What is an interpleader action in an insurance litigation case?

An interpleader action in an insurance litigation case, which is a type of lawsuit, is a process that allows two or more parties to resolve a dispute over a single asset, such as insurance proceeds from a life insurance policy. In a typical interpleader action, an insurance company with multiple potential claimants to a single asset that is uncertain about who is lawfully entitled to it files a lawsuit called a "complaint for interpleader." The complaint names all the potential claimants and asks the court to determine which one is legally entitled to the asset. The insurance company deposits the asset with the court and pays any costs associated with the lawsuit. Once the court resolves the dispute, the court orders the appropriate claimant, known as the "preferred claimant," to receive the asset. If there is more than one preferred claimant, the court also orders that the asset be divided among the preferred claimants or held in trust. All other claimants are typically barred by the court from initiating or otherwise proceeding with a separate lawsuit.

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What is an interpleader action in an insurance litigation case?

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