Canadian Institute of Actuaries Casualty Actuarial Society JOINT RISK MANAGEMENT SECTION Society of Actuaries ISSUE 24 MARCH 2012 EDITOR’s NOTE 3 Letter from the Editors By Ross Bowen and Pierre Tournier CHAIRPERson’s CORNER 4 How Is Your Risk Appetite These Days? By Stuart Wason RISK IDENTIFICATION 5 The Financial Crisis: Why Won’t We Use the F-(raud) Word? By Louise Francis 8 Who Dares Oppose a Boom? By David Merkel RISK QUANTIFICATION 12 Credit Crisis Lessons for Modelers By Parr Schoolman RISK RESPONSE 14 Five Factors That Courts Consider When Deciding Whether to Enforce Limitation of Liability Provisions in Professional Service Agreements By Joshua D. Maggard, Esq. RISK CULTURE AND DISCLOSURES 19 Insurance Companies’ Highly Controlled Use of Derivatives Has Also Resulted in Protection from the Rogue Trader Problem By Ed Toy 28 Perfect Sunrise: A Warning before the Perfect Storm By Max J. Rudolph Issue Number 24 • MARCH 2012` Published by the Joint Risk Management Section Council of Canadian Institute of Actuaries, Casualty Actuarial Society and Society of Actuaries. Canadian Institute of Actuaries 2012 SECTION LEADERSHIP Casualty Actuarial Society JOINT RISK MANAGEMENT SECTION Society of Actuaries Newsletter Editors Ross Bowen e:
[email protected] ARTICLES NEEDED FOR RISK MANAGEMENT Pierre Tournier e:
[email protected] Officers Your help and participation is needed and Please send an electronic copy of the article to: Stuart F. Wason, FSA,CERA, FCIA, MAAA, welcomed. All articles will include a byline to HONFIA, Chairperson Stephen P. Lowe, FCAS, ASA, CERA, MAAA, give you full credit for your effort. If you would Ross Bowen, FSA, MAAA Vice Chairperson like to submit an article, please contact Ross Allianz Life Insurance Co.