The Battle: Ali Rizvi is suing the Royal London Insurance Company for the interest he claims he owes
Academic Ali Rizvi is determined to get one of Britain’s largest insurance companies to play fair and provide him with full financial justice after his mother was murdered during a trip to Pakistan nearly six years ago.
Royal London has always been tough with 40-year-old Ali since he made a claim on two of her life policies that his mother – Dr Razia Ajmal – had held three years before her death.
He is now taking the joint insurance company’s case to court claiming more than £100,000 in interest which he believes is due due to long delays in settling the claim.
Royal London put me on the windmill. She has hired a detective to question him in London. Then the wider family in Pakistan was questioned about Ali’s relationship with his mother.
At one point, she pointed out that Raazia – a retired doctor – was not resident in the UK when she pulled out her life insurance policies to cover her property loans, voiding the cover.
These and other inquiries contributed to a two-and-a-half-year delay before the insurer, led by chief executive Phil Looney, who took out £3.2m last year, agreed to pay out a guaranteed £800,000.
Ali insists he had submitted all required evidence by June 2014 – yet it was another nine months before the suit was settled.
It is usual for insurance companies to add interest after a delay in satisfying a claim. Royal London chose to apply two levels – 0.5 per cent for the period between Raazia’s death in October 2012 and when the will was settled on August 21, 2014 – and then 8 per cent from that date until the payment was finally made in May 2015.
Ali believes Royal London should pay 8 per cent for the duration of the delay. This is the statutory rate applied by the Financial Ombudsman Service in cases involving disputed insurance claims.
The Oxford graduate took his case to the Ombudsman in November 2015. But he ruled that it was not his business to determine whether the interest rate was ‘reasonable’.
Two men have been put on trial in Pakistan for the murder of Dr. Ajmal – neither of them taking advantage of her will. But no one was convicted
Ali has now decided to go after the insurance company through the courts. “I feel like the royal David against Goliath in London,” he says.
Ali v Royal London is due to be heard at Central London County Court on September 17. He claims £108,000 forfeited – plus interest since damages were paid in addition to costs.
He is fighting for the extra money “on principle”. “Every silent voice encourages these great corporations,” he says. “I refuse to suffer in silence the immunity of Royal London.”
Ali says the insurance company’s aggressive attitude, including sending letters that could be read as indicating his possible involvement in his mother’s death, has affected his physical and mental health.
Ali was pushed to the brink in December 2013 when Royal London pleaded with a delay in payment. It stated: “From the point of view of public policy, an insurance company can be criticized if it will pay the life policy of a person who is later said to have been involved in causing the insured event.”
Two men have been put on trial in Pakistan for the murder of Dr. Ajmal – neither of them taking advantage of her will. But no one was convicted due to lack of evidence and the case was left open. Meanwhile, Ali is diagnosed with post-traumatic stress disorder and is unable to continue his work.
Royal London maintains that the lower interest rate was applied because of delays in granting bequests – an issue over which it has no control. Ali asserts that it was the insurance company’s “mismanagement of the claim” that halted the process.
A Royal London spokesperson says: “We regret the delay Ali Rizvi has faced as beneficiary of his late mother’s will, but this has been due to the ongoing police investigation into her death and completion of probate formalities.”
Expensive television advertisements by wealthy insurance companies encourage viewers to cover for life to protect themselves and their families should the worst happen. Industry figures show 99 percent of life insurance claims are satisfied. For critical illness – where the policyholder is paid if a serious condition is diagnosed – it is 92 per cent.
But what many people don’t realize is that insurance companies don’t always act as you would expect, being slow to pay out claims or rejecting claims outright.
Jan Trainor fought her own battle and won
Specialist solicitor Jean Trainor, of BTW Solicitors in Wirral, handles 100 cases a year where insurers try to wriggle out of claims on protective policies. Trainor became involved in disputed insurance claims when her partner was diagnosed with terminal cancer and his insurance claim was denied. The Scottish Widows Insurance Company fought and won.
Policyholders’ only compensation is often to refer any dispute to the Financial Ombudsman Service – although it only has the power to recommend awards of up to £150,000. If the claim is for a higher amount, they are counting on the insurance company to do the right thing. Some insurers act sternly by refusing to confirm whether they intend to follow the ombudsman’s recommendations.
For the policyholder, the decision is binding if he or she agrees with the Ombudsman’s decision. “Once you’re accepted, you don’t get to take it any further,” Trainor adds.
Unsympathetic insurance claims handlers are often encountered by the bereaved or ill.
Trainor has seen documents in which policyholders’ answers to insurers’ questions contain self-remarks written against them such as: “It doesn’t sound right.”
Recently, I handled two critical illness cases where policyholders were terminally ill but denied compensation. In both cases they were receiving radiotherapy — one of them, a mother of three in her late 40s, is now in a hospice.
“The two insurance companies said they wanted to review post-radiotherapy,” she says.
Trainor, without a fee, went after both insurance companies, including calling directly the CEO of one of the companies. They both paid after her intervention. “Often the principled position insurers take is that customers lie,” she says.
Roshani Hewa, of the Confederation of British Insurers, said insurers were committed to minimizing delays.
Life and critical illness claims are usually paid within a month.
How the “Forfeiture Rules” prevent a criminal from benefiting from a life insurance policy after a murder
Upside down: John and Anne Darwin are photographed in Panama
When it comes to life insurance claims, murder is rarely a factor. It only becomes an issue if the deceased is murdered by someone who benefits from the policy.
When this happens, “forfeiture rules” apply, which basically mean that an individual cannot benefit financially from their criminal act.
Whether or not the guaranteed amount can be paid to someone else depends instead on how the policy is set up.
For “suspicious” claims, the most likely scenario for a delay in payment is that the insured did not die at all and all of the evidence supporting the claim is forged.
These cases are usually pushed forward by expert investigators who aim to either uncover fraud or prove the allegation true.
In 2002, former prison officer and teacher John Darwin was presumed dead as a result of a rowing accident, prompting a life insurance claim for his wife, Ann. Five years later, he appears alive, claiming amnesia.
But the couple was stunned when a photo taken of them in Panama in 2006 was found online. The couple was imprisoned for illegally obtaining insurance money.
The insurance industry has in recent years attempted to speed up payment of claims for a life insurance policy where there is evidence of death and the death certificate does not disclose unusual circumstances. Sometimes a partial payment is made before the bequest is granted.
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