@p79146z62
Do providers require KYC for high-coverage policies?
It is likely that providers would require some form of Know-Your-Customer (KYC) or proof-of-entity for very high-coverage policies. The reasons are twofold:
Sybil Risk: Without KYC, a malicious actor could create thousands of anonymous identities, take out large insurance policies, and then intentionally get slashed in a coordinated attack to drain the insurance fund.
Underwriting and Legal Recourse: For policies covering millions in value, the insurer needs to verify the operator's legal identity and operational legitimacy for accurate risk assessment. While against the permissionless ethos of DeFi, this is a pragmatic necessity for managing extreme liability. Lower-tier coverage for the masses would likely remain permissionless, creating a two-tiered insurance market.
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