The insurers were informed of this requirement on every call, with the understanding that only the proceeds from the $13 million collateral pool would be used to pay $300,000 per year on the policies. However, it is alleged that the insurers and their agents did not adequately test the models presented to the insured and provided inaccurate numbers.
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.”
