Coaction Specialty Management and three affiliated carriers have sued eMaxx Insurance Services over a captive programme they say broke down and left them facing losses of more than $10 mn.
The complaint, filed in the US District Court for the Southern District of New York, centres on eCaptive PC3-IC Inc. and its member programme, PC3.
Coaction and the other plaintiffs agreed to serve as fronting carriers for PC3. They issued policies to PC3 members, and PC3 then reinsured those same policies. The structure looked straightforward on paper. The lawsuit says it did not stay that way.
The four plaintiffs operate under Coaction Global. They include New York Marine and General Insurance, Gotham Insurance, and Southwest Marine and General Insurance. Together, they handled the fronting arrangement, the reinsurance layer, and the related collateral structure.
Under the agreement, Coaction expected to recover a substantial share of paid losses and expenses through reinsurance from PC3.
PC3, in turn, was meant to secure those obligations through a trust account established for Coaction’s benefit.
eMaxx acted as captive manager for PC3. The agreement assigned it responsibility for monitoring PC3’s solvency and calling for additional collateral when required.
The plaintiffs say eMaxx failed to carry out those duties. They claim the company did not bring in enough members to support the captive and also failed to collect more collateral as PC3’s financial position weakened.
The complaint also says eMaxx and its general counsel, John Ferrante, interfered with the trust in December 2023. The carriers say they tried to withdraw funds through the trust mechanism to recover amounts they believed were owed. In response, the filing says, eMaxx threatened legal action and regulatory consequences.
Coaction says it then had to take a penalty on its required annual statement.
The insurers say they made another attempt in mid-2025 to address the funding shortfall and requested documents to support capital calls.
The complaint adds that Ferrante made statements the plaintiffs describe as knowingly false and aimed at deflecting attention from eMaxx’s alleged breach.
The plaintiffs also accuse eMaxx of withholding tens of thousands of dollars they say belong to Coaction. The suit says eMaxx threatened to send the money to a law firm instead of remitting it to the carriers, despite payment obligations the plaintiffs describe as clear.
The insurers are asking the court for at least $10.05 mn. That total includes $4.04 mn in unreimbursed indemnity and defence costs they attribute to eMaxx’s conduct.
They also want access to eMaxx’s books and records. In addition, they are seeking an order requiring PC3 to meet its reinsurance obligations by depositing $10.05 mn into the trust account. The complaint also asks for punitive damages, with the amount to be determined at trial.
eMaxx has denied the allegations. The company said by email that outside counsel will file a response.
