Ethical Analysis of CBA's Medical Insurance Scam

This assignment discusses the unethical practices of the Australian Bank of Commerce (CBA) in handling medical insurance claims. The bank has been accused of deleting files, misusing medical reports, forcing doctors to change opinions, altering disease descriptions, and delaying payouts. This analysis assesses the management and policies of CBA and their violations of ethical principles such as beneficence, respect for autonomy, and least harm. It also explores the theories of virtue and rights in relation to these actions. The assignment aims to provide a comprehensive understanding of the unethical practices and their implications.

Running head: SOCIAL RESPONSIBILITY
Social Responsibility
Name of the Student
Name of the University
Author Note

1
SOCIAL RESPONSIBILITY
Table of Contents
Introduction......................................................................................................................................2
Discussion........................................................................................................................................2
Analysis of the Common wealth bank of Australia’s financial decisions and the Corporate Social
Responsibility principles in context to the given situation..............................................................2
The commonwealth bank of Australia and their sustainability.......................................................4
Violation of the ethical principles....................................................................................................5
Ethical theories and its violations....................................................................................................6
Conclusion.......................................................................................................................................7
References........................................................................................................................................8

2
SOCIAL RESPONSIBILITY
Introduction
During the year 1911, the Act of Commonwealth Bank initiated the operations of
Australian Commonwealth Bank, which is also simply known as CBA. ‘Andrew Fisher labor
government’ did the establishment of the same. The CBA was first bank in Australia to get the
federal government guarantee (Bank 2014). Within a very short time period, the bank stared to
establish both saving and general banking business.
The three main countries in which the common wealth bank of Australia operates
includes the United States, New Zealand and the United Kingdom. There are variety of ranges of
the services provided by the bank that includes superannuation, management of funds, retail,
Institutional banking, brokerage services, insurance and many more (Sivaraman and Turner
2016). The Commonwealth Bank is also abbreviated as Commbank was listed in the stock
exchange of Australia in August 2015. It was then known as largesrt bank in the Southern
hemisphere.
Discussion
Analysis of the Common wealth bank of Australia’s financial decisions and the Corporate
Social Responsibility principles in context to the given situation
In accordance to the annual report of sustainability of the company of the Australian
Common Wealth Bank, there are numerous policies and principles related to the corporate social
responsibility. It includes various kind commitments as mentioned in the report like ensuring,
professionalism, honesty and fairness in dealing with its clients (Rice 2017). The statement of the
Corporate Social Responsibility states that there are various commitments of the company like
political donations, countering money laundering and frauds management. The main mission of
the company is to promote financial well being in the various businesses, communities and the
customers (Islam, Jain and Thomson 2016).
The Annual Report of the CBA 2017 reveals various ethical principles and policies.
According to the report, the CBA treats each other the way they would like to be treated.
Therefore, it makes sure that there is respect within themselves. They also make sure that there is

3
SOCIAL RESPONSIBILITY
compassion in the working environment (Boersma 2015). The management of CBA are aware of
the human vulnerabilities thus includes kindness in the work by showing generosity,
appreciation, showing humanity and taking rational judgments. Moreover, there is trust that
ensures the honesty and dignity is there in the business interactions. The element of trust is build
and earned in the conscience that opposite person in morally satisfied. The commonwealth bank
of Australia also commits to be true and fair and promotes leadership in workforce.
Before stating the financial decisions taken by the commonwealth bank, it is important to
know the purpose and objectives of the Corporate Social Responsibility as well as the operations.
The CBA focuses mainly in the protection and enhancement of the wealth of its customers.
Therefore, it provides cost effective and competitive banking and financial service. It behaves
that the consumers transact with confidence and convenience. it also generates returns that are
effective for many Australian customers who owns their shares and also through the process of
superannuation (Bartlett 2016).
Then comes the financial decisions, the CBA provides fiancé to more than 2 million
clients and pays interest to more than 11 million account holders. The annual payroll expenditure
the banking group is more than $5 billion. Moreover, CBA is the Australia’s fourth largest
taxpayer; it has paid more than $3 billion tax in the financial year of 2017. The CBA has
conducted various health and well being programs for spreading banking knowledge. The CBA
group has also been delivering a range of financial literacy programs to more than 280000
students across the world.
However, the insurance company CommInsue highlighted the case of fraud involving the
commonwealth bank. As per the insurance company, the bank has been accused to influence the
medical intuitions so the insurance claims of the patients are rejected. It involved wrong use of
the medical reports that includes files deletions and making the doctors to change the description
of the diseases so that the insurance claims of the clients gets rejected. This misconduct contrasts
with the fundamental principles and policies of the banking company and had wrong impact on
reputation and goodwill of the company.

4
SOCIAL RESPONSIBILITY
The commonwealth bank of Australia and their sustainability
As per the sustainability report of 2017, it is evident that the social responsibility and
sustainability have a great impact on the banking company. They clearly consider sustainability
and social responsibility in their operations. As on the date of May 2013, the group of the
Common Wealth Bank declared a new decision in which enhancement focus has been made on
the financial well being of the consumers, businesses and the community. Their new goal is to
highlight various on culture, innovations and improvise the policies. There has been a new set of
sustainable goals that says:
1. Financial services that are responsible: Their approach to the terms of financial
services are to be made more dependable
2. Sustainable work force: To sustain and attract a workforce that is talented and there
must be a innovation of the existing one
3. Environmental stewardship: To make necessary measurement and reduction in the
existing environmental limitations and provide effective solutions to help the customers
and the employees to reduce theirs
4. Improvisation of the policies of the business: The sustainable business principles and
policies that have been set by the CBA that includes a system that is well established
management, reporting that transparent and a strong governance responsible procurement
5. Community service: To make contributions programs those are effective to the
communities with the help of beneficial partnership
Various Sustainability Services that the company has conducted are as follows:
 Increase of the flexibility in work
 The CBS has provided 24 hours real time banking
 Initiatives to help in reduction in usage of carbon by 20%
 Many effective awareness and educational programs to make the students aware of the
banking system and policies.
Violation of the ethical principles
The various principles of ethics include:

5
SOCIAL RESPONSIBILITY
Principle of Justice: The principle of justice states that mangenent should focus on the actions
that are fair. This refers to the decisions that are ethical and should stable with the Theory of
Ethics. The customers of CBA had to face injustice in the present fraud case
Principle of Beneficence: The principle of beneficence provides guidance to the management to
make the judgment as to what is right and what is wrong (Newton 2017). This focus is made on
the things that is ethical. This is also related to the utility principle that states that there should
be efforts to strive to achieve the greatest amount of good for the benefits of the clients. In the
given situation, CBA has violated the principle and has done no good to the insured patients
who cannot obtain their insurance claim..
Principle of Respect for Autonomy: This principle states that the management process should
focus on allowing the individuals to be autonomous. The people should have control in their as
they are the ones who completely understand their chosen type of lifestyle (Gitman, Juchau. and
Flanagan 2015).
Principle of Least Harm: The least harm principle deals with the situations in which there is no
choice that is beneficial. In these cases, management seeks to do the minimum harm and to do
harm to least number of people. The scam case as reported by the CommInsue tells that the
innocent customers have lost their medical insurance amounts in this fraud case, which is harm
Ethical theories and its violations
The ethical theories helps in the process of decision making and provides guides for
taking the actions there are four broad categories of the ethical theories. The categories are:
 Theory of virtue: It is the ethical theory of values. A person is judged is done by their
character rather than by their action. The character and the actions are by their common
behavior. The personal morals, reputation, and motivation are considered. The
unbalanced behaviors are taken as immoral (Kara 2017). The action made by the CBA
lacks in virtue as the manipulation of the doctors to extract the medical insurance money
of the clients is an immoral and unethical action.
 Theory of rights: The ethical theories on rights, it is a theory that is established by the
society. As a result they are given the highest priority. There are the fundamental policies

6
SOCIAL RESPONSIBILITY
accepted generally by the public. The CBA has violated the right of the insured patients
by rejecting their claim. This it is a criminal offence. This is a case where innocent
patients are harmed. This is against the mentioned commitments and can harms the
reputation.
Conclusion
The given scenario as pointed out by the largest insurance company in Australia that the
Australian bank of commonwealth has been caught in some fraudulent practices like deletion of
files, misusing of medical reports, and forcing the doctors to change their opinions so that the
claims of the rejected, altering the description of diseases and delaying payouts. The discussion
deals with the assesment of the management and policies of the bank and their violations.

7
SOCIAL RESPONSIBILITY
References
Bank, C., 2014. Sustainability Report 2010. Small Medium Enterprise Development Bank
Malaysia Berhad.
Bartlett, J.L., 2016. Multiple voices shaping CSR meaning and practice
Boersma, M., 2015. How Does Sustainable Banking Add Up?
Gitman, L.J., Juchau, R. and Flanagan, J., 2015. Principles of managerial finance. Pearson
Higher Education AU.
Islam, M.A., Jain, A. and Thomson, D., 2016. Does the global reporting initiative influence
sustainability disclosures in Asia-Pacific banks?. Australasian Journal of Environmental
Management, 23(3), pp.298-313.
Kara, H., 2017. Research Ethics-Ethical Theories.
Newton, M.T., 2017. A Comparison of Ethical Theories.
Rice, M.E., 2017. The ethics of presenting a fair and honest treatment plan. The Journal of the
American Dental Association, 148(4), pp.277-278.
Sivaraman, G. and Turner, P., 2016. The 7-Eleven wages scandal: The need for law
reform. Precedent (Sydney, NSW), (135), p.53.