A Bermuda-based captive insurer providing coverage to several New York hospitals linked to a prominent Jewish nonprofit organization has declared insolvency, citing significant financial strain from numerous child sexual abuse claims filed under New York’s Child Victims Act (CVA).
Northeast Insurance Co. has initiated a “winding-up” proceeding in Bermuda’s Supreme Court and concurrently filed for Chapter 15 bankruptcy recognition in a federal court in New York, requesting acknowledgment of the Bermuda liquidation process.
This bankruptcy filing follows eight years after Northeast ceased underwriting new policies in December 2017 and began managing the run-off of existing liabilities, as noted in the court documents. However, the insurer states it is unable to fulfill obligations related to policies issued prior to 2017.
By June 2025, Northeast was facing 30 lawsuits related to child abuse, a number that increased to 53 by August. This unexpected influx of claims caused the company’s total loss reserves and anticipated loss expenses to nearly double—from $15.7 million to $29.1 million—an amount it concedes it cannot cover.
The board of directors has concluded that Northeast is insolvent both in terms of cash flow and on its balance sheet and lacks the capacity to secure sufficient capital to settle all anticipated CVA-related claims.
Ownership of the company is shared by five health-focused nonprofit entities associated with the UJA/Federation of Jewish Philanthropies of New York. Additionally, Northeast maintains affiliations through common shareholders with FFH Insurance Co.
Founded in 1975, the insurer was established to underwrite and reinsure medical malpractice, general liability, auto liability, directors and officers liability, and workers’ compensation policies for hospitals, camps, nursing homes, and other nonprofits linked to the UJA. Between 2012 and 2015, Northeast also provided reinsurance for FFH Insurance Co. covering hospital professional liability and general liability, but these agreements were terminated in 2017.
Notable hospitals insured by Northeast include Mount Sinai, Montefiore, Beth Israel, Maimonides, and Center Light Health System.
The New York Child Victims Act, enacted in 2019, reopened the window for survivors to bring civil lawsuits over previously time-barred child sexual abuse claims, allowing cases to be filed until the victim reaches 55 years old. Numerous institutions, including churches, schools, hospitals, municipalities, and individuals such as coaches and doctors, have faced litigation under the CVA. The wave of claims has led several Catholic dioceses to file for bankruptcy protection.