State Farm Life Insurance Co. v. Martinez

It has long been the rule in Texas that if an insurer promptly interpleads policy proceeds, it cannot be subjected to statutory penalties for delayed payment even if it missed the statutory deadlines. The Legislature’s 1991 changes to the Insurance Code suggest the courts should not continue imposing a different deadline. But nothing in those changes suggests that statutory penalties should apply after interpleader occurs. Thus, we hold the court of appeals here properly imposed statutory penalties for the delay before interpleader was filed, but improperly imposed them thereafter.

I.…