Glossary

Converted losses is a term used with retrospectively rated insurance programs: ratable losses times a loss conversion factor.

Convertible, in the insurance context, refers to a policy that may be changed to another form without evidence of insurability. It is usually used to convert term life insurance to permanent insurance.

Convertible term life insurance offers the policyholder the option of exchanging the term policy for some form of permanent life insurance without evidence of insurability.

The Cooke ratio is the ratio of commitments (assets weighed by the risk of default) to total assets. It is nNamed for Peter Cooke of the Bank of England. It was first established by the Basel Commission in its 1988 accord.

A cooperation clause is a policy provision compelling the insured to assist an insurer in defending claims under a policy. The rationale behind this provision is that the insured, rather than the insurer, is in a much better position to ascertain certain information about claims that are critical to the defense process.

A cooperative controlled insurance program (CO-CIP) describes a controlled insurance program in which the project owner includes the prime or general contractor in identifying the project risks and designing the program's insurance coverages. This approach allows the project owner to capitalize on the contractor's expertise in managing construction risks and also tends to garner more acceptance of the program because it considers contractor needs. Some CO-CIPs allow the contractor to share in any financial savings generated by the CIP.

Cooperative insurance pertains to fraternal societies, employee associations, industrial associations, trade unions, or other mutual associations.

Coordinated Advertising, Rate and Form Review Authority (CARFA), which was proposed by insurance regulators in 2000, would create a "one-stop" rate- and form-filing process for property-casualty (P&C) insurers in an effort to speed the rate at which products can be brought to market.

Coordination of coverage is the process of reviewing and possibly modifying the scope or nature of coverage provided by an insured's various liability policies to eliminate gaps or overlaps. For example, if an insured has an occurrence-based commercial general liability (CGL) policy and an umbrella policy written with a claims-made trigger, coverage gaps could result. Coordinating coverage in this instance might involve replacing the umbrella policy with an occurrence form.

COPE is an acronym that stands for the four property risk characteristics an underwriter reviews when evaluating a submission for property insurance: construction, occupancy, protection, and exposure. Construction refers to the primary materials and approach used for the structure (e.g., frame, masonry, masonry veneer, superior construction, mixed—masonry/frame). Occupancy is how the building is being used for commercial property and whether it is owner-occupant or renter-occupied for homeowners and the number of families for which the building is designed. Protection refers to the level of fire protection for the property, such as the quality of the responding fire department, including whether it is paid or volunteer, adequacy of water pressure and water supply in the community, distance of the structure to the nearest fire station, quality of the fire hydrant, and the distance of the structure to the nearest hydrant). Exposure evaluates the risks of loss posed by neighboring property or the surrounding area, taking into consideration what is located near the property, such as an office building, a subdivision, or a fireworks factory).