You are the Chief Risk Officer for NLS plc, a UK-based general insurer. NLS plc underwrites commercial liability risks in the UK and internationally. NLS plc distributes its liability insurance products both directly to policyholders and through delegated authority schemes. These delegated authority schemes have substantial credit periods between when the premium is paid by policyholders and subsequently forwarded to NLS plc. Direct business premiums are either paid annually to NLS plc or are collected through a premium facility that NLS plc outsources to a specialist premium finance company. NLS plc administers all claims within its own claims department, although the nature of the risks underwritten can mean there are many years between a loss occurring and the final loss settlement. NLS plc has an extensive outwards reinsurance programme, with a limited number of reinsurers. Following an increase in bad-debt provisions, the Board of NLS plc has instigated a credit risk review and has asked you to prepare a report on the significant credit risks. Question • Explain briefly, three significant credit risks for NLS plc. • Analyse the potential implications of each of these credit risks for NLS plc. • Recommend with reasons, based on your analysis, one risk minimisation action for each of these credit risks Could we aim for roughly 3520 words.