The Importance of Risk Disclosure

C

The disclosure of the nature and extent of interest rate risk, credit risk, reinsurance risk, and other significant risks is required for Actuarial Liabilities.

Actuarial liabilities are the present value of future payments that an insurance company or other entity is expected to make to fulfill its insurance obligations, such as claims on policies, annuities, or pensions. These liabilities are calculated based on actuarial assumptions, such as mortality rates, interest rates, and other relevant factors.

Interest rate risk refers to the risk that fluctuations in interest rates will affect the value of an insurance company's assets and liabilities, which can have an impact on its financial performance. Credit risk refers to the risk that the insurance company will incur losses due to a borrower or counterparty's failure to fulfill its financial obligations. Reinsurance risk refers to the risk that the reinsurer will not fulfill its obligations to the insurance company in the event of a loss.

Because actuarial liabilities are a key part of an insurance company's financial position and are subject to various risks, it is important to disclose the nature and extent of these risks to provide stakeholders with a clear understanding of the company's financial position and performance. This disclosure can help stakeholders make informed decisions about their investment in the company or their decision to do business with the company.

Therefore, the correct answer to the question is C. Actuarial liabilities.