İnsanov is considered one of the founders of the ruling New Azerbaijan Party (YAP). He served as the Minister of Health from 1993 to the time of his arrest. At a meeting of the YAP Management Board ahead of the parliamentary elections in November 2005, Insanov voiced severely critical opinions saying that there were criminals in the government, and that incorrect policies being pursued needed to be changed, otherwise the government would be deceiving the people. In the meeting of the Management Board before the YAP Congress, Insanov continued voicing his critical opinions, saying that he was almost being made to apologize for mistakes made and incorrect policies pursued by those Insanov had invited to join the party.

Seven months prior to his arrest, in March 2005, Insanov applied to President Aliyev, requesting to resign from his position as the Minister of Health and the party. His resignation was not approved. Two months before his arrest, Insanov stated that he was being followed. He believed he was even being followed upon his departure from Baku, and appealed to the President with respect to this matter. In his appeal, Insanov stated that he was being followed by groups within the government.
Insanov was arrested sixteen days before the 2005 parliamentary elections and initially charged with plotting a coup, although he was later convicted of economic crimes. He was arrested by the Ministry of National Security and immediately sentenced to pre-trial detention. The former minister stated that he was subjected to torture at the time of his arrest, and that the torture continued in Bayil Prison, in Investigative Prison No.5, and in Prison No. 13. The investigation into the criminal case against Insanov was finalized in 2007, but his lawyers were not allowed to study and copy the case materials. Insanov was sentenced to eleven years in jail by the Baku Court of Grave Crimes on 20 April 2007. The Baku Court of Appeals upheld the ruling on 21 September 2007, and the Supreme Court upheld the ruling on 16 January 2008.

Insanov applied to the European Court of Human Rights (ECHR) under Article 3 (prohibition of torture) and Article 6 (right to a fair trial) of the European Convention of Human Rights and Fundamental Freedoms. On 14 March 2013, the ECHR recognized the violation of both rights. The Court ruled that the former minister's right for defense and other procedure rules were violated and that there was a need for additional investigation. The ordered the Azerbaijani government to pay a fine of 10,000 AZN.

Based on the ECHR ruling, on 15 November 2013, the Supreme Azerbaijani Court transferred the case to the Baku Court of Appeals for reconsideration. During the appellate hearing, Insanov voiced severely critical opinions against the government, particularly President Aliyev. During the next trial session, Insanov was held in a glass cage, and the judge did not allow him to speak (the judge turned off his microphone while he was voicing critical opinions). On 25 February 2014, the Court of Appeals upheld the eleven-year prison sentence.

PACE Resolution #1545 of 2007 called for a fair trial for Ali Insanov. A report released by former PACE co-rapporteurs for Azerbaijan Andres Herkel and Evguenia Jivkova in March 2008, and a PACE resolution of 24 July 2008, also include points of concern related to Insanov's case

We, the undersigned, ask that the government of US act aggressively to investigate this criminal act. We ask that it affirm a commitment to protect the independence of a free national Political lider İnsanov by stating its unequivocal opposition to such attempts to silence investigative Political prisioner . We ask all Azerbaijan goverment and regional media to respect Ali İnsanov privacy