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It took approximately one year for the insurers to provide updated modeling. And the insured agreed to pledge two additional life insurance policies as collateral.

Still, Mass Mutual, New York Life, Brian Grodin, and Hugo Tomasio did not include these for the new policies. This information was allegedly not disclosed to the insured until the first quarter of 2023. Additionally, when analyzing the collateral, Mr. Tomasio applied interest rates that did not reflect current market rates.

The principle contacted the brokers named in this CRN due to his concern the policies were underwater. And his fear that the risk was never analyzed or disclosed.  Mr. Tomasio reportedly told him, “You have nothing to worry about because if the interest rates rise then the dividend on the policy will increase, it has to.” 

It is claimed that Mr. Tomasio made overly aggressive assumptions about the collateral, and when concerns were raised about potential risks, he assured the insured that rising interest rates would increase the dividends on the policy. 

Brian Grodin, Hugo Tomasio, Michael Book allegations

These representations about rates and dividends are said to have violated Florida law.

The complaint also mentions undisclosed bonuses and referral fees that were being paid out. It was not disclosed to the purchaser or owner of the policies that individuals other than licensed life insurance agents would receive bonuses from the purchase of the insurance policies.

According to the complaint, “It was never disclosed to the purchaser or owner of the policies that individuals other than licensed life insurance agents would be receiving bonuses from the purchase of the insurance policies at issue.”

“Indeed, the individual who received the undisclosed bonus agreed to send the undisclosed bonus back to Mr. Jefferson and the Trust after he learned what Mass Mutual, New York Life, Brian Grodin, and Hugo Tomasio did.”

Finally, it is stated that the insurers have failed to provide the complete binder for each policy at issue even after closing.

The overall complaint suggests multiple alleged violations and concerns related to the sales process, misrepresentations, negligence, and failure to provide necessary information and documentation.

MassMutual Response

According to MassMutual the financing arrangements were proposed and organized by independent insurance producers.

The Trust made an agreement with JP Morgan, a lender, to finance the premiums for the policies. MassMutual, the insurance company, is not involved in this financing agreement.