Glossary

Community property is a law (which applies in only a minority of states) stipulating that at the time of divorce, spouses are each entitled to one-half of the total earnings and property acquired during marriage.

Community rating refers to rating based on the experience of a community in which the insureds reside, with reference to age, sex, occupation, or health.

A community rating system (CRS) is a voluntary program for the National Flood Insurance Program's (NFIP's) participating communities. The purpose of the CRS is to promote the awareness of flood insurance, mitigate flood losses, and facilitate accurate insurance rating. A chief way in which the CRS mitigates losses is to provide incentives (i.e., premium discounts) for communities to extend beyond the minimum floodplain management requirements by developing extra measures to provide protection from flooding. For a community to qualify for the CRS, it must be in full compliance with all aspects of the NFIP.

Commutation usually refers to the cancellation or dissolution of a reinsurance contract in which there are profits or losses to be allocated.

A commutation agreement is an agreement between a ceding insurer and the reinsurer that provides for the valuation, payment, and complete discharge of all obligations between the parties under a particular reinsurance contract.

A commutation clause is a provision in a reinsurance agreement that allows for payment of cash by one party to release the other from all future obligations to pay claims after a certain time period. Common in long-term disability (LTD) insurance, where the reinsurer wishes to settle and discharge all future obligations for claims that have a very long payment pattern. It is also used in finite risk reinsurance.

Commutation rights refer to the right of a beneficiary to receive a lump sum payment rather than continuing under an installment option selected for settlement of a life insurance policy.

Comparative negligence is a rule used in negligence cases in some states that provides for computing both the plaintiff's and the defendant's negligence, with the plaintiff's damages being reduced by a percentage representing the degree of their contributing fault. If the plaintiff's negligence is found to be greater than the defendant's, the plaintiff will receive nothing.

Compensable means an injury or illness that meets the statutory standard and qualifies an employee to receive workers compensation benefits.

Compensated intercorporate hauling (CIH) describes a private motor carrier hauling freight for other members of its corporate family under the same corporate ownership.