As part of its Underserved Regions initiative, ICANN has been exploring potential changes to the insurance requirements for registrar accreditation. ICANN seeks your input to determine how best to address potential changes to or elimination of these requirements.
Section I: Description and Explanation
As part of its Underserved Regions initiative, ICANN has been exploring potential changes to the insurance requirements for registrar accreditation.1 ICANN seeks your input to determine how best to address potential changes to or elimination of these requirements.
1 More information about the Underserved Regions Outreach Project available at https://www.icann.org/public-comments/dns-underserved-2014-05-14-en and https://community.icann.org/x/HsLhAg.
Section II: Background
ICANN's Statement of Registrar Accreditation Policy (the "Accreditation Policy"), adopted by ICANN in 1999, establishes the minimum requirements ICANN must consider when approving applications for registrar accreditation. Among its many requirements, the Accreditation Policy provides that registrars must have and maintain commercial general liability ("CGL") insurance policies. The insurance requirement is intended "to provide domain-name holders with reasonable compensation for losses caused by [a registrar's] wrongful . . . acts." The Accreditation Policy requires CGL policy limits of at least US$500,000, or a lesser amount if the registrar can demonstrate to ICANN that a lower limit would still provide for reasonable compensation in the event of a covered loss. The 2013 and 2009 Registrar Accreditation Agreements ("RAAs") require that registrars maintain coverage at the $500,000 level (without reference to the Accreditation Policy's potentially lower limits).
Through the Underserved Regions project work, community members reported that these requirements can be difficult or impossible to meet in many jurisdictions, particularly in jurisdictions outside North America and Europe. Some people commented that CGL insurance is not available at all in some countries and, although available in other countries, the $500,000 limit might be excessive (and therefore commercially infeasible), relative to market conditions, the cost of living, and the risks of doing business in the respective region. At least one prospective registrar has abandoned efforts [PDF 369 KB] to seek accreditation due to its inability to obtain the required insurance. In addition, some commenters questioned [PDF, 110 KB] whether the requirement remains necessary given institutional improvements in other areas, such as compliance and data escrow. At a minimum, community members asked ICANN to provide new and existing registrars with a list of insurers who are known to serve existing registrar businesses [PDF, 122 KB] so that all registrars can secure the insurance required to gain ICANN accreditation.
ICANN staff consulted a number of resources including insurance industry experts with experience in the technology sector. Insurance industry experts told ICANN that today's CGL policies do not generally provide substantial protection for domain name holders for losses caused by their registrars, as envisioned by the Accreditation Policy. CGL insurance policies generally protect businesses against liability claims for bodily injury and property damage that occur on their premises, as well as for advertising and personal injury liability in some cases. However, most CGL policies would exclude coverage for errors and omissions by the registrar. In other words, domain name holders generally would not be able to receive compensation from an insurance company (under a CGL policy) for negligent acts by the registrar, such as accidentally deleting or failing to renew a registration, or allowing a domain name to be hijacked. Also relevant to this analysis, ICANN notes that some legacy registries that once had a similar insurance requirement in their Registry-Registrar Agreements have since abandoned it.
As a result, ICANN is considering whether it should eliminate, reduce, or otherwise modify the current insurance requirement in the 2009 and 2013 RAAs. ICANN seeks your input on the following questions:
- Are there valid reasons why ICANN should continue to require CGL insurance?
- Has any registrar or gTLD or ccTLD registry found CGL coverage useful in running their businesses?
- Are there alternatives to CGL insurance that would provide similar or better protections for registrants that could be instituted either as new contractual requirements or as "best practice" recommendations?
- If the CGL requirement is maintained, is the $500,000 limit appropriate?
- If ICANN eliminates the CGL requirement, should the elimination apply to all registrars or should "waivers" be granted only on a case-by-case basis?
Comments must be submitted no later than 13 March 2015.
ICANN staff will proceed after it has considered all community input submitted through this public comment forum.
Potential outcomes include:
- ICANN could maintain the existing CGL requirement as written in the current forms of the RAA.
- ICANN could eliminate the CGL requirement across-the-board for all registrars.
- ICANN could issue "waivers" on a case-by-case basis upon a registrar's demonstration that it has adequate risk mitigation measures in place, such as an alternative type of insurance.
- ICANN could offer "partial waivers," lowering the $500,000 limit for registrars who can demonstrate the adequacy of a lower limit.
- ICANN could work to organize a recommended or required group insurance policy that would be available to all registrars, regardless of the registrar's location.
In addition to its consideration of the RAA's CGL insurance requirement, ICANN staff is also exploring best practices for registrars that would help protect domain name holders, registrars, and other stakeholders from the most common risks associated with registrar operation.
Section III: Relevant Resources
Section IV: Additional Information
For additional information about ICANN's Underserved Regions initiative, please visit the community wiki at https://community.icann.org/x/hhPxAg.
As part of this project, ICANN has (a) published improved registrar accreditation application materials2; (b) updated its procedures for evaluating prospective registrars' liquid working capital3; and (c) improved collaboration among ICANN departments on outreach in underserved regions, with the goal of ensuring that outreach events provide opportunities for businesses to engage with subject matter experts on topics of interest.
Next steps for the initiative are likely to include additional enhanced outreach efforts by ICANN; ICANN collaboration with the broader community to gain a better understanding of challenges faced by domain name industry businesses in regions with low levels of registrars, registries, and market activity; and further study into market challenges.
Additional information and calls for community input will be posted on the community wiki and, in some cases, ICANN.org, as the Underserved Regions initiative proceeds.