In HD Faculty™'s quest to reduce its risk exposure, it has established a dedicated Risk Management Team, which has been mandated to create, manage, monitor, update, create benchmarks, adopt, and implement the most effective risk management policies and prevention procedures in respect to HD Faculty™ and its stakeholders' exposure. The team is require to enable HD Faculty™ to assess risks continuously, to identify the requisite steps to take and resources to be allocated to mitigate risk factors and provide necessary assurances.

The Risk Management Team is permitted, from time to time, to undertake risk tradeoff activities, whereby one type of risk is substituted for another. In the event that HD Faculty™ authorizes a risk-trade-off, when the degree of risk is not reduced by the trade-off, the Team is required to make sure that the mitigation strategy is the one that prompts the trade, especially if certain mitigation tactics may be better performed by HD Faculty™ than others, or vice versa.

The following are examples of permitted risk tradeoffs in respect to HD Faculty™:

• Outsourcing transfers to Canadian Commercial Corporation shifts from operational risk to counterparty and reputation risk, and reduces operational risks.
• In selecting an assurance company to administer HD Faculty™'s H-DISPIV™ product, HD Faculty™ shifts the actuarial and operational risks from HD Faculty™, and as such accepts counterparty and reputation risk. In this instance, the Canadian Commercial Corporation or its equivalent can probably more easily mitigate counterparty and reputation risk in the selection process of HD Faculty™ than it can mitigate actuarial and operations risks in which it may not have any expertise.