" ITREALMS: No more registrar insurance says ICANN

Saturday, October 03, 2015

No more registrar insurance says ICANN

The Board of Directors of the Internet Corporation for Assigned Names and Numbers (ICANN) has approved a waiver for the registrar’s insurance requirement in the accreditation process of the global domain names, reports ITRealms.

This, industry analysts said has become an unnecessary barrier to registrar accreditation globally and likely to bring about reduction in cost of doing business in the domain name industry.

ITRealms recalls that 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, while in some countries it varies but not less than $200 on average.

The board decision is coming in the wake of an 18-month research, analysis and community consultation, to determine 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 waives this requirement in all RAAs, effective immediately.

ICANN also notes that CGL insurance policies, for instance, generally only cover certain incidents that occur on a company's premises, as 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, ICANN said that was considered include 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,” ICANN said in blog post to this effect.

Additionally, ICANN cited another instance with Nigeria, saying that a community member, Mr. Lawrence Olawale-Roberts, had noted that under Nigerian Local Content law businesses headquartered in that country are required to purchase insurance coverage from Nigerian companies at a substantial premium.

And 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.


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