FOR IMMEDIATE RELEASE

CONTACTS:

       Robert G. Schatz                      Patrick J. Haveron, CPA
       President/CEO                         Executive Vice President/CFO
       North East Insurance Company          Motor Club of America
       P.O. Box 1418                         95 Route 17 South
       Scarborough, Maine 04070-1418         Paramus, New Jersey 07653
       Tel - 207/883-2232                    Tel - 201/291-2112
                                             E-Mail - phaveron@motr.com  


  
                 MOTOR CLUB OF AMERICA TO ACQUIRE
                   NORTH EAST INSURANCE COMPANY
 
     PARAMUS, NEW JERSEY AND SCARBOROUGH, MAINE, January 26, 1999 --
MOTOR CLUB OF AMERICA, a property and casualty insurance holding company
(NASDAQ: MOTR), and NORTH EAST INSURANCE COMPANY, a property and casualty 
insurer (NASDAQ: NEIC), today announced that the respective companies have 
reached a non-binding agreement in principle for MOTR to acquire NEIC through
a merger.

     The agreement provides that NEIC shareholders will receive, at their 
individual election, (a) $3.30 per share in cash per common share of NEIC, 
(b) one common share of MOTR for each 5.25 shares of NEIC common, or 
(c) a combination thereof.  If shareholders in the aggregate elect
to exchange more than 50% of their shares for MOTR stock, there will be a
proration mechanism to reduce the aggregate percentage to 50%.

     The agreement in principle is subject to customary conditions, including 
negotiation, execution and delivery of a definitive merger agreement, and 
mutually satisfactory due diligence and documentation.  Among other conditions, 
the transaction would also require state regulatory approvals, final approval by
the Boards of Directors of both companies, and approval by the vote
of the MOTR shareholders and of the NEIC shareholders.

     Stephen A. Gilbert, President and CEO of Motor Club of America, said,
"We believe the transaction with North East offers our Company an excellent 
opportunity to begin the successful execution of our strategy to diversify 
outside the State of New Jersey.  It also provides North East shareholders with 
the opportunity to share in the future success of the combined Companies
going forward.  We feel this transaction will enhance North East's results 
while enabling it to retain its unique identity.  We look forward to working 
with the employees and agents of North East in building a prosperous future 
for both Companies."

     North East President Robert G. Schatz said, "This transaction offers our 
shareholders a significant premium for their shares  and offers our
policyholders and agents the advantages of affiliation by North East with a 
larger and stronger insurer."

     The companies anticipate entering into a definitive merger agreement in the
near future.   Under that agreement, North East would become a wholly-owned 
subsidiary of Motor Club of America, thereby joining the ranks of Motor Club of 
America Insurance Company and Preserver Insurance Company.  Although controlled 
by new owners, North East's operations will continue to be managed locally. 
Gilbert said, "We have been very impressed with the quality of North
East's management team and employees.  We expect job loss to be minimal and 
hope that North East employees will choose to remain with us after the 
acquisition.  In particular, as part of this transaction, we are pleased to 
confirm that Ronald A. Libby would stay on as Chief Operating
Officer of North East.  From the standpoint of policyholders and agents, this
merger should assure a stronger and better-rated North East."

     In connection with this transaction, North East announced that it has 
terminated the rights offering to its shareholders for common stock of the 
company. 

     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 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. 


       THIS NEWS RELEASE IS ALSO AVAILABLE AT WWW.MOTR.COM

                              ######