[cabfpub] Ballot 121 (insurance)

i-barreira at izenpe.net i-barreira at izenpe.net
Thu Jun 5 10:49:03 UTC 2014

Hi, inline



Iñigo Barreira
Responsable del Área técnica
i-barreira at izenpe.net




ERNE! Baliteke mezu honen zatiren bat edo mezu osoa legez babestuta egotea. Mezua badu bere hartzailea. Okerreko helbidera heldu bada (helbidea gaizki idatzi, transmisioak huts egin) eman abisu igorleari, korreo honi erantzuna. KONTUZ!
ATENCION! Este mensaje contiene informacion privilegiada o confidencial a la que solo tiene derecho a acceder el destinatario. Si usted lo recibe por error le agradeceriamos que no hiciera uso de la informacion y que se pusiese en contacto con el remitente.


De: Ben Wilson [mailto:ben at digicert.com] 
Enviado el: martes, 03 de junio de 2014 3:43
Para: Barreira Iglesias, Iñigo; md at ssc.lt; kirk_hall at trendmicro.com; gerv at mozilla.org; public at cabforum.org
Asunto: Re: [cabfpub] Ballot 121 (insurance)


Thanks, Moudrick, Kirk and Iñigo,

For those who haven't looked up this ETSI document, Section 7.5 says, "(d) Adequate arrangements to cover liabilities arising from its operations and/or activities; (e) Financial stability and resources required to operate in conformity with this policy; and (f) Policies and procedures for the resolution of complaints and disputes received from customers or other parties about the provisioning of electronic trust services."  This appears to be based, somewhat, on the liability structure set up in Art.6  of of EU Directive 1999/93/EC and subsection (h) of Annex II, http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:31999L0093, the latter of which reads, “(h) maintain sufficient financial resources to operate in conformity with the requirements laid down in the Directive, in particular to bear the risk of liability for damages, for example, by obtaining appropriate insurance;”  


This is also recorded in the new EU regulation, in recital 37 and articles 13 and 24, and indicates the need to be covered by insurances policies but according to national law.

This is to be discussed in the secondary legislation by means of implementing acts for these 2 articles. My idea is to explain more detailed in 2 weeks at Eilat

CAs are supposed to address their responsibility under Art. 6.  This can be written in their CP/CPS either under Section 2.3 (RFC 2527) or Section 9.2 (RFC 3647) -- maybe more explicit requirements in the BRs are needed about what must be written in those sections?  Also, I see that "risk" is noted in Annex II, but not in section 7.5 (too hard to audit?), an insurance or financial stability requirement is a much easier way to address risks to third parties than other methods, and it more fairly distributes the loss potential.  See e.g. http://www.egov.ufsc.br/portal/sites/default/files/anexos/27548-27558-1-PB.pdf  


As an example, Izenpe in its CPS at section 9.2 indicates that has an insurance and the financial resources needed but don´t indicate the amount covered. This is only know by the Ministry (our supervisory body) and the auditors.

According to http://www.law.uni-sofia.bg/Kat/T/IP/T/ES/DocLib/The%20Legal%20and%20Market%20Aspects%20of%20Electronic%20Signatures.pdf <http://www.law.uni-sofia.bg/Kat/T/IP/T/ES/DocLib/The%20Legal%20and%20Market%20Aspects%20of%20Electronic%20Signatures.pdf>  
most EU countries have simply copied this text from Annex II into their own laws without further requirements.  However, some, like Spain, have set forth specific insurance amounts for " Cobertura de seguro u otras garantías para los terceros de buena fe cuando incumpla las obligaciones que impone la Ley 59/2003, de 19 de diciembre, de Firma Electrónica" - from what I can tell, the amount is 3 million Euros.  http://www.boe.es/boe/dias/2003/12/20/pdfs/A45329-45343.pdf 


That´s right. That´s something that all CAs in Spain shall comply to operate in our country, whitout that insurance we are not allowed to work or at least not being qualified and then recognized in the Spanish Trusted List. But, maybe it´s different for other countries.

For the same reason, when Izenpe decided to go after the EV, well, we made a small increase in the insurance, to cover the 5 million $ which is a little bit more of 3,5 million € (depending on the day J )


  So, in order to be more fair to non-US CAs, what about that 3-million-Euro amount instead that just said "third party cyber coverage"?  (I have Betterley's 2014 Cyber Insurance Report that I can use to create a definition of "third party cyber coverage".)   Given the facts above, I can't see any reason to replace our objective rule with something as subjective as "adequate arrangements" or "sufficient financial resources," which are subjective and impossible to audit, let alone eliminate it altogether.


Ok for me.

Financial stability is a key component of being a CA, especially one that issues Extended Validation certificates.  It certainly seems that any European CA wanting to issue the "qualified website" equivalent of an EV certificate will have to meet Art 6 / Annex II requirements in any event.

This is still a nightmare in ETSI

Also, we require insurance for banks and automobile owners/drivers.  Not for first-party coverage, but for third-party coverage--we do not want innocent third parties left holding the bag--it's what economists call "negative externality".   Banks, for example, have great security, but they also have to handle the risk that all of that security won't protect against everything--nothing works perfectly 100%.  Banks are required by regulators to have financial reserves, deposit insurance, and other risk-mitigating processes.  See http://edoc.ub.uni-muenchen.de/5628/1/Mikkonen_Katri.pdf   Under the EU Directive on capital adequacy of investment …firms and credit institutions, this means coverage of EUR 20 000 for each depositor, minimum start-up-capital of EUR 5 million, and then ongoing solvency ratios per Basel requirements.


On 6/2/2014 1:40 AM, i-barreira at izenpe.net wrote:



	The TS 102 042 is the one for EV and BR certs and also indicates in 7.5 what Mou has stated. 

	This “control” was included to let the CA to set the requirements appropriate to its needs and according to national legislation.





	Iñigo Barreira
	Responsable del Área técnica
	i-barreira at izenpe.net




	ERNE! Baliteke mezu honen zatiren bat edo mezu osoa legez babestuta egotea. Mezua badu bere hartzailea. Okerreko helbidera heldu bada (helbidea gaizki idatzi, transmisioak huts egin) eman abisu igorleari, korreo honi erantzuna. KONTUZ!
	ATENCION! Este mensaje contiene informacion privilegiada o confidencial a la que solo tiene derecho a acceder el destinatario. Si usted lo recibe por error le agradeceriamos que no hiciera uso de la informacion y que se pusiese en contacto con el remitente.


	De: public-bounces at cabforum.org [mailto:public-bounces at cabforum.org] En nombre de Moudrick M. Dadashov
	Enviado el: sábado, 31 de mayo de 2014 2:30
	Para: ben at digicert.com; kirk_hall at trendmicro.com; 'Gervase Markham'; 'public >> CABFPub'
	Asunto: Re: [cabfpub] Ballot 121 (insurance)


	On 5/31/2014 2:46 AM, Ben Wilson wrote:

		Do you have a proposal that addresses the concerns about financial

	Please see ETSI TS 101 456 V1.4.3 section 7.5 specifically points d), e) and f) - IMO they are close to what you are looking for.
	As a standardization body ETSI doesn't set its requirements in terms of absolute amounts, this is left to implementers - in this case to MS Governments.
	Given the fact that EVG is incorporated into ETSI "as is", I see potential conflict between the two approaches.  

	-----Original Message-----
	From: kirk_hall at trendmicro.com [mailto:kirk_hall at trendmicro.com] 
	Sent: Friday, May 30, 2014 5:20 PM
	To: ben at digicert.com; 'Gervase Markham'; 'public >> CABFPub'
	Subject: RE: [cabfpub] Ballot 121 (insurance)
	Ben -- as I indicated to the EV Working Group in an email recently, I have
	definitely changed my mind about the EVGL insurance requirement based on my
	own experience in starting AffirmTrust in 2010.  (As a reminder to all,
	AffirmTrust was acquired by Trend Micro in 2011, and Trend is big enough and
	has a strong enough balance sheet and treasury that under the EVGL we are
	entirely exempt from the insurance requirements -- so we have no personal
	stake in this.)  
	While starting my own company, the insurance brokers kept asking me why I
	wanted the insurance coverages -- they clearly didn't think I needed them --
	and they warned me that the E&O coverage in particular probably wasn't going
	to provide me with any meaningful protection for anything (given that it
	generally doesn't cover contractual liability for a bad cert, return of
	fees, etc.)  So it felt like a very big waste of money.
	Plus we now know from eight years of experience (plus the anecdotal evidence
	of Trend Micro's legal counsel from his decade at VeriSign) that there
	simply aren't claims from customers or relying parties for mis-issued certs
	and that the need for insurance (even if it did cover the mis-issuance of EV
	certs) is minimal at best.  The one case of catastrophic failure and breach,
	DigiNotar, apparently resulted in a court ruling that the insurer would be
	allowed to deny all coverage.
	When we collectively were brainstorming in 2005-6 to create the first EV
	Guidelines, we were trying to come up with lots and lots of requirements to
	try to set EV certs apart from other certs.  As I recall, we considered even
	more complex verification steps for EV to make it similar to the closing of
	a major corporate transaction (e.g., getting Board of Directors
	authorizations, Secretary's Certificates, etc.) -- fortunately, common sense
	prevailed and we slimmed down the requirements so they are very thorough,
	but achievable.
	Finally, the Forum has learned through eight years of experience that these
	insurance requirements are even harder and more expensive for
	non-US/Canadian CAs to satisfy, and that their brokers also tell them the
	coverages won't provide them with any meaningful protection.  We don't want
	the EV Guidelines to be weighted in favor of US/Canadian CAs.
	The Forum hasn't hesitated from changing other EVGL requirements when we
	think justified -- such as recently allowing the use of the automatic email
	verification method to upgrade domains to the EV level (using the same
	verification methods as for DV and OV certs).  For the first seven years of
	the EVGL, we were all required to do manual vetting of domains with a WhoIs
	lookup and deal with any mis-match of the registration.
	So for all these reasons, I think Gerv is right and it's time to drop the
	insurance requirements.   Let CAs follow any insurance requirements that
	their applicable local jurisdiction(s) may impose, but otherwise don't
	create an additional insurance requirement through the EV Guidelines.
	Gerv, thanks for sharing your thoughtful and well informed opinion.  It
	really helps.
	-----Original Message-----
	From: public-bounces at cabforum.org [mailto:public-bounces at cabforum.org] On
	Behalf Of Ben Wilson
	Sent: Friday, May 30, 2014 3:15 PM
	To: 'Gervase Markham'; 'public >> CABFPub'
	Subject: Re: [cabfpub] Ballot 121 (insurance)
	Gerv and all,
	If people want to save money, they can stick to issuing DV or OV
	certificates.  EV certificates need to remain different, and this proposed
	move is contrary to the first goal we all agreed upon when we began working
	on the guidelines for issuing Extended Validation Certificates, which my
	notes indicates was to "increase online trust."  
	If the ballot is re-introduced and passes, then CAs will not be required to
	have insurance for any negligence in issuing or maintaining EV Certificates.
	It increases the likelihood that another Diginotar won't be held
	accountable, and I believe the insurance is currently available at
	affordable cost, approximately $10,000 per $1 million coverage.  I have
	attached a sample cyber-insurance policy, which is available in similar form
	from any of top insurers internationally-- Zurich, ING, AIG, AXA, Allianz,
	The reintroduction of Ballot 121 also reopens negotiations of 8 years ago,
	which took place during 2006.  For example, attached is Kirk Hall's memo to
	the group from June 2006 in which he recommends "indemnity insurance
	coverage (e.g. "errors and omissions," "cyber coverage," "network computer
	liability," "professional liability," or other similar coverage) for
	Extended Validation Certificates [in the amount of $10 million]."  
	Opponents of insurance requirements cannot simply erase these historical
	choices without proposing viable alternatives.  (It's always easier to
	complain and to poke holes at things than to work on real solutions.)  And
	finally, if the EV Guidelines do not contain some form of financial
	responsibility, then we might as well delete the Section 7 warranties, and
	the other EV provisions to which they refer, because they will just become
	empty promises.    
	-----Original Message-----
	From: public-bounces at cabforum.org [mailto:public-bounces at cabforum.org] On
	Behalf Of Gervase Markham
	Sent: Friday, May 30, 2014 12:41 PM
	To: public >> CABFPub
	Subject: [cabfpub] Ballot 121 (insurance)
	I talked to our lawyer this morning. Mozilla is now willing to support the
	proposal in Ballot 121 (removal of the insurance requirement from the EV
	We feel that this requirement provides no significant protection in practice
	for either users, for whom CAs can limit liability to $2000 anyway, or for
	browsers, for whom clause 18.2 which indemnifies them is much more relevant.
	We encourage other CAs and browsers to support this ballot also, and let the
	CAs put the $N,000 saved towards making their products better and/or cheaper
	for users.
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