's report such as:
 The training of staff should be updated for staff claim to review on findings and various
alterations in procedures and policies.
 There would be detailed analysis of claims which would impact to customer with
reference to improve processes.
 It would also enhance the claims on quality framework of data for ensuring about better
classification with each claim (Christodoulou 2017).
 The process of assessment of claim had been stream lined and standardised which consist
of correspondence to customer for delivering better experience for their customers.
4. Explaining whether socially responsible and sustainable outcome impact CBA or not?
The socially responsible and sustainable outcome had impacted Commonwealth Bank of
Australia in positive aspect. With context of interests, concerns and priorities of evolution of
stakeholders which would set initiatives and target. It would also set innovative goals and
initiatives with benchmark for driving sustainable value and vision is also supported which gives
positive alteration with reference to each stakeholder. Different key developments like goals of
sustainable development for evolving and refining approach with reference to corporate
responsibility. The business practice in efficient aspect could empower people, communities are
strengthened and plays vital role for responding to its global trends. They are highly focussed on
policies which are transparent, sustainable and balanced decisions.
It had been recognised that function in limiting alteration in climate for raising efficiency
in operations with context of environment. From the year 2001, it had been measured, reduced
and reporting for footprint of environment. It had also implemented different initiatives with
contribution of sustainable property strategy. It had been justified that Commonwealth bank had
been names as most sustainable business of Australia in Global 100 Index and considered on 1st
rank among different banks at worldwide perspective.
5. Identifying ethical principles which were breached by CommInsure in comparing CBA's Code
of ethics
The scandals were responded by bosses by justifying that everything could be solved by
raising level of control. It is considered as over beliefs, values and behaviour to its employees.
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The specific reason about debates over ethics with context of banking which had been incurred
due to criticising of people by dominating norms of corporate which had not been performed for
expectations of corporation. They have various holding banks with context to account. In the
same series, Australian financial service sector had been plagued for exemplifying on method of
corporation that how they are held publicly with reference to action, and to accept responsibility
in pressurised format.
There was emergence of pattern which had been responded through CBA to its ethical
crisis when it ranks. The exposure of ethical failures in wealth management arm of bank must
have been catalyst for review in comprehensive aspect of business along with issue which is
specifically sensitive for issues of customer relation. There was set of basic decency which had
favoured financial interests with context of corporation and had been extracted that decisions are
taken by people. It had been appeared that facing difficult problems which are incapable as it
includes breach with reference to ethics but without any help of outsiders. If complexity is
available in organization for managing and there is requirement of board of bank for considering
tightly focused group.
6. Discussing ethical violations with context of stakeholder
CBA Chief executive: Lan Narev
He had not managed this specific scandal which was named as financial planning scandal
whose outcome as a senate inquiry, which had been from royal commission in CBA. The bank
had default its position which had downplayed issues. The succession plan handling has created
various rumours and speculation for sweeping bank and discussion of weekends had directly
factored in particular comments (CommInsure Notes ASIC report, 2018). The CBA's culture had
laid bare in inquiry through parliament with reference to loans which were impaired. The
combative and legalistic approach had worked in short duration but it has key role related to
current mess and culture. With reference to issues of conduct, CBA totally denied but evidence
of submitters and in this specific inquiry has adjusted question on conduct which is unethical
and unreasonable.
CONCLUSION
From the above report, it had been concluded that CommInsure had considered various
ramifications of their financial decisions with context to sustainability and social responsibility.
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It had been approved from ASIC that there was not any breach of law and its customers were
treated in better aspect. There was planning for investigating practices of surveillance which are
applicable to insurance organizations by observing channels of direct insurance along with its
policies. Along with this, ASIC had reviewed advertising and extracted that statements were
misleading and unreal.
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REFERENCES
Books and Journals
Matthews, A., 2016. The financial services industry: Whistleblowing and calls for a royal
commission. Precedent (Sydney, NSW), (136), pp.35.
Phillips, N., 2017. Legal threat exposes gaps in climate-change planning. Nature
News, 548(7669), pp.508.
ONLINE
Christodoulou 2017. ASIC handed CBA advanced copy of CommInsure Report. [Online]
Available through: <https://www.smh.com.au/business/banking-and-finance/asic-handed-
cba-advanced-copy-of-comminsure-report-20170826-gy4pse.html>
CommInsure Notes ASIC report. 2018. [Online] Available through:
<https://www.commbank.com.au/guidance/newsroom/CommInsure-notes-ASIC-report-
201703.html>
Corporate Responsibility Report. 2017. [Online] Available through:
<https://www.commbank.com.au/content/dam/commbank/about-us/shareholders/pdfs/
corporate-responsibility/2017/2017-corporate-responsibility-report.pdf>
Ferguson 2017. CommInsure report an indictment on whole Industry. [Online] Available
through: <https://www.smh.com.au/business/banking-and-finance/comminsure-report-an-
indictment-on-the-whole-industry-20170323-gv4w8h.html>.
Longstaff 2016. Lessons from CommInsure. [Online] Available through:
<http://www.abc.net.au/religion/articles/2016/03/09/4421566.htm>
Policies and practices. 2018. [Online] Available through:
<https://www.commbank.com.au/about-us/opportunity-initiatives/policies-and-
practices.html?ei=Policies>
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