Case Study 3 – Ethics
You are Ms. A, an investigator working with an insurance company.
Recently, a case was forwarded to you for investigation. This case pertains
to an insurance claim of Rs. 2 crores, made with respect to the maturity of a
life insurance policy. The company’s suspicion has been aroused because
only 6 instalments of this policy were paid before the policy holder, a young
and apparently healthy man, died suddenly of cancer.
As you begin the investigation, you realize that the policy was approved by
Mr. B, a senior employee of the company, with whom you share a cordial relation. You meet him personally and he confides in you that the policy was issued in the name of the son of a company peon, Mr. C. You know that Mr. C is a good-natured person, whom everyone at office is fond of. Mr. B
tells you that he knew that Mr. C’s son, the policy holder, was suffering
from cancer. Since Mr. C had to spend a lot on his son’s treatment, his
financial condition soon became precarious. This was when the two
decided to fraudulently book this policy, so that atleast some good would
come out of this tragedy. They bribed the doctor concerned to hide the
details of the disease while filing his clearance report to the company for
the approval of the policy.
Mr. B says that he is proud of what he has done, especially since the
company did not help Mr. C when he was going through such difficult times. He also tells you that the matter is completely in your hands. You can choose to benefit a company which has a 5-lakh crore rupee turnover
or a poor, grieving father who has no financial security left for his family.
In these circumstances:
i) What are the options available to you?
ii) What course of action would you adopt and why?
(250 words- 20 marks)
This is a case of deliberate fraud perpetrated by two employees of the company.
Their understanding of what constitutes a just action is grossly misplaced,
especially since they are old employees of the company. Hence, they must be
The options available to me include:
i) Compromising the investigation and passing the claim.
ii) Rejecting the claim, but advocating leniency for the two employees.
iii) Rejecting the claim, but advocating penalties for Mr. B and the doctor, and
leniency for Mr. C.
iv) Rejecting the claim, and advocating strict penalties for all three.
I would certainly not pass the claim, since this would constitute a dereliction of my
own duties. My decision is based upon the understanding that the amount of
premium charged for an insurance policy is directly correlated to the element of
risk the company bears in issuing the policy. Had the company been informed
about the son’s illness, the premium may have been higher but it certainly would
not have been a case of fraud. Further, there may be many other policy holders
who may be facing even more extenuating tragedies but are not resorting to
similar dishonest tactics. Passing the claim would be a gross injustice to them.
Therefore, I would place the true facts of the case before the concerned
authorities and leave it to them to decide the quantum of punishment and how it
should be awarded. I would especially recommend strict action against Mr B and
the doctor, for a very poor understanding of their duties and a misplaced sense of
compassion. The argument that I have a choice between a rich company and a
poor employee is extremely fallacious because it is only through its financial
corpus that the company can provide succor to its clients- it holds the money not
for any one individual but in the public’s trust that it will be used for their welfare