Northeast Insurance forced to file for bankruptcy

Bermuda-registered Northeast Insurance Company (NIC), a captive insurer for several major New York hospitals, has filed for Chapter 15 voluntary bankruptcy protection in New York.

According to numerous news reports the insurer claimed that a flood of claims under New York’s Child Victims Act (CVA) was the cause of it becoming insolvent.

It was reported that in an earlier filing with Bermuda’s Supreme Court the company said that in 2017 it decided to cease underwriting new risks and to start to run off its existing liabilities. However, NIC is now understood to be facing fresh losses due to the impact of the CVA.

On the 15th of October lawyers for NIC filed a string of legal motions at the New York Southern Bankruptcy Court, including an application for ex parte relief for the scheduling of a hearing on the verified petition of Northeast Insurance Company.

The case has been assigned to Judge Michael E. Wiles.

A hearing has now been scheduled for the 13th of November for the next stage of the legal proceedings.

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