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:  March 16, 1999
       (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 March 17, 1999 the Registrant and Motor Club of America announced the 
signing of a definitive merger agreement.  The merger agreement is dated as 
of March 16, 1999.  A copy of the merger agreement and a copy of the 
parties' joint press release are filed as exhibits to this report.


Item 6.  Financial Statements and Exhibits.

    (c)  Exhibits.

         99.1  Agreement and Plan of Merger between the
               Registrant and Motor Club of America, 
               dated as of March 16, 1999; incorporated
               herein by reference to Exhibit 2 to Form 8-K
               filed by Motor Club of America (Commission
               File No. 0-671) on March 18, 1999

         99.2  Press release dated March 17, 1999 of
               Registrant and Motor Club of America,
               announcing execution of Agreement and 
               Plan of Merger


                                  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: March 19, 1999                   By: /s/ Robert G. Schatz
                                           President and Chief
                                           Executive Officer

                              INDEX TO EXHIBITS

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

99.1        Agreement and Plan of Merger between the
            Registrant and Motor Club of America, 
            dated as of March 16, 1999; incorporated
            herein by reference to Exhibit 2 to Form 8-K
            filed by Motor Club of America (Commission
            File No. 0-671) on March 18, 1999


99.2        Press release dated March 17, 1999 of
            Registrant and Motor Club of America,
            announcing execution of Agreement and 
            Plan of Merger

EX-99.2

                                                                   EXHIBIT 99.2

               MOTOR CLUB OF AMERICA AND NORTH EAST INSURANCE
                     COMPANY REACH DEFINITIVE AGREEMENT


PARAMUS, N.J. and SCARBOROUGH, Maine, March 17 -- Motor Club of America 
(Nasdaq: MOTR), a property and casualty insurance holding company, and 
North East Insurance Company (Nasdaq: NEIC), a property and casualty 
insurer, today announced that they have signed a definitive agreement for 
MOTR to acquire NEIC through a merger.

The terms of the agreement are as first announced on January 26, 1999 
wherein NEIC shareholders will receive, at their individual election, (a) 
$3.30 per share of NEIC common stock, (b) one share of MOTR common stock 
for each 5.25 shares of NEIC common stock, or (c) a combination thereof. If 
the NEIC shareholders in the aggregate elect to exchange more than 50% of 
their shares for MOTR stock, the aggregate percentage will be ratably 
reduced to 50%.

Consummation of the merger is subject to the satisfaction of certain 
conditions set forth in the merger agreement, including approval from the 
shareholders of MOTR and NEIC shareholders and authorization by state 
insurance regulators. Both MOTR and NEIC expect that these conditions will 
be satisfied in due course.

Stephen A. Gilbert, President and CEO of Motor Club, said, "We are very 
pleased to reach a definitive merger agreement with North East. We look 
forward to working with Ron Libby and the Maine-based North East team once 
all of the necessary regulatory and shareholder approvals are received. We 
together believe that the merger will enable North East to enhance its 
profitability and prospects by diversifying product offerings, reducing its 
expense ratio and strengthening its distribution system."

The parties also announced that, upon effectiveness of the merger, Ronald 
A. Libby will become President, Chief Operating Officer and a Director of 
North East. Mr. Libby has been Chief Operating Officer of NEIC since 
December 1994.

Ron Libby stated, "We have a partner in Motor Club which is committed to 
maintaining North East as an independent operation with a Maine presence. 
Our merger with Motor Club will only serve to strengthen our financial 
position and ability to compete in Maine and the nearby region for both 
personal and commercial lines business."

The conclusion of the merger will also mark the end of the direct 
involvement of Robert G. Schatz, North East's President and CEO for the 
last ten years. "North East's shareholders and policyholders are now able 
to look at a solid organization as a result of Bob's leadership," stated 
Ron Libby. "His efforts and vision have remade North East and enabled this 
merger to proceed -- we all owe him a sincere debt of gratitude," Libby 
added.

Cochran, Caronia & Co. is serving as financial advisor to Motor Club of 
America. Sandler, O'Neill & Partners, L.P. is serving as financial advisor 
to North East.

Motor Club of America is a property and casualty insurance holding company 
for Motor Club of America Insurance Company, which writes personal 
automobile insurance, and Preserver Insurance Company, which writes small 
commercial and homeowners insurance. Both subsidiaries are separately rated 
B+ (Very Good) by A.M. Best, a widely recognized insurance rating and 
information service.

North East Insurance Company is a property and casualty insurer located in 
Scarborough, Maine. North East is rated B- (Fair) by A.M. Best. Its common 
stock has been publicly traded since 1981.

FORWARD-LOOKING STATEMENT DISCLAIMER. This press release contains 
statements that are not historical facts and are considered "forward-
looking statements" (as defined in the Private Securities Litigation Reform 
Act of 1995), including statements concerning the expected benefits of the 
merger and the expected future satisfaction of conditions to consummation 
of the merger. Consummation of the merger and future benefits therefrom 
involve various risks and uncertainties, including the risk of material 
adverse changes in financial markets or the condition of MOTR and NEIC; 
risks of the imposition of unanticipated regulatory conditions to the 
merger; risks associated with MOTR's and NEIC's entry into new markets; and 
state regulatory and legislative actions which can affect the profitability 
of certain lines of business and impede the companies' ability to charge 
adequate rates.