Forefront UAG 2010 DirectAccess Clients and Repeated OTP Prompts

In a very specific DirectAccess deployment scenario it is possible that users may be prompted repeatedly for One-Time Password (OTP) credentials. Specifically this may occur when you have Windows 7 clients accessing a Forefront UAG 2010 DirectAccess server with two-factor authentication enabled with OTP, along with forced tunneling required and the client configured to use a corporate web proxy server. The root cause of the issue has to do with Network Connectivity Status Indicator (NCSI) probes and security permissions on the private key of the certificate used for OTP authentication. To resolve the issue will require creating a custom certificate template for use with two-factor authentication and setting key permissions for the NETWORK SERVICE on the certificate template. You can also workaround this issue by disabling forced tunneling or disabling the 6to4 and Teredo adapters, which will stop the NCSI probes from occurring. For more detailed information read Microsoft KB article 2797301.