ICANN Waives Registrar Insurance Requirement, Levels Playing Field for Registrars Globally
A resolution recently approved by the ICANN Board of Directors will promote enhanced gTLD registrar competition in the global domain name marketplace by removing an unnecessary barrier to registrar accreditation. Since 1999, the Registrar Accreditation Agreement (RAA) has required that registrars maintain Commercial General Liability (CGL) insurance policies with policy limits of at least US$ 500,000. Following 18 months of research, analysis and community consultation, the Board determined that this type of insurance may not serve its intended purpose of protecting registrants, and, in fact, may have inhibited the ability of prospective registrars to become accredited in some regions. Accordingly, on 28 September 2015 ICANN's board resolved that ICANN waive this requirement in all RAAs, effective immediately.
CGL insurance policies generally only cover certain incidents that occur on a company's premises. Examples of qualifying events may include a customer that is injured in an accident on the premises or an incident that occurs due to an employee's actions. While this coverage is useful for these types of incidents, it would not cover registrars' potentially wrongful acts, such as failure to renew a domain name.
Another factor that was considered was the availability and cost of CGL insurance globally. While it is common and readily available in some regions, it is more difficult to find—if available at all—and significantly more expensive in many other regions, including parts of South America and Africa.
For example, a community member from Nigeria reported in a recent forum of public comments that under Nigerian law businesses headquartered in that country are required to purchase insurance coverage from Nigerian companies at a substantial premium. Using the US dollar-to-Naira exchange rate at that time, the ICANN-required policy limit was roughly 156.7 times the 2014 Nigerian GDP per capita or the total income of the country divided by the number of inhabitants, giving a rough estimate of the average individual income. By contrast, the CGL policy limit was approximately 9.2 times the USD GDP per capita in the United States (GDP data from the World Bank).
At the Board's direction, staff will begin notifying registrars of the waiver. The Board also requested that the GNSO Council consider whether to undertake policy work on a substitute RAA insurance requirement.
For more information about the impact of this decision on prospective and existing registrars and the broader internet community, see ICANN's RAA Insurance Waiver FAQs.