8-K

                     SECURITIES AND EXCHANGE COMMISSION

                           Washington, D.C. 20549

                                  FORM 8-K

                               CURRENT REPORT


                     Pursuant to Section 13 or 15(d) of
                     the Securities Exchange Act of 1934





Date of report:  December 29, 1998
      (Date of earliest event reported)




                        NORTH EAST INSURANCE COMPANY
           (Exact name of registrant as specified in its charter)



             Maine                    0-11184               01-0278387
(State or other jurisdiction of     (Commission          (I.R.S. Employer 
 incorporation or organization)      File No.)          Identification No.)



                  482 Payne Road, Scarborough, Maine  04074
             (Address of principal executive offices) (Zip code)



Registrant's telephone number:   (207) 883-2232 


Item 5.  Other Events.

On December 29, 1998 the Registrant announced a further extension of its 
rights offering.  A copy of the Registrant's press release announcing the 
extension is filed as an exhibit to this report.


Item 6.  Financial Statements and Exhibits.

      (c)   Exhibits.

            99.1  Press release dated December 29, 1998 of
                  Registrant, announcing further extension
                  of rights offering


                                  SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the 
Registrant has duly caused this report to be signed on its behalf by the 
undersigned, hereunto duly authorized.


                                       NORTH EAST INSURANCE COMPANY


Date: December 29, 1998                By: /s/ Robert G. Schatz
                                           President and Chief
                                           Executive Officer

                              INDEX TO EXHIBITS

Exhibit
Number      Description
- -------     --------------------------------------------

99.1        Press release dated December 29, 1998 of
            Registrant, announcing further extension
            of rights offering

EX-99

                                                                EXHIBIT 99.1

                        NORTH EAST INSURANCE COMPANY
                                P.O. Box 1418
                        Scarborough, Maine 04070-1418
           Tel - 207/883-2232   Fax - 207/883-1564   www.neins.com

For Immediate Release

Contact:    Robert G. Schatz
            President/Chief Executive Officer


                        NORTH EAST INSURANCE COMPANY
                           EXTENDS RIGHTS OFFERING

SCARBOROUGH, MAINE, December 29, 1998 -- NORTH EAST INSURANCE COMPANY 
(NASDAQ Symbol: NEIC) today announced that it has further extended its 
rights offering.  The offering is now scheduled to expire at 5:00 p.m. 
Eastern time on Tuesday, January 12, 1999.

As announced last week, North East has received a revised offer to acquire 
the company, through an exchange of shares at a specified ratio. The offer, 
made by Motor Club of America (Nasdaq: MOTR) ("MCA"), is non-binding and is 
subject to numerous conditions including termination of North East's pending 
rights offering.

"Our Board is in the process of evaluating MCA's offer," said Robert G. 
Schatz, President of North East. "In the meantime, we have decided to extend 
the rights offering for another two weeks."

Under the pending rights offering, shareholders who owned NEIC common stock 
on November 9, 1998 may subscribe for additional shares at $2.25 per share.

North East Insurance Company is a property and casualty insurer located in 
Scarborough, Maine.  Its common stock has been publicly traded since 1981.