The Rain Maker Novel by John Grisham - Movie Review Example

I. Review the conduct of health insurance policy fraud in the “Rainmaker” The fraud that was committed by the company “Great Company” in the novel by John Grisham with a movie adaptation “Rain Maker” was deliberate and planned. Great Benefit right from the start has already the intention to renege and not to fulfill its obligation to its policy holders. It instructed its employees to deny all the claims made by the policyholders regardless if those claim are valid or not. Worst, this instruction was made explicit because it was even included in the company’s policy manual. In effect, the employees are obligated by Great Benefit to follow an immoral and fraudulent company policy it otherwise they will be charge for insubordination. This immoral and illegal policy of Great Benefits against its policyholders eventually took its toll when one of its policyholders died when Great Benefits denied the coverage of bone marrow transplant which could have saved his life. This resulted for Rudy Baylor to file a lawsuit against the company. In addition to this already immoral and fraudulent policy of Great Benefits, it also showed no sense of business ethic when it still kept on accepting new policy holders despite its inability to keep its obligation of coverage to its clients. The company is already incurring massive debts and its strategy of accepting more clients to keep the company afloat showed business callousness because Great Benefits never intended to cover them in case they will file for claim. In effect, Great Benefits is toying with its policyholders fate just to keep its business afloat. II. What policies and procedures that you will devise that would allow ethical conduct to be fairly reviewed, evaluated, with application to all employees’, including management?  Great Benefits insurance did not incorporate itself as an insurance company to deliberately defraud its policy holders. For sure, just like any other companies, it must had some lofty ideals to serve its policyholders only that certain circumstances forced it to chose course of business actions that are not only deemed immoral, but illegal as well. What happened to Great Benefits was that it did not have enough capital reserve to cover the claims of its policyholders. It was burdened with debt that made its financial position to settle obligations precarious. Instead of making a loan to increase its capital reserve, Great Benefits opted to take the easier alternative, albeit immoral and illegal, to take in more policyholders to keep itself afloat financially. The first policy that I will devise is how to avoid such unethical, immoral and illegal act from ever happening again. I issue a policy that for a certain number of policyholders, there should be a corresponding capital reserve that can be withdrawn from just in case there is a claim against clients insurance. If the current capital reserve can no longer cover additional policyholders, the company should make a moral decision not to accept any more clients until it has the corresponding capital to cover it. This will guarantee that Great Insurance will operate as a business with integrity that it can keep its promise when circumstances ask it to do so. Further, I will also avail of reinsurance to those policies that are insured in Great Benefits. This will further shield the policyholders from the insolvency of the company and to ensure that the company can keep its promise to its policyholders whatever the circumstances are. This will work in case of “worst case scenario” when majority of the policy holders will make their claims against their policy to the point that it will render Great Benefits insolvent. But still, there is another insurance company who can pay them in case Great Benefit will be unable to do so. Second, I will remove the “all claims denial policy” in the operations manual and educate all employees that such policy is immoral and illegal. I will devise a series of workshops educating the employees on the good business practice of an insurance company. To ensure that all employees know what the ethical practices of an insurance company, a review will be integrated in their performance appraisals. This review will be implemented to everybody including the management. The review can come in a form of a quiz to brush up the knowledge of employees and management about the ethical practice of an insurance company. Further, to ensure that everybody will take the review seriously, this will become a significant part of their performance review. To reinforce compliance, rewards will be given to those who will perform well in the review. This will reinforce a culture that good behaviors will be rewarded while unethical practices will not be tolerated. Lastly, I will issue a memo of “zero tolerance” against fraud. This applies to everybody without any exception. Any employee or officer who has been found guilty of fraud in the company in any form shall be summarily dismissed. This policy will serve as a preventive measure for any employee or officer to commit fraud. III. Write what improvements and changes you would make to your ethical corporate evaluation process. For a company to adopt a policy of “non-approval of claims” on all its policyholders meant that there is something very wrong in the ethical procedure of the company. Thus, it needs to be improved and overhauled to start a culture of being a business with a strong sense of integrity and ethical sense. There will be two sets of policy improvements that I will implement in the Great Benefits company. First, would be for the employees, second, for the management. For the management and officers, I will clearly stipulate that management and its officer will be responsible should the capital reserve falls below the requirement of a certain number of policy holders. This will form part of their performance appraisal and if found that the neglect was deliberate, applicable criminal charges will be filed. This will send the message to the management and officers of Great Benefits of a new policy of “zero tolerance” against fraud. Second, integrity and ethical audit will be enforced on all employees. This will include the management and officers without exemption. A series of workshops will be made before an integrity and ethical audit will be made. This is to ensure that the employees are provided with the necessary information and knowledge to determine what is right and wrong, what is ethical and unethical and what is the good business practice in an insurance industry. This knowledge will be reinforced by performance evaluation tools where it will become an integral part of appraisal. Employees and officers has to take the integrity and ethical audit if they want to score well in their appraisals. Employees who will fail in the ethical and integrity audit will be given a warning and will be sent for a brush up workshop. This is to ensure that the employee is reminded of what was remissed in his or her integrity and ethical audit. If the the same employee will fail again, he or she will be put on probation. Repetition of failure in the integirty and ethical audit can cause an employee to be dismissed from the company. To reinforce positive conformance, employees and officers who performs well in the audit will be given tokens of rewards. Lastly, part of employees workshops will be their rights against management enforcement of illegal policies. For the new hires, they will be oriented of their rights on how to protect themselves from the illegal orders of the management. So as not to have an excuse that employees have forgotten it, such orientation of their rights against illegal policies shall be included in their employees manual. It will be explicitly written that under 18 USC section 1514A “individuals who work for publicly traded companies are protected from discriminatory acts by their employers, or any officer, employee, contractor, subcontractor, or agent of the company for providing information, causing information to be provided, or assisting in an investigation by a federal regulatory or law enforcement agency, a member or committee of Congress, or an employee’s supervisor. Individuals who file, or cause to be filed, participate, or assist in a proceeding relating to an alleged violation of mail fraud, wire fraud, bank fraud, securities fraud, or violation of SEC rules or regulations are also protected”. This will tell employees that they are protected by law if they will not follow any illegal directives of the management. For the management, this will keep them on their toes and will serve as a deterrent for them not even to attempt to issue illegal and immoral policies such as “denying all claims” whatever the circumstances. They would know that their employees are already aware of what is right and wrong not to mention that they know they are protected by law not to follow it. Having all these procedures integrated in the evaluation process of Great Benefit, it will remove the fraudulent mentality and culture of its previous management. It will create an atmosphere that is not tolerant to fraud and will reinforce behavior that is consistent with ethics and integrity. As a business, Great Benefit will be able to recover if it will operate with integrity because lawyers like Rudy Baylor will no longer have a cause to file a case against the company. The public will also know that the company has the resources to make good on its promise to settle all claims made against policies issued by the company. This will spawn confidence among the general public which will translate to increased clientele ultimately leading to profitability obtained from good business practice. IV. Ethical issues in Wall Street Journal and its applicability in the Rainmaker case a. Providing false information – Kenneth Lay, the jailed CEO of Enron Corp., gave false information to the various stakeholders of his company just to keep its stock price high. He told that Enron was “one of the strongest companies in the country” when in fact it was not and already losing money. Application to the Rainmaker case: Great Benefits can be compared to Enron in a way that it was not truthful about its financial capacity to its policyholders. Great Benefits, just like Enron, projected stability and kept on accepting insurance premiums even if it was already bleeding financially. b. Lying and obstruction of justice – this was best exemplified by Martha Stewart of Omnimedia who lied why she sold her ImClone Systems stocks when in fact she did inside trading and even convicted to it. Her lying in effect obstructed justice because she did not provide information that would allow prosecutors to determine the magnitude of inside trading. Application to the Rainmaker case: In the same way that Martha Stewart lied to the prosecutors, Great Benefits insurance also lied to its policyholders when it provided a contract that says it will cover certain procedures such as bone marrow transplant when in fact, it does not have the intention to do so. The implication was disastrous and caused the life of one its policy holders because it was denied of the bone marrow transplant which could have saved his life. c. Fraud – Worldcom exemplified it that every time I did a research about corporate fraud, Worldcom comes on top of the list. Worldcom window dressed its financial statements to hide its declining profit. Application to Rainmaker case: When Great Benefits issued a policy to deny all policies regardless if it is a valid claim or not, it already intended to defraud its policyholders. Moreso, the act of issuing a policy to explicitly direct employees not to pay any claims is also fraud. This made the case worst because in effect, Great Benefits is enforcing its immoral and illegal policies to its employees that if they will not conform to it, they can be charged for insubordination because it is in their policy manual. Read More