What changed in this filing

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Item 1A. Risk Factors

2025-12-12 compared with 2024-12-17 · 537 added, 465 removed, 1014 unchanged (50% of the section changed)

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is unknown and they may not be sufficient to address the market dislocations or avert severe and prolonged reductions in economic activity.

outside of our control, including terrorist attacks, acts of war, natural disasters or public health crises, could negatively affect

the portfolio companies in which we invest and make the valuation of those investments more uncertain.

outside of our control, including terrorist attacks, acts of war, natural disasters, significant tariffs or public health crises, could

negatively affect the portfolio companies in which we invest and make the valuation of those investments more uncertain.

of market volatility have occurred and could continue to occur in response to pandemics or other events outside of our control, including

terrorist attacks, acts of war, natural disasters, public health crises or similar events.

These types of events have adversely affected

and could continue to adversely affect operating results for us and for our portfolio companies.

terrorist attacks, acts of war, natural disasters, significant tariffs, public health crises or similar events.

These types of events

have adversely affected and could continue to adversely affect operating results for us and for our portfolio companies.

large-scale invasion of Ukraine by Russia in February 2022 resulted in sanctions and market disruptions, including declines in regional

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risk of inflation, and limited access to investments in certain international markets and/or issuers.

In addition, the current conflict

in the Middle East and terrorist acts may cause significant volatility in the markets and/or market disruptions.

In addition, the conflicts in the

Middle East and terrorist acts may cause significant volatility in the markets and/or market disruptions.

extent and duration of these military actions, conflicts and resulting market disruptions are impossible to predict, but have been and

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of our portfolio.

negotiations and related government actions may create regulatory uncertainty for our portfolio companies and our investment strategies

and adversely affect the profitability of portfolio companies.

government has indicated its intent to alter its approach to international trade policy and in some cases to renegotiate, or

potentially terminate, certain existing bilateral or multi-lateral trade agreements and treaties with foreign countries, and has made

proposals and taken actions related thereto, and has proposed and/or taken actions to increase tariffs or other duties on goods or products

being imported into the U.S.

For example, the U.S.

government has imposed, and may in the future increase, tariffs on certain foreign

goods, including from China, such as steel and aluminum.

Some foreign governments, including China, have instituted retaliatory tariffs

on certain U.S.

Recently, the current U.S.

presidential administration has proposed and/or imposed significant increases to tariffs

on goods imported into the U.S., including from China, Canada, and Mexico.

We cannot predict how or what tariffs will be imposed or what

retaliatory measures other countries, including China, may take in response to tariffs proposed or imposed by the U.S.

Such uncertainty

and/or tariffs or counter-measures could further increase costs, decrease margins, reduce the competitiveness of products and services

offered by current and future portfolio companies and adversely affect the revenues and profitability of portfolio companies whose businesses

rely on imported goods.

There is uncertainty as to further actions that may be taken under the current U.S.

presidential administration

with respect to U.S.

trade policy, including with respect to the proposed tariffs.

Further governmental actions related to the imposition

of tariffs or other trade barriers, or changes to international trade agreements or policies, could create further regulatory uncertainty

for our portfolio companies and adversely affect their businesses and financial condition, particularly to the extent the revenues and

profitability of their businesses rely on goods imported from outside of the United States.

Policies, Changes in Laws, and International Trade.

regulatory activity, especially that of the Board of Governors of the U.S.

Federal Reserve System, may have a significant effect on interest

rates and on the economy generally, which in turn may affect the price of the securities in which the Company plans to invest.

High interest

rates, the imposition of credit controls or other restraints on the financing of takeovers or other acquisitions could diminish the number

of merger tender offers, exchange offers or other acquisitions, and as a consequence have a materially adverse effect on the activities

of the Company Moreover, changes in U.S.

federal, state, and local tax laws, U.S.

federal or state securities and bankruptcy laws or

in accounting standards may make corporate acquisitions or restructurings less desirable or make risk arbitrage less profitable.

Bankruptcy Code or other relevant laws could also alter an expected outcome or introduce greater uncertainty regarding the

likely outcome of an investment situation.

In addition, governmental policies could create uncertainty for the global financial system

and such uncertainty may increase the risks inherent to the Company and its activities.

For example, tariffs and restrictions, as well

as other changes in U.S.

trade policy, have resulted in, and may continue to trigger, retaliatory actions by affected countries, including

imposing trade sanctions on certain U.S.

A “trade war” of this nature has the potential to increase costs, decrease

margins, reduce the competitiveness of products and services offered by current and future portfolio companies and adversely affect the

revenues and profitability of companies whose businesses rely on imports and exports.

Prospective investors should realize that any significant

changes in governmental policies (including tariffs and other policies involving international trade) could have a material adverse impact

on the Company and its investments.

interest rates may increase our borrowing costs and reduce the net return that we are able to achieve on debt investments in portfolio

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under the Credit Facility by $25 million to $87.5 million.

All other material terms of the Credit Facility remain unchanged.

common stock may be exposed to an increased risk of loss because a decrease in the value of our investments may have a greater negative

impact on the value of our common stock than if we did not use leverage;

we do not appropriately match the assets and liabilities of our business, adverse changes in interest rates could reduce or eliminate

the incremental income we make with the proceeds of any leverage;

ability to pay distributions on our common stock may be restricted if our asset coverage ratio with respect to each of our outstanding

senior securities representing indebtedness and our outstanding preferred shares, as defined by the 1940 Act, is not at least 200%

and any amounts used to service indebtedness or preferred stock would not be available for such distributions;

credit facility to which we became a party may be subject to periodic renewal by our lenders, whose continued participation cannot

be guaranteed;

credit facility to which we became a party may contain covenants restricting our operating flexibility;

and indirectly our stockholders, bear the cost of issuing and paying interest or dividends on such securities;

convertible or exchangeable securities that we issue may have rights, preferences and privileges more favorable than those of our

common shares.

April 17, 2025 (the “Third Amendment Effective Date”), in order to extend the term and increase the size of the Credit Facility,

the parties to the Credit Facility amended the terms of the Credit Facility, effective as of the Third Amendment Effective Date (the

“Third Amendment”).

The Third Amendment increased the principal amount of the loan available under the Credit Facility by

$12.5 million to $100.0 million (with potential access to up to an additional $50.0 million pursuant to an uncommitted accordion provision)

and appointed BankUnited, N.A.

to assume all agency and syndication responsibilities from the prior agent and lenders.

The Amendment

also extended the term of the credit facility to April 17, 2030, five years from the Third Amendment Effective Date.

Other material terms

remain substantially unchanged.

common stock may be exposed to an increased risk of loss because a decrease in the value

of our investments may have a greater negative impact on the value of our common stock than

if we did not use leverage;

we do not appropriately match the assets and liabilities of our business, adverse changes

in interest rates could reduce or eliminate the incremental income we make with the proceeds

of any leverage;

ability to pay distributions on our common stock may be restricted if our asset coverage

ratio with respect to each of our outstanding senior securities representing indebtedness

and our outstanding preferred shares, as defined by the 1940 Act, is not at least 200% and

any amounts used to service indebtedness or preferred stock would not be available for such

distributions;

credit facility to which we became a party may be subject to periodic renewal by our lenders,

whose continued participation cannot be guaranteed;

credit facility to which we became a party may contain covenants restricting our operating

and indirectly our stockholders, bear the cost of issuing and paying interest or dividends

on such securities;

convertible or exchangeable securities that we issue may have rights, preferences and privileges

more favorable than those of our common shares.

the provisions of the 1940 Act, we are permitted, as a BDC, to issue debt securities or preferred stock and/or borrow money from banks

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of September 30, 2025, the Company’s asset coverage was 207.8% after giving effect to leverage and therefore the Company’s

asset coverage is above 200%, the minimum asset coverage requirement under the 1940 Act.

asset coverage is above 200%, the minimum asset coverage requirement applicable to the Company under the 1940 Act.

lack of liquidity in our investments may adversely affect our business.

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few portfolio companies.

(Note our significant investment in our affiliate FlexFIN – see Risks Related to our Investments).

(Note our significant investments in our affiliates FlexFIN and NSG – see Risks Related to our Investments).

are exposed to risks associated with changes in interest rates.

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companies in which we invest bear interest at SOFR based rates.

Previously, our credit facilities and our debt investments in portfolio

companies bore interest at U.S dollar London Interbank Overnight (USD LIBOR) rates.

is considered to be a risk-free rate, and USD LIBOR was a risk weighted rate.

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30, 2025, the Company’s asset coverage was 207.8% after giving effect to leverage and therefore the Company’s asset coverage

is above 200%, the minimum asset coverage requirement under the 1940 Act.

All distributions will be paid at the discretion of our board

of directors and will depend on our earnings, our financial condition, maintenance of our RIC tax treatment, compliance with applicable

BDC regulations, and such other factors as our board of directors may deem relevant from time to time.

We cannot assure you that we will

pay distributions to our stockholders in the future.

is above 200%, the minimum asset coverage requirement applicable to us under the 1940 Act.

All distributions will be paid at the discretion

of our board of directors and will depend on our earnings, our financial condition, maintenance of our RIC tax treatment, compliance

with applicable BDC regulations, and such other factors as our board of directors may deem relevant from time to time.

We cannot assure

you that we will pay distributions to our stockholders in the future.

highly competitive market in which we operate may limit our investment opportunities.

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number and/or size of our competitors in this target market could force us to accept less attractive investment terms.

Furthermore, many

Furthermore, several

of our competitors have greater experience operating under the regulatory restrictions of the 1940 Act and under an internalized management

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planning could impair our ability to conduct business effectively.

occurrence of a disaster, such as a cyber-attack against us, certain of our portfolio companies, or against a third-party that has

access to our data or networks, a natural catastrophe, an industrial accident, failure of our disaster recovery systems, or

consequential employee error, could have an adverse effect on our ability to communicate or conduct business (including the business of certain portfolio companies), negatively impacting

our operations and financial condition.

This adverse effect can become particularly acute if those events affect our electronic data

processing, transmission, storage, and retrieval systems, or impact the availability, integrity, or confidentiality of our

occurrence of a disaster, such as a cyber-attack against us, certain portfolio companies, or against a third-party that has access to

our data or networks, a natural catastrophe, an industrial accident, failure of our disaster recovery systems, or consequential employee

error, could have an adverse effect on our ability to communicate or conduct business (including the business of certain portfolio companies),

negatively impacting our operations and financial condition.

This adverse effect can become particularly acute if those events affect

our electronic data processing, transmission, storage, and retrieval systems, or impact the availability, integrity, or confidentiality

depend heavily upon computer systems to perform necessary business functions.

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parties with which we do business and certain of our portfolio companies may also be sources of cybersecurity or other technological

We outsource certain functions and these relationships allow for the storage and processing of our information, as well as

customer, counterparty, employee and borrower information.

Cybersecurity failures or breaches our service providers (including, but

not limited to, accountants, custodians, transfer agents and administrators), and the issuers of securities in which we invest, also

have the ability to cause disruptions and impact business operations, potentially resulting in financial losses, interference with

our ability to calculate its net asset value, impediments to trading, the inability of our stockholders to transact business,

violations of applicable privacy and other laws, regulatory fines, penalties, reputation damages, reimbursement of other

compensation costs, or additional compliance costs.

While we engage in actions to reduce our exposure resulting from outsourcing,

ongoing threats may result in unauthorized access, loss, exposure or destruction of data, or other cybersecurity incidents, with

increased costs and other consequences, including those described above.

In addition, substantial costs may be incurred in order to

prevent any cyber incidents in the future.

We outsource certain functions and these relationships allow for the storage and processing of our information, as well as customer,

counterparty, employee and borrower information.

Cybersecurity failures or breaches our service providers (including, but not limited

to, accountants, custodians, transfer agents and administrators), and the issuers of securities in which we invest, also have the ability

to cause disruptions and impact business operations, potentially resulting in financial losses, interference with our ability to calculate

its net asset value, impediments to trading, the inability of our stockholders to transact business, violations of applicable privacy

and other laws, regulatory fines, penalties, reputation damages, reimbursement of other compensation costs, or additional compliance

While we engage in actions to reduce our exposure resulting from outsourcing, ongoing threats may result in unauthorized access,

loss, exposure or destruction of data, or other cybersecurity incidents, with increased costs and other consequences, including those

described above.

In addition, substantial costs may be incurred in order to prevent any cyber incidents in the future.

and information security laws and regulation changes, and compliance with those changes, may result in cost increases due to system changes

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to litigation and financial losses that are not fully insured.

Technological

innovations and industry disruptions, including those related to artificial intelligence and machine learning, may negatively impact

Technological

innovations, including artificial intelligence and machine learning, have disrupted traditional approaches in multiple industries and

can permit companies to achieve success and in the process disrupt markets and market practices.

We can provide no assurance that new

businesses and approaches will not be created that would compete with us and/or our portfolio companies or alter the market practices

in which we have been designed to function within and on which we depend on for our investment return.

New approaches could damage our

investments, disrupt the market in which we operate and subject us to increased competition, which could materially and adversely affect

our business, financial condition and results of investments.

may, subject to internal policies, use artificial intelligence or machine learning in connection with our business activities.

of artificial intelligence and machine learning carries with it certain risks, including the risks that inputs include confidential or

personally identifiable information and that outputs contain inaccuracies and errors.

The applications of artificial intelligence and

machine learning, including those in the investment and financial sectors, continue to develop rapidly, and it is impossible to predict

all of the future risks that may arise from such developments.

We cannot control the use of artificial intelligence or machine learning

in our portfolio companies or third-party products or services and therefore could be exposed to associated risks if our portfolio companies,

third-party service providers or any counterparties use artificial intelligence or machine learning in their business activities.

Related to Our Investments

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from making follow-on investments in certain portfolio companies to the extent that affiliates of ours hold interests in such companies.

of September 30, 2025, 15.3% of our total assets were invested in NSG, our insurance business.

significant exposure subjects our Company to various risks associated with such business to a much greater extent than companies not

similarly concentrated.

of September 30, 2025, 11.7% of our total assets were invested in FlexFIN, our affiliate’s asset-based lending business.

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under Item 1A for risk factors related to our investment in that business.

See “Subsequent Events” for a discussion of our

investment in an insurance business.

Related to Our Operations as a BDC and a RIC

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asset coverage was 207.8% after giving effect to leverage and therefore the Company’s asset coverage is above 200%, the minimum

asset coverage requirement under the 1940 Act.

asset coverage requirement applicable to us under the 1940 Act.

in the laws or regulations governing our business, or changes in the interpretations thereof, and any failure by us to comply with these

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distribution, income source and asset diversification requirements.

annual distribution requirement for a RIC is satisfied if we timely distribute to our stockholders on an annual basis at least 90%

of our net ordinary income and realized short-term capital gains in excess of realized net long-term capital losses.

the level of taxable income earned in a tax year, we may choose to carry forward taxable income in excess of current year distributions

into the next year and pay a 4% U.S.

The annual distribution

requirement for a RIC is satisfied if we timely distribute to our stockholders on an annual basis at least 90% of our net ordinary

income and realized short-term capital gains in excess of realized net long-term capital losses.

Depending on the level of taxable

income earned in a tax year, we may choose to carry forward taxable income in excess of current year distributions into the next

year and pay a 4% U.S.

federal excise tax on such income.

Any such carryover taxable income must be distributed through

a dividend declared prior to filing the final tax return related to the year that generated such taxable income.

source of income requirement is satisfied if we obtain at least 90% of our gross income for each taxable year from dividends, interest,

payments with respect to certain securities loans, gains from the sale or other disposition of stock or other securities or foreign

currencies or other income derived with respect to our business of investing in such stock, securities or currencies and net income

derived from an interest in a “qualified publicly traded partnership” (as defined in the Code).

asset diversification requirement is satisfied if we meet certain asset diversification requirements at the end of each quarter of

our taxable year.

To satisfy this requirement, at least 50% of the value of our assets must consist of cash, cash equivalents, U.S

Government securities, securities of other RICs, and other securities if such other securities of any one issuer do not represent

more than 5% of the value of our assets or more than 10% of the outstanding voting securities of the issuer (which for these purposes

includes the equity securities of a “qualified publicly traded partnership”).

In addition, no more than 25% of the value

of our assets can be invested in the securities, other than U.S Government securities or securities of other RICs, (1) of one issuer

(2) of two or more issuers that are controlled, as determined under applicable tax rules, by us and that are engaged in the same

or similar or related trades or businesses or (3) of one or more “qualified publicly traded partnerships”.

Any such carryover taxable income must be distributed through a dividend

declared prior to filing the final tax return related to the year that generated such taxable income.

The source of income requirement

is satisfied if we obtain at least 90% of our gross income for each taxable year from dividends, interest, payments with respect

to certain securities loans, gains from the sale or other disposition of stock or other securities or foreign currencies or other

income derived with respect to our business of investing in such stock, securities or currencies and net income derived from an interest

in a “qualified publicly traded partnership” (as defined in the Code).

asset diversification requirement is satisfied if we meet certain asset diversification requirements

at the end of each quarter of our taxable year.

To satisfy this requirement, at least 50% of the

value of our assets must consist of cash, cash equivalents, U.S.

Government securities, securities

of other RICs, and other securities if such other securities of any one issuer do not represent more

than 5% of the value of our assets or more than 10% of the outstanding voting securities of the issuer

(which for these purposes includes the equity securities of a “qualified publicly traded partnership”).

In addition, no more than 25% of the value of our assets can be invested in the securities, other

Government securities or securities of other RICs, (1) of one issuer (2) of two or more

issuers that are controlled, as determined under applicable tax rules, by us and that are engaged

in the same or similar or related trades or businesses or (3) of one or more “qualified publicly

traded partnerships”.

we fail to qualify for RIC tax treatment for any reason or are subject to corporate-level U.S.

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These factors

volatility in the market price and trading volume of securities of business development companies or other companies in our sector,

which are not necessarily related to the operating performance of the companies;

in regulatory policies, accounting pronouncements or tax guidelines, particularly with respect to BDCs or RICs;

of our qualification as a RIC or BDC;

in earnings or variations in operating results;

in the value of our portfolio of investments;

in accounting guidelines governing valuation of our investments;

shortfall in revenue or net income or any increase in losses from levels expected by investors or securities analysts;

of our key personnel;

performance of companies comparable to us;

economic trends and other external factors;

of a major funding source.

significant volatility

in the market price and trading volume of securities of business development companies or other companies in our sector, which are

not necessarily related to the operating performance of the companies;

changes in regulatory policies,

accounting pronouncements or tax guidelines, particularly with respect to BDCs or RICs;

loss of our qualification

as a RIC or BDC;

changes in earnings or variations in operating results;

changes in the value of our portfolio of investments;

changes in accounting guidelines governing valuation

of our investments;

any shortfall in revenue or net income or any increase

in losses from levels expected by investors or securities analysts;

departure of our key personnel;

operating performance of

companies comparable to us;

general economic trends

and other external factors;

loss of a major funding

provisions of the Delaware General Corporation Law and our certificate of incorporation and bylaws could deter takeover attempts and

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terms of the Credit Facility place restrictions on our and/or our subsidiaries’ ability to, among other things, issue securities

or otherwise incur additional indebtedness or other obligations, and in certain cases we may need the approval of WoodForest, as the

or otherwise incur additional indebtedness or other obligations, and in certain cases we may need the approval of BankUnited, as the

Administrative Agent, in order to incur further indebtedness.

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litigation and stockholder activism.

Risks of the Insurance Business

Risks Related to Life Insurance

Actual claims and benefits payments may differ from actuarial

assumptions and may adversely affect NSG’s financial results, capitalization and financial condition.

Due to the nature of the underlying risks and the uncertainty associated

with the determination of liabilities for future policy benefits and claims, NSG cannot precisely determine the amounts which it will

ultimately pay to settle these liabilities.

Because of the inability to determine with precision the amounts required to settle future

policy benefits and claims, NSG must rely on actuarial assumptions.

Liabilities for future policy benefits and claims are established

based on actuarial estimates of how much NSG will need to pay for future benefits and claims.

NSG’s earnings significantly depend

upon the extent to which its actual claims experience and benefit payments on its products are consistent with such assumptions.

NSG makes assumptions regarding policyholder behavior, including

with respect to guaranteed options, but those assumptions may be incorrect.

NSG makes assumptions regarding policyholder behavior at the time of

pricing, including regarding the selection and utilization of the guaranteed options inherent within certain of its products.

increase in the valuation of liabilities for future benefit payments could result to the extent that emerging and actual experience deviates

from policyholder option utilization assumptions.

These assumptions are based in part on expected persistency of the products, which change

the probability that a policy or contract will remain in force from one period to the next.

Persistency could be adversely affected by

a number of factors, including adverse economic conditions, as well as by developments affecting policyholder perception of NSG and perceptions

arising from any potential adverse publicity or negative rating agency actions.

If NSG’s actual claims experience differs from the assumptions

used to establish reserves for its liabilities, NSG may be required to increase its reserves.

NSG evaluates its liabilities regularly based on accounting requirements

(which change from time to time), the assumptions and models used to establish the liabilities, as well as actual experience.

amounts actually paid may vary materially from the estimated amounts, particularly when those payments may not occur until well into the

To the extent that actual claims and benefits experience differs from the underlying assumptions used in establishing such liabilities,

NSG could be required to increase its reserves for liabilities.

An increase in reserves required for any of the above reasons, individually

or in the aggregate, could have a material adverse effect on NSG’s financial condition and results of operations and its profitability

measures, as well as materially impact its capitalization, statutory free cash flow and liquidity.

This could impact NSG’s risk-based

capital ratios and its financial strength ratings, which are necessary to support its product sales, and, in certain circumstances, ultimately

impact its solvency.

See also “NSG’s actual claims losses may exceed reserves for claims and it may be required to establish

additional reserves, which in turn may adversely impact its results of operations and financial condition” below.

Pricing accuracy depends on accurate morbidity and mortality

estimates, but the data on which such estimates are based may be insufficient, incorrect or incomplete .

In order to price products accurately, NSG must develop and apply appropriate

morbidity and mortality estimates, closely monitor and timely recognize changes in trends, and project both severity and frequency of

losses with reasonable accuracy to cover these risks.

Pricing adequacy is necessary to generate sufficient premiums to cover NSG’s

cost of sales, costs of operations (including payment of policy benefits) and to earn a profit.

Pricing adequacy is subject to a number

of risks and uncertainties, including, without limitation:

availability of sufficient reliable data;

incorrect or incomplete analysis

of available data;

of the Insurance Business

of September, 2025, 15.3% of our total assets were invested in NSG, our insurance business, which subjects the Company to various additional

special risks.

Related to Life Insurance

claims and benefits payments may differ from actuarial assumptions and may adversely affect NSG’s financial results, capitalization

and financial condition.

to the nature of the underlying risks and the uncertainty associated with the determination of liabilities for future policy benefits

and claims, NSG cannot precisely determine the amounts which it will ultimately pay to settle these liabilities.

Because of the inability

to determine with precision the amounts required to settle future policy benefits and claims, NSG must rely on actuarial assumptions.

Liabilities for future policy benefits and claims are established based on actuarial estimates of how much NSG will need to pay for future

benefits and claims.

NSG’s earnings significantly depend upon the extent to which its actual claims experience and benefit payments

on its products are consistent with such assumptions.

makes assumptions regarding policyholder behavior, including with respect to guaranteed options, but those assumptions may be incorrect.

makes assumptions regarding policyholder behavior at the time of pricing, including regarding the selection and utilization of the guaranteed

options inherent within certain of its products.

A material increase in the valuation of liabilities for future benefit payments could

result to the extent that emerging and actual experience deviates from policyholder option utilization assumptions.

These assumptions

are based in part on expected persistency of the products, which change the probability that a policy or contract will remain in force

from one period to the next.

Persistency could be adversely affected by a number of factors, including adverse economic conditions, as

well as by developments affecting policyholder perception of NSG and perceptions arising from any potential adverse publicity or negative

rating agency actions.

NSG’s actual claims experience differs from the assumptions used to establish reserves for its liabilities, NSG may be required

to increase its reserves.

evaluates its liabilities regularly based on accounting requirements (which change from time to time), the assumptions and models used

to establish the liabilities, as well as actual experience.

For example, amounts actually paid may vary materially from the estimated

amounts, particularly when those payments may not occur until well into the future.

To the extent that actual claims and benefits experience

differs from the underlying assumptions used in establishing such liabilities, NSG could be required to increase its reserves for liabilities.

An increase in reserves required for any of the above reasons, individually or in the aggregate, could have a material adverse effect

on NSG’s financial condition and results of operations and its profitability measures, as well as materially impact its capitalization,

statutory free cash flow and liquidity.

This could impact NSG’s risk-based capital ratios and its financial strength ratings, which

are necessary to support its product sales, and, in certain circumstances, ultimately impact its solvency.

See also “NSG’s

actual claims losses may exceed reserves for claims and it may be required to establish additional reserves, which in turn may adversely

impact its results of operations and financial condition” below.

accuracy depends on accurate morbidity and mortality estimates, but the data on which such estimates are based may be insufficient, incorrect

or incomplete .

order to price products accurately, NSG must develop and apply appropriate morbidity and mortality estimates, closely monitor and timely

recognize changes in trends, and project both severity and frequency of losses with reasonable accuracy to cover these risks.

adequacy is necessary to generate sufficient premiums to cover NSG’s cost of sales, costs of operations (including payment of policy

benefits) and to earn a profit.

Pricing adequacy is subject to a number of risks and uncertainties, including, without limitation:

of sufficient reliable data;

incorrect or incomplete analysis of available data;

uncertainties inherent in estimates and assumptions;

selection and application of appropriate rating formulae or other

pricing methodologies;

selection and application of appropriate rating formulae or other pricing methodologies;

adoption of successful pricing strategies;

prediction of policyholder life expectancy and retention;

or unanticipated events, legislation, regulatory action or court decisions;

of policyholder life expectancy and retention;

unforeseen or unanticipated events, legislation, regulatory action or court decisions;

and unexpected changes in interests rates or inflation.

risks may result in NSG’s pricing being based on outdated, inadequate, or inaccurate data, or inappropriate analyses, assumptions,

or methodologies, and may cause NSG to estimate incorrectly future changes in the frequency or severity of claims.

As a result, NSG could

underprice risks, which would negatively affect NSG’s margins, or it could overprice risks, which could reduce NSG’s volume

and competitiveness.

Public health crises, extreme mortality events or similar occurrences

may adversely impact NSG’s business, financial condition, or results of operations.

NSG’s life insurance operations are exposed to the risk of catastrophic

mortality, such as a pandemic or other event that causes a large number of deaths, and the likelihood, timing and severity of such events

cannot be predicted.

Economic uncertainty resulting from a public health crisis or similar event could impact sales of certain of NSG’s

products, and NSG may decide or otherwise be required to provide relief to customers adversely affected by such an event.

the impact of climate change could cause changes in the frequency or severity of outbreaks of certain diseases.

Circumstances resulting

from a public health crisis or similar event could affect the incidence of claims, utilization of benefits, lapses or surrenders of policies

and payments on insurance premiums, any of which could impact the revenues and expenses associated with NSG’s products.

be certain that the liabilities it has established for claims arising from a catastrophe will be adequate to cover actual claim liabilities.

Conversely, improvements in medical care and other developments which positively affect life expectancy can cause NSG’s assumptions

with respect to longevity, which it uses when it prices its products, to become incorrect and, accordingly, can adversely affect its financial

condition and results of operations.

Liquidity may be adversely affected by policyholder withdrawals

and surrenders or if holders of whole life policies elect to receive lump sum distributions at greater-than-anticipated levels .

NSG’s insurance business is exposed to the risk of unanticipated

or extraordinary early policyholder withdrawals or surrenders.

Early withdrawal and surrender levels may differ from anticipated levels

for a variety of reasons, including changes in economic conditions, changes in policyholder behavior or financial needs or increases in

surrenders among policies that are no longer subject to surrender charges.

In addition, NSG faces potential liquidity risks if policyholders

with mature policies elect to receive lump sum distributions at greater levels than anticipated.

If NSG experiences unanticipated early

withdrawal or surrender activity or greater than expected lump sum distributions of endowment maturities and lacks sufficient cash flow

from its insurance operations to support payment of these benefits, NSG may have to sell its investments in order to meet cash needs or

be forced to obtain third-party financing.

The availability of such financing will depend on a variety of factors, such as market conditions,

the availability of credit in general or more specifically in the insurance industry, the strength or weakness of the capital markets,

NSG’s credit capacity, and the perception of NSG’s long- or short-term financial prospects.

If NSG is forced to sell its investments

on unfavorable terms or obtain financing with unfavorable terms, it could have an adverse effect on NSG’s liquidity, results of

operations and financial condition.

Changes in surrender activity may also result in remeasurement gains

or losses which could increase volatility in NSG’s results of operations.

Risks Related to Property & Casualty Insurance

If NSG is unable to accurately assess its underwriting risk,

its financial condition and results of operations could be adversely affected .

NSG’s underwriting success depends on its ability to accurately

assess the risks associated with the business it writes and retains.

NSG relies on the experience of its underwriting staff in assessing

those risks, and on information provided by insureds or their representatives when underwriting insurance policies.

While NSG may make

inquiries to validate or supplement the information provided, it may make underwriting decisions based on incorrect or incomplete information.

A misunderstanding of the nature or extent of the risks may cause NSG to fail to establish appropriate premium rates which could adversely

affect its financial results.

The usefulness of models as a tool to evaluate risk is subject

to a high degree of uncertainty which could result in actual losses that are materially different from NSG’s estimates and could

have a significant adverse impact on NSG’s financial results.

NSG’s approach to risk management relies on subjective variables

that entail significant uncertainties, and small changes in assumptions which depend heavily on judgment and foresight can have a significant

impact on the modeled outputs.

For example, NSG relies on catastrophe modeling results in its decision-making regarding the upper limits

of its catastrophe reinsurance protection.

These models simulate loss estimates based on a set of assumptions that impact loss potential,

and may not produce accurate predictions.

Models used to assess risk are subject to a high degree of uncertainty.

These uncertainties

can include, among other things, that they may not address all possible hazards, may not reflect the true frequency of events, may not

accurately reflect a risk’s vulnerability or susceptibility to damage for a given event, may not accurately represent loss potential

to insurance or reinsurance contract coverage limits and other contract terms and may not accurately reflect judicial, political or regulatory

NSG’s losses and loss expense reserves may be inadequate

to cover its actual losses, which could have a material adverse effect on its financial conditions, results of operations and cash flows .

NSG maintains losses and loss expense reserves based on its estimate

of the ultimate payment of all claims that have been or could be incurred in the future, and the related costs of adjusting those claims.

However, reserves do not represent an exact calculation of liability, but rather an estimate of what NSG expects settlement and administration

claims will cost, and its actual liability may be greater or less than the estimate.

These variables are affected by both internal and external events that

could increase NSG’s exposure to losses and there is no precise method for evaluating the impact of any specific factor on the adequacy

of loss reserves.

Uncertainties may result from factors including, but not limited to, the emergence of new information after there has

been time to appreciate the full extent of covered losses;

new theories of liability that are enforced retroactively by courts;

in the number and severity of claims;

increases in costs (such as medical, legal or supply chain costs) to remedy covered losses;

the risk of unanticipated assessments from state underwriting associations or windstorm pools related to losses in excess of the associations

or pool’s ability to pay.

Unexpected changes in the interpretation of NSG’s coverage

or provisions, including loss limitations and exclusions, in its policies could have a material adverse effect on NSG’s financial

condition and results of operations.

There can be no assurances that loss limitations or exclusions in NSG’s

policies will be enforceable in the manner intended.

As industry practices as well as legal, judicial, social, and other conditions change,

unexpected and unintended issues related to claims and coverage may emerge.

While these limitations and exclusions help NSG to assess

and mitigate its loss exposure, it is possible that a court or regulatory authority could nullify or void a limitation or exclusion, or

that legislation could be enacted modifying or barring the use of such limitations or exclusions.

In addition, court decisions could read

policy exclusions narrowly so as to expand coverage.

This could adversely affect NSG’s business by broadening coverage beyond its

underwriting intent or by increasing the frequency or severity of claims, and could result in higher than anticipated losses.

instances, these changes may not become apparent until after insurance contracts are issued, and the full extent of liability under such

contracts may not be known for many years after a contract is issued.

NSG’s failure to accurately and timely pay claims could

materially and adversely affect its business .

Many factors could affect NSG’s ability to accurately and timely

pay claims, including the training and experience of its claims representatives, the effectiveness of management, and its ability to develop

or select and implement appropriate procedures and systems to support its claims functions, among other factors.

NSG’s failure to

accurately and timely pay claims could lead to regulatory action or litigation, undermine its reputation, and adversely affect its business,

financial condition, results of operations and prospects.

The property and casualty insurance business is historically

cyclical in nature, which may affect NSG’s financial performance, cause its operating results to vary from quarter to quarter and

may not be indicative of future performance.

The supply of property and casualty insurance is related to prevailing

prices, the level of insured losses and the level of capital available to the industry that, in turn, may fluctuate in response to changes

in rates of return on investments being earned in the insurance industry.

As a result, the property and casualty insurance business historically

has been a cyclical industry characterized by periods of intense price competition due to excessive underwriting capacity as well as periods

when shortages of capacity increased premium levels.

In addition, demand for property and casualty insurance depends on numerous factors,

including the frequency and severity of catastrophic events, levels of capacity, the introduction of new capital providers and general

economic conditions.

All of these factors fluctuate and may contribute to price declines in the insurance industry generally.

NSG’s operating results are subject to fluctuation.

If actual renewals do not meet expectations or if NSG chooses not to

write renewals because of pricing conditions, its written premium in future years and its future operations would be materially adversely

Risks Related to the Insurance Business Generally

Competition for business in the insurance industry is intense .

NSG faces competition from specialty insurance companies, standard

insurance companies and underwriting agencies.

Competition among insurance companies is based on a number of factors, including reputation,

name recognition, credit ratings, financial strength ratings, relationships with distribution partners, terms and conditions of products

offered, and speed of claims payment.

In recent years, the insurance industry has undergone increasing consolidation, which may further

increase competition.

In addition, some of NSG’s competitors are larger and have greater financial, marketing, and other resources

than NSG has, and are able to absorb large losses more easily.

NSG’s competitors may also offer more competitive pricing, a broader

range of products and have greater claims-paying ability.

NSG may not be able to continue to compete successfully in the insurance markets.

Increased competition in these markets could result in a change in the supply and demand for insurance, affect NSG’s ability to

price its products at risk-adequate

Because NSG’s business depends on insurance retail agents

and brokers, NSG is exposed to certain risks arising out of its reliance on these distribution channels .

NSG’s products are distributed through independent retail agents

Retail agents and brokers generally own the renewal rights, making NSG’s business model dependent on its relationships

with, and the success of, the retail agents and brokers with whom it does business.

NSG relies on a core number of brokers that account

for a substantial number of policies, and its relationships with its brokers and retail agents may be discontinued at any time.

or more such distributors were to terminate its relationship with NSG or reduce the amount of sales it produces, NSG’s results of

operations could be adversely affected.

Even if the relationships do continue, they may not be on terms that are profitable for NSG.

deterioration in the relationships with distributors or failure to provide competitive compensation could lead these distributors to place

more premium with other carriers and less premium with NSG.

Also, NSG’s distributors may in any event choose to concentrate their

efforts in selling their firm’s own products or NSG’s other competitors’ products instead of NSG’s.

NSG could also be adversely affected by consolidation in its distribution

sales channels.

Consolidation could result in loss of market access.

NSG could also be negatively affected due to loss of talent as the

people most knowledgeable about NSG’s products and with whom NSG has developed strong working relationships exit the business following

an acquisition, or, increases in its commission costs as larger distributors acquire more negotiating leverage over their fees.

Certain premiums from policyholders, where the business is produced

by brokers, are collected directly by the brokers and remitted to NSG, and NSG could be adversely affected if the brokers collect premiums

but do not remit them to NSG.

Despite the premiums not being paid to NSG, NSG may be required under applicable law to provide the coverage

set forth in the policy.

Consequently, NSG assumes a degree of credit risk associated with the brokers with which it works.

if NSG is limited in its ability to cancel policies for non-payment, its underwriting profits may decline and its financial condition

and results of operations could be materially and adversely affected.

Insurance companies are subject to extensive regulation, which

varies from jurisdiction to jurisdiction and may change from time to time .

NSG is subject to extensive regulation which may adversely affect its

ability to achieve its business objectives, and noncompliance with these regulations could subject NSG to penalties, including fines and

suspensions, which may adversely affect its financial condition and results of operations.

Applicable laws and rules are subject to change

by legislation or administrative or judicial interpretation, and changes in regulation could limit NSG’s discretion or make it more

expensive to conduct business.

In addition, state insurance regulators have broad discretion to deny

or revoke licenses for various reasons, including the violation of regulations.

In some instances, where there is uncertainty as to applicability,

NSG follows practices based on its interpretations of regulations or practices that it believes generally to be followed by the industry

which may turn out to be different from the interpretations of regulatory authorities.

If NSG does not have the requisite licenses and

approvals or does not comply with applicable regulatory requirements, state insurance regulators could preclude or temporarily suspend

it from carrying on some or all of its activities in their state or could otherwise penalize NSG.

This could adversely affect NSG’s

ability to operate its business.

Further, changes in the level of regulation of the insurance industry or changes in laws or regulations

themselves or interpretations by regulatory authorities could interfere with NSG’s operations and require it to bear additional

costs of compliance, which could adversely affect its ability to operate its business.

Also, because its products are sold through independent agents, NSG

has less control over how products are sold, including with respect to legal compliance.

While NSG expects its agents to comply with their

contractual obligations and applicable law, NSG has limited control over how such agents conduct their business.

If violations are attributed

to NSG, NSG could incur significant fines, and if attributed to its agents, may cause the agents to stop selling NSG’s products.

NSG may be unable to purchase reinsurance in amounts desired

on acceptable terms, and reinsurers may default or fail to perform .

NSG purchases reinsurance from third parties to limit its risk on individual

policies, and in the case of property insurance, limit its risk in the event of a catastrophe in various geographic areas (including,

without limitation, the risk of hurricanes and tornado activity in the states in which it operates).

If NSG is unable to renew expiring

reinsurance contracts or enter into new reinsurance arrangements on acceptable terms, NSG’s loss exposure could increase, which

would increase potential losses related to such loss events.

If NSG is unwilling to bear an increase in loss exposure, it may need to

reduce the level of its underwriting commitments which could materially adversely affect its business, financial condition and results

Such risks may result in NSG’s pricing being based on outdated, inadequate,

or inaccurate data, or inappropriate analyses, assumptions, or methodologies, and may cause NSG to estimate incorrectly future changes

in the frequency or severity of claims.

As a result, NSG could underprice risks, which would negatively affect NSG’s margins, or

it could overprice risks, which could reduce NSG’s volume and competitiveness.

health crises, extreme mortality events or similar occurrences may adversely impact NSG’s business, financial condition, or results

of operations.

In addition, reinsurers may exclude certain coverages from, or alter terms in, the reinsurance contracts NSG enters into

NSG, like other insurance companies, could write insurance policies which to some extent do not have the benefit of reinsurance

protection, but these gaps in reinsurance protection expose NSG to greater risk and greater potential losses.

Although reinsurance makes the reinsurer liable to NSG to the extent

the risk is transferred or ceded to the reinsurer, it does not relieve NSG (the ceding insurer) of its primary liability to policyholders.

Reinsurers may not pay claims NSG incurs on a timely basis, or they may not pay some or all of these claims.

Any disputes with reinsurers

regarding coverage under reinsurance contracts could be time consuming, costly, and uncertain of success.

In addition, NSG’s reinsurance

may be concentrated among a few reinsurance carriers, meaning that if one or more of these reinsurers do not renew, default on payment

of claims, or become insolvent, NSG could incur increased net losses and its financial condition could be adversely affected.

A downgrade or potential downgrade in NSG’s financial strength

rating could adversely affect its business .

Participants in the insurance industry use ratings from independent

ratings agencies as an important means of assessing the financial strength and quality of insurers.

Downgrades in NSG’s financial

strength rating could cause NSG’s partners to choose more highly rated competitors;

increase the cost or reduce the availability

of reinsurance;

life insurance operations are exposed to the risk of catastrophic mortality, such as a pandemic or other event that causes a large number

of deaths, and the likelihood, timing and severity of such events cannot be predicted.

Economic uncertainty resulting from a public health

crisis or similar event could impact sales of certain of NSG’s products, and NSG may decide or otherwise be required to provide

relief to customers adversely affected by such an event.

In addition, the impact of climate change could cause changes in the frequency

or severity of outbreaks of certain diseases.

Circumstances resulting from a public health crisis or similar event could affect the incidence

of claims, utilization of benefits, lapses or surrenders of policies and payments on insurance premiums, any of which could impact the

revenues and expenses associated with NSG’s products.

NSG cannot be certain that the liabilities it has established for claims

arising from a catastrophe will be adequate to cover actual claim liabilities.

Conversely, improvements in medical care and other developments

which positively affect life expectancy can cause NSG’s assumptions with respect to longevity, which it uses when it prices its

products, to become incorrect and, accordingly, can adversely affect its financial condition and results of operations.

may be adversely affected by policyholder withdrawals and surrenders or if holders of whole life policies elect to receive lump sum distributions

at greater-than-anticipated levels .

insurance business is exposed to the risk of unanticipated or extraordinary early policyholder withdrawals or surrenders.

Early withdrawal

and surrender levels may differ from anticipated levels for a variety of reasons, including changes in economic conditions, changes in

policyholder behavior or financial needs or increases in surrenders among policies that are no longer subject to surrender charges.

addition, NSG faces potential liquidity risks if policyholders with mature policies elect to receive lump sum distributions at greater

levels than anticipated.

If NSG experiences unanticipated early withdrawal or surrender activity or greater than expected lump sum distributions

of endowment maturities and lacks sufficient cash flow from its insurance operations to support payment of these benefits, NSG may have

to sell its investments in order to meet cash needs or be forced to obtain third-party financing.

The availability of such financing

will depend on a variety of factors, such as market conditions, the availability of credit in general or more specifically in the insurance

industry, the strength or weakness of the capital markets, NSG’s credit capacity, and the perception of NSG’s long- or short-term

financial prospects.

If NSG is forced to sell its investments on unfavorable terms or obtain financing with unfavorable terms, it could

have an adverse effect on NSG’s liquidity, results of operations and financial condition.

in surrender activity may also result in remeasurement gains or losses which could increase volatility in NSG’s results of operations.

Related to Property & Casualty Insurance

NSG is unable to accurately assess its underwriting risk, its financial condition and results of operations could be adversely affected .

underwriting success depends on its ability to accurately assess the risks associated with the business it writes and retains.

on the experience of its underwriting staff in assessing those risks, and on information provided by insureds or their representatives

when underwriting insurance policies.

While NSG may make inquiries to validate or supplement the information provided, it may make underwriting

decisions based on incorrect or incomplete information.

A misunderstanding of the nature or extent of the risks may cause NSG to fail

to establish appropriate premium rates which could adversely affect its financial results.

usefulness of models as a tool to evaluate risk is subject to a high degree of uncertainty which could result in actual losses that are

materially different from NSG’s estimates and could have a significant adverse impact on NSG’s financial results.

approach to risk management relies on subjective variables that entail significant uncertainties, and small changes in assumptions which

depend heavily on judgment and foresight can have a significant impact on the modeled outputs.

For example, NSG relies on catastrophe

modeling results in its decision-making regarding the upper limits of its catastrophe reinsurance protection.

These models simulate loss

estimates based on a set of assumptions that impact loss potential, and may not produce accurate predictions.

Models used to assess risk

are subject to a high degree of uncertainty.

These uncertainties can include, among other things, that they may not address all possible

hazards, may not reflect the true frequency of events, may not accurately reflect a risk’s vulnerability or susceptibility to damage

for a given event, may not accurately represent loss potential to insurance or reinsurance contract coverage limits and other contract

terms and may not accurately reflect judicial, political or regulatory impacts.

losses and loss expense reserves may be inadequate to cover its actual losses, which could have a material adverse effect on its financial

conditions, results of operations and cash flows .

maintains losses and loss expense reserves based on its estimate of the ultimate payment of all claims that have been or could be incurred

in the future, and the related costs of adjusting those claims.

However, reserves do not represent an exact calculation of liability,

but rather an estimate of what NSG expects settlement and administration claims will cost, and its actual liability may be greater or

less than the estimate.

variables are affected by both internal and external events that could increase NSG’s exposure to losses and there is no precise

method for evaluating the impact of any specific factor on the adequacy of loss reserves.

Uncertainties may result from factors including,

but not limited to, the emergence of new information after there has been time to appreciate the full extent of covered losses;

of liability that are enforced retroactively by courts;

increases in the number and severity of claims;

increases in costs (such as medical,

legal or supply chain costs) to remedy covered losses;

and the risk of unanticipated assessments from state underwriting associations

or windstorm pools related to losses in excess of the associations or pool’s ability to pay.

changes in the interpretation of NSG’s coverage or provisions, including loss limitations and exclusions, in its policies could

have a material adverse effect on NSG’s financial condition and results of operations.

can be no assurances that loss limitations or exclusions in NSG’s policies will be enforceable in the manner intended.

practices as well as legal, judicial, social, and other conditions change, unexpected and unintended issues related to claims and coverage

While these limitations and exclusions help NSG to assess and mitigate its loss exposure, it is possible that a court or

regulatory authority could nullify or void a limitation or exclusion, or that legislation could be enacted modifying or barring the use

of such limitations or exclusions.

In addition, court decisions could read policy exclusions narrowly so as to expand coverage.

could adversely affect NSG’s business by broadening coverage beyond its underwriting intent or by increasing the frequency or severity

of claims, and could result in higher than anticipated losses.

In some instances, these changes may not become apparent until after insurance

contracts are issued, and the full extent of liability under such contracts may not be known for many years after a contract is issued.

failure to accurately and timely pay claims could materially and adversely affect its business .

factors could affect NSG’s ability to accurately and timely pay claims, including the training and experience of its claims representatives,

the effectiveness of management, and its ability to develop or select and implement appropriate procedures and systems to support its

claims functions, among other factors.

NSG’s failure to accurately and timely pay claims could lead to regulatory action or litigation,

undermine its reputation, and adversely affect its business, financial condition, results of operations and prospects.

property and casualty insurance business is historically cyclical in nature, which may affect NSG’s financial performance, cause

its operating results to vary from quarter to quarter and may not be indicative of future performance.

supply of property and casualty insurance is related to prevailing prices, the level of insured losses and the level of capital available

to the industry that, in turn, may fluctuate in response to changes in rates of return on investments being earned in the insurance industry.

As a result, the property and casualty insurance business historically has been a cyclical industry characterized by periods of intense

price competition due to excessive underwriting capacity as well as periods when shortages of capacity increased premium levels.

demand for property and casualty insurance depends on numerous factors, including the frequency and severity of catastrophic events,

levels of capacity, the introduction of new capital providers and general economic conditions.

All of these factors fluctuate and may

contribute to price declines in the insurance industry generally.

As a result, NSG’s operating results are subject to fluctuation.

actual renewals do not meet expectations or if NSG chooses not to write renewals because of pricing conditions, its written premium in

future years and its future operations would be materially adversely affected.

Related to the Insurance Business Generally

for business in the insurance industry is intense .

faces competition from specialty insurance companies, standard insurance companies and underwriting agencies.

Competition among insurance

companies is based on a number of factors, including reputation, name recognition, credit ratings, financial strength ratings, relationships

with distribution partners, terms and conditions of products offered, and speed of claims payment.

In recent years, the insurance industry

has undergone increasing consolidation, which may further increase competition.

In addition, some of NSG’s competitors are larger

and have greater financial, marketing, and other resources than NSG has, and are able to absorb large losses more easily.

competitors may also offer more competitive pricing, a broader range of products and have greater claims-paying ability.

be able to continue to compete successfully in the insurance markets.

Increased competition in these markets could result in a change

in the supply and demand for insurance, affect NSG’s ability to price its products at risk-adequate levels, and lead to reduced

profitability or loss of market share.

NSG’s business depends on insurance retail agents and brokers, NSG is exposed to certain risks arising out of its reliance on these

distribution channels .

products are distributed through independent retail agents and brokers.

Retail agents and brokers generally own the renewal rights, making

NSG’s business model dependent on its relationships with, and the success of, the retail agents and brokers with whom it does business.

NSG relies on a core number of brokers that account for a substantial number of policies, and its relationships with its brokers and

retail agents may be discontinued at any time.

If one or more such distributors were to terminate its relationship with NSG or reduce

the amount of sales it produces, NSG’s results of operations could be adversely affected.

Even if the relationships do continue,

they may not be on terms that are profitable for NSG.

A deterioration in the relationships with distributors or failure to provide competitive

compensation could lead these distributors to place more premium with other carriers and less premium with NSG.

Also, NSG’s distributors

may in any event choose to concentrate their efforts in selling their firm’s own products or other competitors’ products

instead of NSG’s products.

could also be adversely affected by consolidation in its distribution sales channels.

Consolidation could result in loss of market access.

NSG could also be negatively affected due to loss of talent as the people most knowledgeable about NSG’s products and with whom

NSG has developed strong working relationships exit the business following an acquisition, or, increases in its commission costs as larger

distributors acquire more negotiating leverage over their fees.

premiums from policyholders, where the business is produced by brokers, are collected directly by the brokers and remitted to NSG, and

NSG could be adversely affected if the brokers collect premiums but do not remit them to NSG.

Despite the premiums not being paid to

NSG, NSG may be required under applicable law to provide the coverage set forth in the policy.

Consequently, NSG assumes a degree of

credit risk associated with the brokers with which it works.

Similarly, if NSG is limited in its ability to cancel policies for non-payment,

its underwriting profits may decline and its financial condition and results of operations could be materially and adversely affected.

companies are subject to extensive regulation, which varies from jurisdiction to jurisdiction and may change from time to time .

is subject to extensive regulation which may adversely affect its ability to achieve its business objectives, and noncompliance with

these regulations could subject NSG to penalties, including fines and suspensions, which may adversely affect its financial condition

and results of operations.

Applicable laws and rules are subject to change by legislation or administrative or judicial interpretation,

and changes in regulation could limit NSG’s discretion or make it more expensive to conduct business.

addition, state insurance regulators have broad discretion to deny or revoke licenses for various reasons, including the violation of

In some instances, where there is uncertainty as to applicability, NSG follows practices based on its interpretations of

regulations or practices that it believes generally to be followed by the industry which may turn out to be different from the interpretations

of regulatory authorities.

If NSG does not have the requisite licenses and approvals or does not comply with applicable regulatory requirements,

state insurance regulators could preclude or temporarily suspend it from carrying on some or all of its activities in their state or

could otherwise penalize NSG.

This could adversely affect NSG’s ability to operate its business.

Further, changes in the level

of regulation of the insurance industry or changes in laws or regulations themselves or interpretations by regulatory authorities could

interfere with NSG’s operations and require it to bear additional costs of compliance, which could adversely affect its ability

to operate its business.

because its products are sold through independent agents, NSG has less control over how products are sold, including with respect to

legal compliance.

While NSG expects its agents to comply with their contractual obligations and applicable law, NSG has limited control

over how such agents conduct their business.

If violations are attributed to NSG, NSG could incur significant fines, and if attributed

to its agents, may cause the agents to stop selling NSG’s products.

may be unable to purchase reinsurance in amounts desired on acceptable terms, and reinsurers may default or fail to perform .

purchases reinsurance from third parties to limit its risk on individual policies, and in the case of property insurance, limit its risk

in the event of a catastrophe in various geographic areas (including, without limitation, the risk of hurricanes and tornado activity

in the states in which it operates).

If NSG is unable to renew expiring reinsurance contracts or enter into new reinsurance arrangements

on acceptable terms, NSG’s loss exposure could increase, which would increase potential losses related to such loss events.

NSG is unwilling to bear an increase in loss exposure, it may need to reduce the level of its underwriting commitments which could materially

adversely affect its business, financial condition and results of operations.

In addition, reinsurers may exclude certain coverages from,

or alter terms in, the reinsurance contracts NSG enters into with them.

NSG, like other insurance companies, could write insurance policies

which to some extent do not have the benefit of reinsurance protection, but these gaps in reinsurance protection expose NSG to greater

risk and greater potential losses.

reinsurance makes the reinsurer liable to NSG to the extent the risk is transferred or ceded to the reinsurer, it does not relieve NSG

(the ceding insurer) of its primary liability to policyholders.

Reinsurers may not pay claims NSG incurs on a timely basis, or they may

not pay some or all of these claims.

Any disputes with reinsurers regarding coverage under reinsurance contracts could be time consuming,

costly, and uncertain of success.

In addition, NSG’s reinsurance may be concentrated among a few reinsurance carriers, meaning

that if one or more of these reinsurers do not renew, default on payment of claims, or become insolvent, NSG could incur increased net

losses and its financial condition could be adversely affected.

or potential downgrade in NSG’s financial strength rating could adversely affect its business .

in the insurance industry use ratings from independent ratings agencies as an important means of assessing the financial strength and

quality of insurers.

Downgrades in NSG’s financial strength rating could cause NSG’s partners to choose more highly rated

increase the cost or reduce the availability of reinsurance;

limit or prevent the ability to write or renew insurance contracts;

limit access to capital markets;

increase costs of

increase costs of capital;

reduce new sales of insurance products;

increase regulatory scrutiny;

provide termination rights to reinsurers;

require reduced

pricing to remain competitive;

and increase the number or amount of policy surrenders and withdrawals by contract holders and policyholders,

among other consequences.

Performance of NSG’s investment portfolio is subject to

a variety of investment risks that could adversely affect its financial results .

NSG’s results of operations depend, in part, on the performance

of its investment portfolio, and its investments are subject to general economic conditions and market risks as well as risks inherent

to specific securities.

NSG’s primary market risk exposures are to changes in interest rates and equity prices.

Should interest

rates decline, a low interest rate environment would place pressure on NSG’s net investment income.

Increases in interest rates

could cause the values of NSG’s fixed income securities portfolios to decline, with the magnitude of the decline depending on the

duration of securities included in its portfolio and the amount by which interest rates increase.

During periods of market disruption, including periods of significantly

rising or high interest rates, rapidly widening credit spreads or illiquidity, it may be difficult to value certain of NSG’s securities

if trading becomes less frequent or market data becomes less observable.

In addition, in times of financial market disruption, certain

asset classes that were in active markets with significant observable data may become illiquid.

In those cases, the valuation process

includes inputs that are less observable and require more subjectivity and management judgment.

If NSG is forced to sell certain of its

investments during periods of market volatility or disruption, market prices may be lower than their carrying.

This could result in realized

losses, which could have a material adverse effect on NSG’s financial condition and results of operations.

It could also affect

financial ratios, brining NSG out of compliance with its credit instruments and rating agency capital adequacy measures.

NSG’s debt investments are subject to the risk that investments

may default or become impaired due to deterioration in the financial condition of the issuer, or due to deterioration in the financial

condition of an insurer that guarantees the issuer’s payments.

Downgrades in the credit ratings of fixed maturity securities (where

rated) could also have a significant negative effect on the market valuation of such securities.

Mortgage loans are subject to a variety

of risks relating to the supply and demand of leasable commercial space, creditworthiness of tenants and partners, capital markets volatility,

interest rate fluctuations and issuer defaults, among others.

NSG’s actual claims losses may exceed reserves for claims

and it may be required to establish additional reserves, which in turn may adversely impact its results of operations and financial condition .

NSG maintains reserves to cover its estimated exposure for claims relating

to its issued insurance policies.

Reserves do not represent an exact calculation of exposure, but instead represent NSG’s best estimates

using actuarial and statistical procedures.

Reserve estimates are refined as experience develops.

Because establishing reserves is an

inherently uncertain process involving estimates of future losses, future developments may require NSG to increase policy benefit reserves,

which would restrict its use of cash that might otherwise be used for other purposes, negatively affecting its results of operations,

and limit the dividends and distributions that it is able to make to the Company.

NSG is subject to minimum capital and surplus requirements, and

failure to meeting these requirements could subject it to regulatory action or other restrictions.

NSG is subject to minimum capital and surplus requirements.

to satisfy these requirements could result in regulatory action, prevent NSG from selling new business or require guarantees, all of which

could have a material and adverse impact on NSG’s competitiveness, operational flexibility, financial condition and results of operations.

Failure to satisfy these requirements could also preclude NSG from making dividends and distributions to the Company.

A decline in NSG’s risk-based capital (“RBC”)

ratio could result in in increased scrutiny by insurance regulators and rating agencies and could have a material adverse effect on its

financial condition and results of operations .

The NAIC has established model regulations that provide minimum capitalization

requirements based on RBC formulas for insurance companies.

A failure to meet these requirements could subject NSG to increased scrutiny

or corrective action imposed by insurance regulators, including limitations on its ability to write additional business, increased regulatory

supervision, or seizure or liquidation.

A decline in RBC ratio, whether or not it results in a failure to meet applicable RBC requirements,

could limit NSG’s ability to make distributions, could result in a loss of customers or new business or result in a downgrade of

NSG’s financial strength rating.

Employees of NSG or its third-party service providers may take

excessive risks which could negatively affect NSG’s financial condition and business .

The individuals who conduct NSG’s business, including its management

personnel, sales intermediaries, investment professions, and other employees, as well as employees of various third-party service providers,

make decision that could expose NSG to risk.

These include decisions such as setting underwriting guidelines and standards, product design

and pricing, determining what assets to purchase for investment and when to sell them, which business opportunities to pursue, among other

Such individuals may take excessive risks regardless of the structure of NSG’s risk management framework or its compensation

program and practices, which may not effectively deter excessive risk-taking or misconduct.

Similarly, NSG’s controls and procedures

may not be effective.

If NSG’s employees and the employees of third-party service providers take excessive risks, it could suffer

material losses in its investment portfolio, be subject to regulatory sanctions and experience harm to its reputation.

Difficult conditions in the capital markets and the U.S.

generally could materially adversely affect NSG’s business and results of operations .

The business and results of operations of domestic insurance companies

generally are materially affected by conditions in the capital markets and the U.S.

termination rights to reinsurers;

require reduced pricing to remain competitive;

and increase the number or amount of policy surrenders

and withdrawals by contract holders and policyholders, among other consequences.

of NSG’s investment portfolio is subject to a variety of investment risks that could adversely affect its financial results .

results of operations depend, in part, on the performance of its investment portfolio, and its investments are subject to general economic

conditions and market risks as well as risks inherent to specific securities.

NSG’s primary market risk exposures are to changes

in interest rates and equity prices.

Should interest rates decline, a low interest rate environment would place pressure on NSG’s

net investment income.

Increases in interest rates could cause the values of NSG’s fixed income securities portfolios to decline,

with the magnitude of the decline depending on the duration of securities included in its portfolio and the amount by which interest

rates increase.

periods of market disruption, including periods of significantly rising or high interest rates, rapidly widening credit spreads or illiquidity,

it may be difficult to value certain of NSG’s securities if trading becomes less frequent or market data becomes less observable.

In addition, in times of financial market disruption, certain asset classes that were in active markets with significant observable data

may become illiquid.

In those cases, the valuation process includes inputs that are less observable and require more subjectivity and

management judgment.

If NSG is forced to sell certain of its investments during periods of market volatility or disruption, market prices

may be lower than their carrying.

This could result in realized losses, which could have a material adverse effect on NSG’s financial

condition and results of operations.

It could also affect financial ratios, bringing NSG out of compliance with its credit instruments

and rating agency capital adequacy measures.

debt investments are subject to the risk that investments may default or become impaired due to deterioration in the financial condition

of the issuer, or due to deterioration in the financial condition of an insurer that guarantees the issuer’s payments.

in the credit ratings of fixed maturity securities (where rated) could also have a significant negative effect on the market valuation

of such securities.

Mortgage loans are subject to a variety of risks relating to the supply and demand of leasable commercial space,

creditworthiness of tenants and partners, capital markets volatility, interest rate fluctuations and issuer defaults, among others.

actual claims losses may exceed reserves for claims and it may be required to establish additional reserves, which in turn may adversely

impact its results of operations and financial condition .

maintains reserves to cover its estimated exposure for claims relating to its issued insurance policies.

Reserves do not represent an

exact calculation of exposure, but instead represent NSG’s best estimates using actuarial and statistical procedures.

Reserve estimates

are refined as experience develops.

Because establishing reserves is an inherently uncertain process involving estimates of future losses,

future developments may require NSG to increase policy benefit reserves, which would restrict its use of cash that might otherwise be

used for other purposes, negatively affecting its results of operations, and limit the dividends and distributions that it is able to

make to the Company.

is subject to minimum capital and surplus requirements, and failure to meeting these requirements could subject it to regulatory action

or other restrictions.

is subject to minimum capital and surplus requirements.

Failure to satisfy these requirements could result in regulatory action, prevent

NSG from selling new business or require guarantees, all of which could have a material and adverse impact on NSG’s competitiveness,

operational flexibility, financial condition and results of operations.

Failure to satisfy these requirements could also preclude NSG

from making dividends and distributions to the Company.

decline in NSG’s risk-based capital (“RBC”) ratio could result in increased scrutiny by insurance regulators and rating

agencies and could have a material adverse effect on its financial condition and results of operations .

NAIC has established model regulations that provide minimum capitalization requirements based on RBC formulas for insurance companies.

A failure to meet these requirements could subject NSG to increased scrutiny or corrective action imposed by insurance regulators, including

limitations on its ability to write additional business, increased regulatory supervision, or seizure or liquidation.

A decline in RBC

ratio, whether or not it results in a failure to meet applicable RBC requirements, could limit NSG’s ability to make distributions,

could result in a loss of customers or new business or result in a downgrade of NSG’s financial strength rating.

of NSG or its third-party service providers may take excessive risks which could negatively affect NSG’s financial condition and

individuals who conduct NSG’s business, including its management personnel, sales intermediaries, investment professions, and other

employees, as well as employees of various third-party service providers, make decision that could expose NSG to risk.

These include

decisions such as setting underwriting guidelines and standards, product design and pricing, determining what assets to purchase for

investment and when to sell them, which business opportunities to pursue, among other decisions.

Such individuals may take excessive

risks regardless of the structure of NSG’s risk management framework or its compensation program and practices, which may not effectively

deter excessive risk-taking or misconduct.

Similarly, NSG’s controls and procedures may not be effective.

If NSG’s employees

and the employees of third-party service providers take excessive risks, it could suffer material losses in its investment portfolio,

be subject to regulatory sanctions and experience harm to its reputation.

conditions in the capital markets and the U.S.

economy generally could materially adversely affect NSG’s business and results of

business and results of operations of domestic insurance companies generally are materially affected by conditions in the capital markets

economy generally.

An economic downturn may be characterized

by increases in inflation, higher unemployment, lower family income, lower corporate earnings, lower business investment or lower consumer

As a result, the demand for insurance products and their utilization could be adversely affected, as customers are unwilling

or unable to purchase policies, choose to defer paying insurance premiums or stop paying insurance premiums altogether, surrender their

life insurance policies for their cash value or otherwise seek to utilize the cash benefits of their policies or file property and casualty

claims at elevated rates.

Depending on their level of occurrence, these customer actions could materially adversely affect NSG’s

business and results of operations.

Climate change could have a material adverse effect on NSG’s

Climate change could have a significant impact

on longer-term natural weather trends, potentially impacting both NSG’s property and casualty insurance business and its life insurance

Rising temperatures and changes in weather patterns could impact storm frequency and severity and thereby negatively affect

claims experience, reinsurance costs and product pricing in NSG’s property and casualty insurance business.

Climate change may also

impact life expectancies, influencing mortality assumptions used in pricing and reserve calculations in its insurance business.

of the unpredictability of the long-term effects of climate change, NSG may be unable to accurately factor these effects into its assumptions

and models, and its business could suffer as a result.

An economic downturn may be characterized by increases in inflation, higher unemployment, lower family

income, lower corporate earnings, lower business investment or lower consumer spending.

As a result, the demand for insurance products

and their utilization could be adversely affected, as customers are unwilling or unable to purchase policies, choose to defer paying

insurance premiums or stop paying insurance premiums altogether, surrender their life insurance policies for their cash value or otherwise

seek to utilize the cash benefits of their policies or file property and casualty claims at elevated rates.

Depending on their level

of occurrence, these customer actions could materially adversely affect NSG’s business and results of operations.

change could have a material adverse effect on NSG’s business .

change could have a significant impact on longer-term natural weather trends, potentially impacting both NSG’s property and casualty

insurance business and its life insurance business.

Rising temperatures and changes in weather patterns could impact storm frequency

and severity and thereby negatively affect claims experience, reinsurance costs and product pricing in NSG’s property and casualty

insurance business.

Climate change may also impact life expectancies, influencing mortality assumptions used in pricing and reserve calculations

in its insurance business.

Because of the unpredictability of the long-term effects of climate change, NSG may be unable to accurately

factor these effects into its assumptions and models, and its business could suffer as a result.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors