The risk committee of Fidelity Insurance Company operates under a “risk appetite” approved by the full board that allows the company to acquire a portfolio of fixed-rate mortgage-backed securities. As a member of the risk committee, you are convinced that the portfolio does not pose a risk to safety and soundness. The insurance regulator, however, has a different view about the risk posed by un-hedged fixed-rate securities, and communicates that concern in no uncertain terms to the board of directors. Although there is nothing illegal about the company’s investment strategy, it is likely to irritate the regulators unless it is changed. As a member of Fidelity Insurance’s risk committee, how would you evaluate this situation?