Brett,
Note that the Israeli rules (like many other domain arbitration rules aside from the UDRP) does not require that the domain be registered in bad faith -- registration *or* use is all the complainant needs to prove.
Also... bad faith can include a disregard for the possible rights of others. Lets say a hypothetical person registered AIG.xxx and said "I never heard of anyone using that trademark," ... well, we might be able to believe them -- if we were smoking crack, or if we were a panelist who makes a business model out of being gullible (Sorkin or Cabell). But, anyone else would know that they were full of it.
However, lets say that we believe them. On Nov. 1, registrant has no knowledge of AIG insurance, but registers AIG.xxx.
On Nov. 15, registrant sets up PPC site that starts keying to insurance ads.
On Dec. 1, registrant sees payouts as a result. Registrant goes to his own domain and sees insurance ads. Registrant then figures out that AIG must be an insurance company.
Under the "actual knowledge only" standard, that registrant will have carte blanche to continue to infringe on AIG's rights since he was careless in the beginning.
On the other hand, registrants shouldn't need to be psychic. Nevertheless, absent some acceptance of the constructive knowledge standard, only the "bad domainers" would benefit.