Battle: Ali Rizavi is taking insurer Royal London to court for the interest he claims he is owed
Acadamic Ali Rizavi is determined to get one of Britain’s biggest insurers to play fair and deliver him full financial justice following the murder of his mother while on a trip to Pakistan nearly six years ago.
Royal London has consistently played hardball with 40-year-old Ali since he made a claim on two of its life policies that his mother – Dr Raazia Ajmal – took out three years before her death.
He is now taking the mutual insurer to court to demand more than £100,000 of interest he believes is owed due to the protracted delays in settling the claim.
Royal London has put Ali through the mill. It has employed an investigator to interrogate him in London. It then questioned the wider family in Pakistan about Ali’s relationship with his mother.
At one stage, it suggested that Raazia – a retired doctor – was not resident in the UK when she took out the life policies to cover loans on properties she owned, thereby invalidating the cover.
These and other enquiries contributed to a delay of two and a half years before the insurer, led by chief executive Phil Loney who was paid £3.2 million last year, agreed to pay the £800,000 sum assured.
Ali insists he provided all the evidence requested by June 2014 – yet a further nine months passed before the claim was settled.
It is usual for insurers to add interest following a delay in meeting a claim. Royal London chose to apply two levels – 0.5 per cent for the period that elapsed between Raazia’s death in October 2012 and when probate was settled on August 21, 2014 – and then 8 per cent from that date until the payout was finally made in May 2015.
Ali believes Royal London should pay 8 per cent for the entire time of the delay. This is the statutory rate applied by the Financial Ombudsman Service in cases involving disputed insurance claims.
The Oxford masters graduate took his case to the Ombudsman in November 2015. But it ruled it was not its job to determine whether the interest rate was ‘reasonable’.
Two men were put on trial in Pakistan for Dr Ajmal’s murder – neither of whom was a beneficiary of her will. But no one has been convicted
Ali has now decided to pursue the insurer through the courts. He says: ‘I feel like David against the Goliath that is Royal London.’
Ali’s case against Royal London is due to be heard at London’s Central County Court on September 17. He is demanding missing interest of £108,000 – plus interest since the payout was made as well as costs.
He is fighting for the additional money ‘out of principle’. He says: ‘Every silent voice emboldens these large companies. I refuse to suffer Royal London’s impunity in silence.’
Ali says the insurer’s aggressive stance, including sending letters that could be read as implying his possible implication in his mother’s death, has taken its toll on his physical and mental health.
Ali was pushed to the brink in December 2013 when Royal London defended the payment delay. It stated: ‘From a public policy point of view an insurer could be criticised if it were to pay out a life policy to someone who was later said to be implicated in the bringing about of the insured event.’
Two men were put on trial in Pakistan for Dr Ajmal’s murder – neither of whom was a beneficiary of her will. But no one has been convicted due to lack of evidence and the case has been left open. Meanwhile, Ali has been diagnosed with post-traumatic stress disorder and unable to continue his work.
Royal London maintains the lower interest rate was applied because of the delay in probate being granted – an issue it had no control over. Ali contends it was the insurer’s ‘mismanagement of the claim’ that held up the process.
A Royal London spokesperson says: ‘We are sorry for the delay Ali Rizavi faced as the beneficiary of his late mother’s will, but this was due to an ongoing police investigation into her death and completion of the probate process.’
AN EXPERT’S OPINION
Expensive television advertising by wealthy insurance companies encourages viewers to take out life cover to protect themselves and their families in case the worst happens. Industry figures show 99 per cent of life insurance claims are met. For critical illness – where the policyholder is paid if diagnosed with a serious condition – it is 92 per cent.
But what many people do not realise is that insurers do not always behave as you would expect, dragging their heels over payouts or rejecting claims altogether.
Jan Trainor fought her own battle and won
Specialist lawyer Jan Trainor, from BTW Solicitors in the Wirral, deals with 100 cases a year where insurers are attempting to wriggle out of meeting claims on protection policies. Trainor became involved in disputed insurance claims when her own partner was diagnosed with terminal cancer and his insurance claim was turned down. She fought insurer Scottish Widows and won.
Often the only redress for policyholders is to take any dispute to the Financial Ombudsman Service – though it only has the authority to recommend awards of up to £150,000. If a claim is for a higher amount they rely on the insurer to do the right thing. Some insurance companies act tough by refusing to confirm whether they intend to follow the Ombudsman’s recommendations.
For the policyholder though, the decision is binding if he or she accepts the Ombudsman’s decision. Trainor adds: ‘Once you accept, you do not have the right to take it further.’
Often the bereaved or sick are faced with unsympathetic insurance claims handlers.
Trainor has seen documents where policyholders’ answers to insurers’ questions have subjective remarks written against them such as: ‘Does not ring true’.
Recently, she has dealt with two critical illness cases where policyholders were terminally ill but had been denied payouts. In both cases they were being given radiation treatment – one of them, a mother of three in her late-40s, is now in a hospice.
She says: ‘Both insurers said they wanted to review the situation after radiotherapy.’
Trainor, for no fee, chased both insurers, including contacting directly the chief executive of one of the firms. Both paid up after her intervention. She says: ‘All too often the starting position that insurers take is that customers are lying.’
Roshani Hewa, of the Association of British Insurers, said: ‘Insurers are committed to keeping delays to a minimum.
‘Both life and critical illness claims are usually paid within a month.’
How the ‘rules of forfeiture’ prevent a criminal from cashing in on a life insurance policy following murder
Rumbled: John and Anne Darwin were pictured in Panama
When it comes to life insurance claims, murder is rarely a factor. It only becomes an issue if the deceased was murdered by someone who would benefit from the policy.
When this happens the ‘rules of forfeiture’ apply, which essentially mean an individual cannot benefit financially from his or her own criminal act.
Whether or not the sum assured can be paid to someone else instead depends on how the policy has been set up.
In terms of ‘suspicious’ claims, a more likely scenario for a delay in payment is where the life assured has not died at all and all the evidence in support of the claim is fake.
These cases are normally moved forward by expert investigators whose aim is to either uncover fraud or prove the claim to be genuine.
In 2002, former prison officer and teacher John Darwin was presumed dead as a result of a canoeing accident, leading to the payment of a life insurance claim to his wife Anne. Five years later he turned up alive, claiming amnesia.
But the couple were rumbled when a photo taken of them in Panama in 2006 was found on the internet. The pair were imprisoned for obtaining insurance money illegally.
In recent years the insurance industry has attempted to speed up the payment of life policy claims where there is proof of death and the death certificate reveals no unusual circumstances. Sometimes a part payment will be made before probate is granted.
Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.