[cabfpub] Ballot 133 - Insurance Requirements for EV Issuers

Ryan Sleevi sleevi at google.com
Thu Oct 9 04:03:49 UTC 2014

On Oct 8, 2014 11:56 PM, "Ben Wilson" <ben.wilson at digicert.com> wrote:
> The part you quote me as saying, “to maintain CRL and OCSP
infrastructure,” comes from others who argued for it back in 2005, so it
wasn’t me who said it.

It was the only justification you gave for the original requirements, and
which you quoted specifically in the context of trying to answer why.

What I asked of you in the previous message, and which remains unanswered,
is why you feel insurance is meaningful, since you're ardently defending it

If you don't feel it is (and that would both surprise and please me), then
we should be removing, not reducing.

> Your argument about the current CP/CPS language as the only situation
where insurance comes into play is a convenient strawman that you put up
just to knock down.
> “Who” can make a claim and ”why” is up to you – I don’t know why you’re
asking me.

It's not a straw man, and that isn't an answer.

As we discussed in past calls, why is the ballot simply not to remove it as
a requirement - which you've heard two browsers express support for.

I don't care about the why is this language reducing, because ANY such
requirement presumes insurance is valuable. What I'm asking is why do we
even have it.

Your previous message said "cost of doing business," but failed to express
why such a cost existed. The original justification given - which you
quoted - doesn't hold. The provided explanation "that it protects people",
fails to deal with the very real issue that the set of people it protects
is virtually zero. So it doesn't protect "people" as an abstract, it
protects a near-zero sum population.

So why have it? And who should it be for?

These aren't straw man arguments - these are key to establishing why there
should be any proposal other than "remove it".

> From: Ryan Sleevi [mailto:sleevi at google.com]
> Sent: Wednesday, October 8, 2014 9:44 PM
> To: Ben Wilson
> Cc: CABFPub; Gervase Markham
> Subject: RE: [cabfpub] Ballot 133 - Insurance Requirements for EV Issuers
> Ben,
> No investigation into DigiNotar's insurance is necessary, so I'm shocked
you would think it is. The facts exist that the purpose of insurance, as
you stated (to maintain CRL and OCSP infrastructure) was unnecessary,
because the infrastructure was so thoroughly compromised. NO amount of
insurance can deal with that.
> As such, browsers have systems in place for such complete compromise,
which is equally sufficient for _less_ complete compromises.
> I don't see how you can claim it promotes good security, since its
insufficient for dealing with the things browsers care most about. At best,
it seems to be a tool to try and establish liability - but browser's are
clearly telling CAs that liability exists, insurance or not.
> I can't see how, in the same message, you can suggest "For many
industries, CAs included, insurance is just a cost of doing business" and
then simultaneously assert you're not using insurance as a barrier for
> Let's take a step back. You've talked at extreme length about the
challenges with the current language, the problems CAs face in obtaining
it, etc, but are ignoring the two extremely pertinent and relevant
> It is NOT about "what" and "how much" (which you have devoted great time
to), but about "why" and "for who"? I'm very much challenging your
statements about "why" (and 'just because', which is what 'cost of doing
business' reads as, is not a good answer) and "who"
> Under the current CP/CPS, if someone issues a fraudulent cert for
example.com, example.com can't claim damages. The browser cannot claim
damages. Only the users who visited example.com can claim damages, and only
if they used an application in a configuration that does not exist in the
real world, save for some very baroque and unusable conditions. Even if
there was a "why" that made sense, the "who" is, under current terms,
extremely questionable.
> Let's stop focusing on terminology appendices for the type of insurance,
and focus on first principles. What reasons, beyond OCSP/CRL serving
infrastructure, is it meant to address, and who, in the real world of
applications and Internet browsers and servers, can make a claim?
> On Oct 8, 2014 11:29 PM, "Ben Wilson" <ben.wilson at digicert.com> wrote:
> Whether browser security methods, systems, etc. are good enough remains
to be seen in the long term.  Citing Diginotar is insufficient proof of
failure for the insurance-based risk-mitigation method-- unless you have
investigated and can elaborate on all of the facts and circumstances about
the particular insurance coverage, denial of coverage, etc., and whether
appropriate inquiries for insurance coverage were denied and then
challenged for bad faith denial of coverage.  My argument is that insurance
goes hand-in-hand with promoting good security practices, and along with
compliance audits they establish an integrated risk management strategy.
Browsers will do whatever browsers do, but these three things are within a
CA’s control, and the best place to mitigate risk is always with those who
are in the best position with the ability to do something about it.
> Ballot 133 removes the specifics of that type of liability insurance
requirement because some have said it was too difficult to obtain in areas
with emerging economies—so even if you perceive an insurance requirement as
a mere barrier to entry, that barrier is dropping, and more because there
will only be $3 million in liability coverage required, although some might
argue that $3 million is not enough.  For many industries, CAs included,
insurance is just a cost of doing business, and the new language is
balanced and allows plenty of flexibility, in several different ways,
including an unlimited retention amount.  With CAs I’ve talked to, after a
little research with their broker, they understand better what is available
in the market.  I’ve also been told by brokers that pricing for this type
of coverage is very competitive.   Members can use their search engine of
preference to look for “technology e&o” and to see what is available.  So,
as a practical matter, I don’t see it as any barrier to entry.   I’ve also
uploaded some of my insurance research to the wiki here:
https://cabforum.org/wiki/Insurance .  I think a thorough reading of this
material disproves the claim that this insurance requirement is of
miniscule benefit.
> Moreover, this is not a barrier to entry for entities desiring to become
publicly trusted CAs.  This is a requirement of the Extended Validation
Guidelines, not the Baseline Requirements and not browser root programs.
Browsers are free to allow a CA into their trust stores without any
financial ability, responsibility, or insurance whatsoever--you can still
accept them and rely on browser-based security measures, but Extended
Validation certificates have a known level of quality, which shouldn’t be
devalued or deprecated by encouraging a new race to the bottom.  I am not
saying that insurance is the best answer, but no one has put forward a
serious proposal for financial guarantees, performance bonds, escrow
deposits, or other financial responsibility mechanisms, recently.  I think
I’ve shown sufficient reasoning for amending the financial responsibility /
insurance requirement as one way to force the internalization of risk, and
it’s also an established method used in other areas such as automobile
insurance, commercial products, banking, etc.
> From: Ryan Sleevi [mailto:sleevi at google.com]
> Sent: Wednesday, October 8, 2014 3:34 PM
> To: Ben Wilson
> Cc: Gervase Markham; CABFPub
> Subject: Re: [cabfpub] Ballot 133 - Insurance Requirements for EV Issuers
> On Tue, Oct 7, 2014 at 6:39 PM, Ben Wilson <ben.wilson at digicert.com>
> All,
> Proposed Ballot 133 represents a substantial reduction in the amount of
and a change in the type of insurance that is needed to be qualified as an
issuer of an EV certificate.  This proposal reduces the required coverage
amount to a little over $3 million (counting coverage for property casualty
loss)—less than half of what it is today.  Those arguing against an
insurance requirement have generally centered their arguments on opinions
about whether premiums paid for insurance coverage provide a meaningful
ROI.  So not only does this ballot reduce the coverage amount, but it also
fine-tunes the type of coverage required in order to align better with the
types of risks that we should be concerned about.
> Those involved during the drafting of the EV Guidelines should agree that
EV Certificates represent the highest degree of quality for SSL/TLS
certificate services commercially available in contrast to other types of
SSL/TLS certificate services offered.   The quality of service for EV can
be gauged in several important aspects, detailed in the EV Guidelines.
Those measures include the degree of identity verification performed on the
domain registrant, CA quality controls, CA/subscriber warranties, and
importantly, the financial responsibility of a CA.  Concerning financial
stability, the EV Guidelines require that a CA stand behind each EV
certificate it issues--to an amount of at least $2,000 for monetary loss to
each Subscriber or Relying Party.  This is one of the reasons that the EV
Guidelines have required an EV-issuing CA to be sufficiently able, not just
to maintain ongoing EV certificate operations and maintenance, but also to
ensure that CA warranties and representations do not become empty promises.
> Because requirements were needed to provide assurances to users that a
certain level of recourse would be available in the event that a CA failed
to exercise reasonable care in approving a certificate application,
financial responsibility was a key requirement for the EV Guidelines.  In
2005 and 2006 we debated amounts required for insurance.  At the time, most
CAs felt that $10 million was the maximum, and we settled on the $5 million
and $2 million amounts.  Today, $3 million in insurance coverage is a very
reasonable amount for a CA to carry.
> Since Day 1 of the CA/Browser Forum, insurance has been an important
requirement for EV.  Back in May 2005, GeoTrust proposed that every CA and
auditor have a $10 million professional liability / errors and omissions
insurance policy.  The minutes of the May 2006 meeting indicate, “The chief
purpose of financial stability requirements was to avoid the risk of
catastrophic financial collapse and compromise of the roots and inability
to maintain current OCSPs/CRLs.”  As I’ve mentioned previously, throughout
2006 we discussed the need for insurance and the question was not “if”
there was an insurance requirement, but what it should be.  Finally, in
August 2006 we settled on what is currently Section 8.4 (Insurance
Requirements) and decided that the language chosen at that time was the
most efficient way to ensure the financial responsibility of CAs.  The
proposed language of Ballot 133 does the same thing today as what we
intended the insurance language to do back in August 2006—provide a
backstop that mitigates the risk of catastrophic CA failure.
> And this is where the debate about whether or not insurance provides any
> If a CA is compromised, through hostile act or negligence, there are
several ways in which the infrastructure necessary to maintain current
OCSPs and CRLs can be rendered untrustworthy. DigiNotar is a prime example
of this, in which the misissued certificates were not even known by
DigiNotar, because they were not adequately logged.
> As such, because this risk exists in the system (and recall that they
were indeed audited), Relying Parties MUST accept that OCSP/CRLs are
INSUFFICIENT to deal with the risk of compromise or collapse.
> As such, browsers have developed programs to deal with this out of band.
CRLSets. OneCRL. Certificate Distrust Lists.
> If such systems are good enough for the catastrophic failures where the
OCSP/CRL system is rendered unreliable, why are they not good enough for
the failures when the OCSP/CRL system is still viewed as "reliable" (or at
least, in which the signing keys have not been compromised?)
> Between the RP agreements in most CP/CPSes, and the language itself
regarding the practices, you've heard from several browsers that have,
under advice, been given the opinion that such insurance does not provide
meaningful recourse for them.
> To this end, why does it make sense to enforce a requirement that is not
technically fit for purpose (as demonstrated by DigiNotar), nor actionable
(as advised by counsel), but which encumbers members?
> I can certainly understand that some CAs would prefer a "cost of doing
business" be imposed on new entrants. However, that's of dubious nature.
> I can certainly understand a desire to prevent "fly by night" operators.
But that's incumbent upon the root store programs, and you've heard from at
least two that believe this doesn't meaningfully prevent such "fly by
> So while it's great to understand why the Forum introduced it, what we do
know is that it's failed to meet the Forum's goals. So why should we
pretend it does? Simply for historic reasons?
>> Why do we have an EV insurance requirement?  An effective information
security risk management program consists of risk avoidance, risk
reduction, risk spreading, risk transfer, and risk acceptance.  There is no
such thing as 100% perfect information security, so risk will remain with
any system, even after applying industry best-practice controls that aim to
avoid, reduce, or spread risk.  With unmitigated risks present in any CA
system, the remaining options are (1) transfer risk or (2) accept risk.
 CA/Browser Forum members should still be concerned about an unjustified
acceptance of risk by a “fly-by-night” CA that simply treats residual risk
as its own “risk of doing business” without regard to the negative
consequences to third parties.  Thus, the “transfer of risk” approach has
been adopted with this insurance requirement.  Contemporaneously with the
Forum’s adoption of the insurance provision,  an exception was added for
any CA that was essentially self-insured because it had “five hundred
million US dollars in liquid assets” – that was the bar that was set for
CAs choosing strictly the risk-acceptance approach.  (Actually, this
provision should have stated “five hundred million US dollars in current
assets” which is the correct terminology for calculating a quick ration,
but that error also is proposed for correction in this Ballot 133.)   CAs
who prefer a risk-acceptance approach can still have a hybrid with the
insurance-based “transfer of risk” approach and “hedge their bets” by
increasing the “retention amount” when negotiating the price of insurance
with $3 million coverage.  A retention amount is like a deductible—it is
the amount of risk that is retained by the CA.  So, because the EV
Guidelines do not limit risk-retention amounts, there is plenty of
flexibility for any CA in obtaining the coverage required by the proposed
>> Again, insurance goes hand-in-hand with security controls and the
guidelines of the CA/Browser Forum—by following and being audited to
standards, CAs are in the best position to control risks and because of
this, insurers should be willing to insure the residual risk because the
CA’s loss will be occasioned by chance-- not due to the carelessness or
indifference about maintaining CA system security.
>> Ballot 133 is in response to requests of CAs which have been:
>> 1-      These types of insurance are too difficult to obtain in my
>> 2-      Insurance is too expensive
>> 3-      The current insurance requirement does not cover anticipated
>> As a result, I have researched insurance and interviewed insurance
company representatives on changes to the language that would be best,
based on the situations that we face as CAs and Browsers concerned about
the utility and reliability of SSL certificates.   The feedback has been
that it is not easy to phrase a global standard because of the differences
in legal systems and insurance environments around the globe.  Conversely,
we know that the Internet is global in reach, and a CA located in one
country can affect the lives of persons globally.    Another challenge has
been that if the policy wording is switched from the current language to
something else it will be too difficult to change policies mid-term.  The
proposal that offered transition dates was too confusing, which lead to the
approach taken here, which was to make compliance easier, although there
still might be questions on whether certain types of coverage or policies
meet the proposed requirement.  Also, some CAs have indicated that they are
shopping in the insurance market right now, and they need to know what
coverage will be appropriate.  This is another reason why this ballot
should go forward and be voted upon.
>> As additional background, Commercial General Liability (CGL) insurance
was named in Section 8.4 because it was a type of insurance well-known in
the U.S. that would cover all common types of insurance that an operating
business would need, and which a CA’s business partners would expect it to
have.  It includes property and casualty losses and public liability
coverage for personal/bodily/physical injuries and/or property damage to
the public for claims arising out of operations.  However, over the last
several years court cases have held that it doesn’t cover certain types of
damage to intangibles, unless the language in the policy is specific that
it does.  So even though many CAs will still maintain CGL coverage, it is
no longer worth having as an EV requirement.
>> Another response to opponents of an insurance requirement is that for
centuries insurance has served as a global mechanism to re-distribute risk
associated with global commerce.  If the right insurance is selected, and
if the CA makes good faith efforts to follow common industry security
practices, it is unlikely that an insurer will deny coverage, provided that
the type of peril is acknowledged in the insurance policy, which is why
Ballot 133 makes clear that the policy must not exclude coverage when
providing cryptographic, digital signature, or public key infrastructure
services.  Insurance companies have over $25 trillion in assets under
management; in the case of claims against a CA with clear liability and
catastrophic loss, it is likely that the insurer would rather tender the
policy limits than defend the case.  The argument that the insurance
requirement will not prevent a CA from closing up shop and disappearing
during the night runs contrary to the good will that a CA intending to stay
in operation should seek to engender.  A CA worth its salt will maintain a
certain level of insurance, and third parties relying on the services of
the CA should have assurance that it will.  Also, in the event of
bankruptcy, receivership, or whatever, the insurance will either be an
asset of the estate or the bankruptcy court can abstain and a direct
obligation of the insurer and liability can be established in court, see
Landry v. Exxon Pipeline Co., 260 B.R. 769 (Bkrtcy.M.D.La. 2001), or an
interpleader/adversary proceeding could take place as the trustee, judge,
or administrator determines how proceeds are distributed--whether claims
are paid pro rata, on a first-come basis, or for damage mitigation, e.g. to
ensure that the CA “fails gracefully.”
>> I could go on with my discourse, but I’ll spare you the trouble … unless
anyone wants to consider additional resources, which I’m happy to provide.
>> For additional benefit, here is an overview of some insurance terms:
>> Property insurance – Covers damage to physical property
>> Liability Insurance – Protects against third party claims, i.e., payment
is not typically made to the insured, but rather to someone suffering loss
who is not a party to the insurance contract and it usually does not cover
damage caused intentionally or agreed to by contract (the latter requires
contractual liability insurance)
>> Casualty insurance -- Covers injuries resulting solely from an
inevitable accident and not from negligence, something that cannot be
foreseen or guarded against.
>> Commercial General Liability insurance – “covers bodily injury and
property damage arising out of premises, operations, products, and
completed operations; and advertising and personal injury liability”
(evolved from “general liability” and “corporate general liability” forms
and is what has been common in the United States for most businesses for
the past 30+ years).
>> Technology E&O insurance - covers both liability and property loss
exposures . Liability part covers losses resulting from: (a) technology
services, (b) technology products, (c) media content, and (d) network
security breaches. Property part covers damage mitigation related to
extortion threats, crisis management expenses, and business interruption.
>> -----Original Message-----
>> From: Gervase Markham [mailto:gerv at mozilla.org]
>> Sent: Friday, October 3, 2014 4:07 AM
>> To: Ryan Sleevi; Ben Wilson
>> Cc: CABFPub
>> Subject: Re: [cabfpub] Ballot 133 - Insurance Requirements for EV Issuers
>> On 02/10/14 20:47, Ryan Sleevi wrote:
>> > It's likely we'd abstain from such a ballot as presented, or support
>> > such a ballot that removed the requirement.
>> This is likely to be our position also. /Pace/ Ben, but we maintain
based on legal advice that this particular insurance requirement (not the
concept of insurance in general!) is extremely unlikely to lead to
practical benefit for anyone. Its presence either has no effect (if CAs are
required to have the insurances already by other bodies) or leads to
increased and unnecessary costs for CAs (if they are not).
>> Gerv
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