### REVI SED Oc tober 23, 2013

I N THE UNI TED STATES COURT OF APPEALS

FOR THE FI F TH CI RCUI T

No. 12-51295

ELVIA CARDENAS, Plaintiff-Appellant
v. UNITED OF OMAHA LIFE INSURANCE COMPANY, Defendant-Appellee

A ppeal from the United States District Court for the Western District of Texas

Before STEWART, Chief Judge, and KING and PRADO, Circuit Judges. KING, Circuit Judge: T h i s c a s e a r ises from Defendant-Appellee United of Omaha Life I n s u r a n c e Company’s denial of Plaintiff-Appellant Elvia C ardenas’s c l a i m for benefits from

a l ife insurance p olicy t a k e n o ut by Cardenas’s daughter, Elvia Sierra. The policy lapsed a n d w a s s u b s e q u e n t l y r einstated; Sierra died thirteen m onths after the reinstatement. As required by the Texas Insurance C o de, the policy contained a provision that it would become incontestable if i t remained in force “for two years f

rom its d ate of issue during the lifetime of the insured.” Although the policy does not hav e a provision dealing with contestability following U n i t e d S t a t es C o u r t o f A p p e a l s

F i f t h C ir c u i t 

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reinstatement, the parties agree there is such a p e riod. T hey differ o ver how the deat h o f the insured during the contestability period will affect the reinstatement. The district court found that the reinstated policy never became incontestable because S i erra died before the two-year period ran. Cardenas appeals from the district court’s denial of her post-verdict motion for judgment

as a m atter of law. She argues that a section of the Texas Administrative Code controls and r equires finding that the reinstated policy became incontestable. For the following reasons, we AFFIRM the district court’s judgment.

I. FACTUAL AND PROCEDURAL BACKGROUND United of Omaha L ife I nsurance Company (“United o f Omaha”) issued a life insurance policy t o Elvia Cardenas ’s daughter, Elvia Sierra, on March 26, 2001. The policy lapsed for nonpayment of premiums in June 2005. United of Omaha reinstated t he policy on January 3, 2 0 0 6, after Sierra submitted a reinstatement applicat i o n
. 1 S i e r r a m a d e s e v e r a l m i s s t a t e m e n t s a b o u t h er health in the r einstatement application. The application required Sierra to certify that she had not lost more than ten pounds in t he prior y ear, and that in the prior five y ears, she had not u ndergone any blood tests, l a boratory t ests, or special examinations, b een ill or injured, or r e c e i ved medical or surgical advice or treatment. In fact, Sierra suffered from Crohn’s d i sease and had been hospitalized for four w eeks during J une and July 2005. She lost thirty pounds between March and July 2005, including eighteen pounds in one week. Sierra died o n February 2 0 , 2 0 0 7

. Her death c ertificate lists toxic megacolon, s epsis, cachexia, and C r o h n ’ s disease as the causes of death.

1 The reins tatem ent ap p lication required that Sierra “agree th a t [ U n ited of O m aha]
m ay rely up on the Ins ured ’s ans w ers to the f ollow ing ques tions as being true and com p lete, ” and “agree[ ] that the f oregoing inf

orm ation is the bas is f or reins tatem ent of the p olicy

. . . .”
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Cardenas f

iled a claim f

or benefits on March 26, 2007. United of Omaha denied the claim on May 14, 2007, and on May 23, 2 007, informed Cardenas that it was

r e s c inding t h e policy due to misrepresentations it found in the reinstateme n t application. Cardenas filed suit in s tate district court on February 16, 2011, claiming that United of Omaha had fai l ed to p ay t he $150,000 death benefit under the policy. United of Omaha removed the c ase to f ederal court based on diversity of citizenship. The p arties filed cross-mo t i o ns for summary judgment. In its motion, United of Omaha argued that it satisfied t h e requirements for rescinding an insurance policy procured by fraud, and that the policy remained contestable because Sierra died before the two-year period r an. Cardenas contended, inter alia , that the reinstated policy w as incontestab l e b e c a use United o f Omaha failed to contest it within the requisite two y e ars, a s p rovided by § 3.104(a) of the Texas Administrative Code, T i tle 28. T he district court d e n i e d b oth motions in a memorandum o pinion a nd order dated February 2 9 , 2012, and found that f a c t issues remained regarding whether Sierra’s misrepresentations were material and intentional. The case went t o trial on October 22, 2012. Cardenas filed a motion for judgment as a m a t t e r of l aw at the close of evidence, which the court denied. The jury returned a verdict i n favor o f U nited o f Omaha, finding t hat Sierra’s representations in the reinstatement a pplication w ere m aterial and intentional. Cardenas filed a renewed motion for j udgment as a m at t e r o f law after the verdict, contending that: (1) the insurer could not contest t h e reinstatement because the p o licy d id not p rovide for a contestability period after reinstatement; (2) § 3.104(a) of the T e xas Administrative Code provides an absolute two-year

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deadline for contesting t h e r einstatement; and (3) insufficient evidence supported the jury’s findings. The d istrict court d enied the motion a nd entered judgment for United of Omaha. Cardenas timely appealed. II. DISCUSSION Cardenas argues that the district court failed to correctly apply Texas law governi n g i n c ontestability provisions i n life i nsurance contracts a nd that the district co u r t e r r e d by expanding the interpretation of the insurance contract. We w ill address e ach argument in turn. 2 We note at the outset that we review de novo a district court’s r uling on a mot i o n f or judgment as a matter of law. Brennan’s Inc. v. Dickie Brennan & Co. , 376 F.3d 356, 362 (5th Cir. 2004). A . Incontestability Provision Cardenas’s challenge to the district court’s r u ling turns on a question of statutory construction that we also r eview de novo. F.D.I.C. v. Shaid , 142 F.3d 260, 261 (5th Cir. 1998) (per c uriam). “[W]e interpret [ a] state statute the way

we believe the state Supreme C ourt would, based on prior precedent, legislation, and relevant commentary.” Id

. (citing Transcon. Gas Pipe Line Corp. v. Transp. I n s
. Co. , 953 F .2d 985, 987–88 (5th Cir. 1 992)). We note that “[t]he text of a n administrative rule must be c onstrued under t he same principles as i f it were a statute.” T

ex. Gen. Indem. Co. v. Tex. Workers’ Comp. Comm’n , 36 S.W.3d 635, 641 (Tex. App.—Austin 2000, no pet.). At the hear t o f t h i s case is the question whether a life insurance policy, after it h as been reinstated, automatically becomes incon t e stable after two
years, or whether the i n s u r ed must s urvive that two-year period. The answer

2 Becaus e C ard enas does not challenge the s uf ficiency of the evid ence that s up p orted the jury’s f

ind ings , that is s ue is not bef ore us
. Sa m a v
. H

anni ga n , 669 F. 3d 585, 589 ( 5th Cir. 2012)

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to this question depends on how we interpret two key statutory and regulatory provisi o n s , o n e o f w h i c h expressly requires t hat in order to become incontestable,

a policy must be in force for t wo years “during t he lifetime of t he insured.” These provisions are Texas I nsurance Code § 1101.006, a nd 28 Texas A dministrative Code § 3.104(a), promulgated by the Texas Department of Insurance (“Department”). Section 1101.006 s tates that “a l i fe insurance policy m ust provide that a policy in force f

or two years from its date of i s s u e d u r i n g the lifetime of the insured is incontestable, except for n onpayment of premiums.” Tex. Ins. Code Ann. § 1101.006 (West 2003). Section 3 .104(a) ( which is set out in full below) provides, in relevant part, that “[i]f a reinstatement is c onte s t e d for misrepresentation, no representation other than o ne c ausing the reinstatement
may b e used to contest the policy, a n y c o ntest of the reinstatement may be for

a material and fraudulent misrepresentation only a nd re i n s tatement may not be c o ntested m ore than two years after it is effectuated

. . . .” 28 Tex. Admin. Code § 3.104(a) (1982) (Tex. Dep’t of Ins., Incontestable Clause). Cardenas argues t h a t § 1 1 0 1.006 and § 3.104(a) are unambiguous and part

o f a c onsistent s tatutory scheme. She urges us to find that § 3.10 4 ( a ) , w h i c h does not contain the “lifetime of the insured” language, appl i e s t o p olicy reinstatements, w hereas § 1101.0 0 6 a p plies to policy issuances. Under her read i n g , if an insurer does not contest a policy reinstatement within the two-year c o n t e s t a b i lity p eriod, then the p olicy becomes incontestable, regardless of whether or not the insured survived the two-year period. S he concludes that Sierra’s policy became incontestable and United o f Omaha cannot c hallenge it. United of Omaha urges us to find that § 1101.006 i s controlling and

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applies to p olicy reinstatements, and t hat § 3.104(a) contradicts § 1101.006 and is beyond t he Department’s authority. Therefore, it argues, the “lifetime of the insured” language applies to policy r einstatements, and since Sierra did not

s urvive for two years after reinstatement, the policy remains contestabl e indefinitely. For the r easons that fol l o w , we c onclude t h at § 1101.006 applies to reinstatements. We find § 3.104 persuasive i n reaching this conclusion, and we do not interpret § 3.104(a)’s provisions as contradicting § 1101.006. W e find that § 3

. 1 0 4 ( a ) a p p lies, subject to § 1101.006’s requirements. As a r esult, we hold that a contestability p eriod following a p olicy reinstatement is subject to the “lifetime of the insured” requirement. 1. Insurance Code § 1101.006 and Administrative Code § 3.104(a) Insurance Code § 1101.006, captioned “ Incontestability,” is t h e Insurance Code’s incontestability p rovision for life i nsurance policies. It states, i n relevant part: “ a l i f

e i n surance policy must provide t hat a policy in force for two years from its date of issue during the lifetime o f the insured is incontestable, except for n onpaymen t o f premiums.” Tex. I ns. Code Ann. § 1101.006 (emphasis added). Thus, if an insured survives the two-year “contestability period” following the issuance of a policy, then the p olicy will become incontestable for
any reason except nonpayment of premiums. Id .; contra Great Am. Reserve Ins. Co. v. Fry , 418 S.W.2d 716, 719 (Tex. Civ. App.—Austin 1967, w rit ref’d n.r.e.) (holding that an incontestability clause did not prevent an i n surer’s chal l enge to coverage of policy, as d istinguished from validity of p olicy). This bar to contestability a p p l i es even if the insured intentionally made a material misrepresentation in the policy application. Kan. Life Ins. Co. v. First Bank of

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Truscott , 7 8 S.W.2d 584, 586–87 (Tex. 1935). S e c t i o n 1101.006 does not expressly address how incontestability periods opera t e following a policy reinstatement. Section 1101.006 was c odified in 1 951 a s Texas I n s u r ance Code Article 3.44(3), 3 which provided that a life i nsurance policy “shall be incontestable not later t han two years from its date, e xcep t f or non-payment o f premiums.” Act of June 28, 1951, 52d Leg., R .S., ch. 4 9 1 , 1 9 5 1 Tex. G en. Laws 903. Article 3.44(3) was amended in 1963 to include the “ lifetime of the insured” provision, 4 Act o f J u n e 22, 1963, 58th Leg., R.S., ch. 498, 1963 Tex. Gen. Laws 1307, and

was r e codified at § 1101.006 in 2001, with n o substantive changes. 5 Acts 2001, 77th Leg., R.S., c h. 1419, 2001 Tex. Gen. L aws 3658, 4 0 4 1 (effective June 1, 2003).

3 Article 3. 44, in turn, w as bas ed on Article 4732. Tex. I ns
. Cod e art. 3. 44 ( his torical
com m ent) ( Vernon 1952)

.

4 The f ull text of Article 3. 44( 3) p rovid ed : That the p olicy, or policy and ap plication, shall cons titute the en t i r e c o n t ract betw een the p arties and s hall be incontes table a f ter i t ha s been in f

orce duri ng the l i f eti m e of t he i nsured f

or tw o ( 2) years f

rom its d ate, excep t for non- paym ent of prem ium s, and w hich p rovis ions m ay, at the op tion of the com p any, contain
an excep tion for violation of the c o n d i t i o n s of the p olicy relating to naval and
m ilitary s ervice in tim e of war. Act of June 22, 1963, 58th Leg. , R. S. , ch. 498, 1963 Tex. G en. L aw s 1307 ( em p has is ad d ed )

.

5 Article 3. 44 ap p ears to have been t h e o p e r a t i ve p rovis ion w hen U nited of O m aha is sued Sierra her p olicy on M arch 26, 2001, s ince the recod if ication w as not p as s ed until M ay 22, 2001, and w as not ef f ective until June 1, 2003. Acts 2001, 77th Leg. , R. S. , ch. 1419, 2001 Tex. Gen. Law s 4209. Since the recod if ication w as not s ubs tantive, and the f o c u s o f t h i s ap p eal has been on Article 3. 44’s current cod if ication at § 1101. 006, w e w ill ref er to § 1101. 006
as the relevant provis ion of the Ins urance C od e. 7 Case: 12-51295 Document: 00512416884 Page: 7 Date Filed: 10/23/2013No. 12-51295

The regulation at issue is § 3.104(a) o f Texas Administrative Code, Title 28, which provides: The policy m ust p rovide that i t s hall be incontestable not l ater than two years from its date as provided in the I n s u r ance Code, Article 3.44(3). If a reinstatement is conteste d for misrepresentation, n o repres e ntation other than one causing the reinstatement may be used t o c ontest the p olicy, any contest of the reinstatement may be for a materi a l and fraudulent misrepresentation only and reinstatement may n ot be c ontested more than two years after it is effectuated; provided, t his provision does not a ffect t h e company’s right to con t e s t a policy for a representation r especting the initial pol i c y i s s u a n c e o r a d i f

f e r e n t reinstatement during the incontestable period applicable to such issuance or reinstatem ent. Accidental death benefi t s a n d disability benefits need not be subject to such provision. 28 Tex. Admin. Code § 3.104(a). The regula t i on was adopted in 1976 and amended in 1982. Id

. The parties’ arguments turn on the reference to Article 3.44(3) in the first sen t e n c e , and the absence of the “lifetime of the insured” language. 2. Analysis The language o f the two sections and the caselaw l ead us to our c o nclusion that § 1 101.006 applies to policy reinstatements, that the sections are consistent with one another, and that § 3.104 applies s ubject t o § 1101.006’s provisions. In performing our analysis of the sections, “ we begin with t he words of the statute, keeping in mind that ‘the meaning of statutory language, plain o r not, depends

on c o n t e x t .’” In r e Cortez , 457 F.3d 448, 454 (5th Cir. 2006) ( quoting Brown v. Gardner , 513 U.S. 115, 118 (1994)). W e are g uided by the p rinciple that “when interpreting a s tatute, it is necessary to g ive meaning to all its words and to

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render none superfluous.” United States v. Rayo–Valdez , 302 F.3d 314, 3 18 (5th Cir. 2002). Section 1101.006 provide s f o r t h e a p p l i c a t ion of incontestability provisions in life insurance contracts. The fact t h a t it does not expressly address policy reinstatements is not enough fo r u s t o c onclude, as Cardenas urges, that the section therefore does n o t apply to reinstatements. Furthermore, § 3.104 provides persuasive authority for finding that § 1 101.006 applies to reinstatements, and that § 3.104(a) applies subject to § 1101.006’s provisions. In its opening s entence, § 3 .104(a) p r ovides that a life insurance “policy must provide that i t shall be incontestable not later t han two years f rom its date

as provided i n t he Insurance Code, Article 3.44(3) .” 28 Tex. Admin. Code § 3.104(a) (emphasis added). As noted, § 1101.006 and its predecessor, Article 3.44(3), provide that policies only become i ncontestab l e after being in force for two y e ars “during the lifetime of the insured.” Section 3.104(a)’s express reference to Article 3.44(3) suggests that § 3.104(a) is subject to § 1101.006. We find unpersuasiv e C a rdenas’s argument that the first s entence of § 3.104(a) serves “efficacy purposes” only—by r emoving the need to amend the regulation—and p lays no r ole in interpreting the remainder o f the section. Such

a r eading divorces the first sentence from the next two, a n d d e p r i v es the sentence of any meaning, r endering it s uperfluous. 6 See In re Cortez , 457 F.3d at 454. Cardenas’s proposed r e a d i n g also requires that we interpret t he first

6 Ad d itionally, the D ep artm ent ap p ears to have ad ded the p hras e, “as p rovid ed in the Ins urance Cod e, Article 3. 44( 3) , ” in its 1982 am end m ent of § 3. 104( a) , thereby clarif ying that § 3. 104( a) w as to be ap plied s ubject to Article 3. 44( 3)

. 28 Tex. Ad m in. Cod e § 3. 104, 7 Tex. Reg. 1146 ( M arch 19, 1982)

. As noted inf ra , the D ep artm ent m ad e other changes in its 1982
am end m ent lik ew is e s ugges ting that § 3. 104( a) is to be ap p lied subject to § 1101. 006. 9 Case: 12-51295 Document: 00512416884 Page: 9 Date Filed: 10/23/2013No. 12-51295

sentence as applying to policy issua n c e s o n l y and t he next two sentences as applying to policy r einstatements, a n interpretation that finds no support in the text. The other subsections of § 3.104 likewise point towards the c onclusion that § 3.104(a) is subject to § 1101.006’s “lifetime of the insured” language. Section 3.104(b) provides: Any provision which c o u l d lengthen t h e contestable period of a policy beyond two years f r om its date is p r ohibited. For e xample, the p o l i c y may not state t hat it is incontestable after t wo y ears “while the policy is continuously in force.” 28 Tex. Admin. Code § 3.104(b). I nterpreti n g § 3.104(b) w i thout r e ference to § 1101.006 would put § 3.104(b) i nto direct c onflict with the statute. A ccording to § 1 101.006, if an insured dies d uring the contestability period, then the period does not close after two years, but continues i ndefinitely ; the p olicy never b e comes incontestable. Thus, § 1101.006’s “lifetime of insured” language i s a “provision w h i c h could lengthen the contestable period of a policy beyond two
years
. . . ,” per § 3.104(b). Interpreting § 3.104(b) without reference to § 1101.006, however, would prevent policies from including the “lifetime of the insured” provision, as required by § 1101.006. Such a result r uns c ounter to both the D e p a r t m e nt’s duties, see Tex. Ins. Code Ann. § 31.002 (“[T]he department shall

. . . ensure that this code and other laws regarding insurance and insurance companies a r e e x e c u t e d

. . . .”), a nd t o § 1101.006’s position as an enacted statute, see generally S tate v. Pub. Util. Comm’n , 1 31 S

. W .3d 314, 321 (Tex. App.—Austin 2004, pet. de n ied). Therefore, subsection (b) must be read to prohibit any policy provision extending the contestable period of a policy other than a “lifetime of the insured” provision. The fact that the only valid reading

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of § 3.104(b) is s u bject to the “ lifetime of the insured” language—which is absent from the subsection—lends support to understanding § 3.104(a) to i nclude this provision, as well. 7 The text of §§ 3.104(c) and 3 .104(d) also demonstrates § 3.104’s deference t o § 1101.006. Section 3.104(c) merely restates the requirements o f §§ 1101.006(a) and 1101.006(b). Compare 28 Tex. Admin. Code § 3 .104(c), with Tex. Ins. Code A nn. §§ 1101.006(a) & (b). Section 3.104(d) anticipates policies, like t he one at issue, in which an insurer fails t o i n c l u d e a provision about a post-reinstatement contestability period: “ If t he form u nder review contains no

r eference t o contest a fter reinstatement, i t will also be a cceptable.” 8 28 T ex
. Admin. Code § 3.104(d). By stating that the Department will nonetheless accept policies that d o not reference “contest after r e i n s tatement,” this subsection makes clear t hat policies generally contain such provisions , a n d t h us become contestable following a reinstatement. The subsection may also suggest that the Department will understand all policies to contain such provisions, since it will accept even those that do not.

7 The 1976 vers ion of § 3. 104( b) ap p ears to ha v e p rovid ed that a policy “cannot s tate that it is incontes table af ter tw o years ‘d uring the lif etim e of the ins ured ’ or af ter tw o years ‘w hile the p olicy is in f orce. ’” 28 Tex. Ad m in. Cod e § 3. 104 ( 1976) , a s ref l ected i n 7 Tex. Reg. 1146 ( M arch 19, 1982) , a m ended by 28 Tex. Ad min. C od e § 3. 104 ( 1982 ) , 7 T ex. Reg. 3245 ( Sep t. 7, 1982)

. The D ep artm ent rem oved the “d uring the lif etim e of the ins ured ” prohibition in 1982, perhap s realizing belated ly that the provis ion conf li c t e d directly w ith § 1101. 006’s p red eces s or. Com

p a re 7 T ex. Reg. 1146, w i th 7 Tex. Reg. 3245. This ad d s ad d itional s up p ort f or cons id ering § 3. 104( b) to be cons is tent w ith, and s ubject to, § 1101. 006.

8 The Texas Ins urance Cod e p rovid es t h at an ins urer cannot us e certain ins urance d ocum ents , includ ing lif e ins urance p olicies , contracts , and ap p lications , until it has f iled “the f orm of the docum ent” w ith the D ep artm ent. Tex. Ins

. Cod e Ann. § 1701. 051( a) ( Wes t 2005) ( “Excep t as p rovid ed by Section 1701. 005, an ins urer m ay n o t u s e a d ocum ent d es cribed by Section 1701. 002 in this s tate unles s the form of the d o c u m ent is f iled w ith the d ep artm ent in accord ance w ith this chap ter. ”)

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As becomes clear when considering § 3.10 4 a s a w hole, not only is it consistent with § 1101.006, but it must be read in c onjunction with § 1101.006. One subsection of § 3 .104 is suggestive of including § 1101.006’s “lifetime of the insured” l a n g u a g e b y expressly citing to § 1101.006’s p redecessor; one subsection must be subject to the “lifetime of the insured” l a nguage in order to be valid; one subsection directly t r a c k s the l anguage of § 1101.006; and one subsection suggests ap p lying a contestability period following reinstatement even when the policy does not so provide. Our conclusion that § 1101.006’s “lifetime of the insured” provision applies to a reinstated policy when t he policy does n ot expressly so provide is analogous to T exas courts’ application of § 1101. 0 0 6 t o policies that fail to include an incontestability clause a t all. Hatch v. Turner , 193 S.W.2d 668, 670 (Tex. 1946) (holding, u n d e r the p redecessor statute to Article 3 .44, that “[a]lthough the incontestable clause does not appear in [the insured’s] policy, that circumstance is w holly immaterial because the statute makes the clause a p a rt of the policy,

w hether written therein or not”); A m. Nat’l Ins. Co. v. Welsh , 22 S.W.2d 1 0 6 3 , 1064 (Tex. Comm’n App. 1930, judgm’t a d o p t ed) (“By operation of law, [the predecessor s tatute’s incont e s t a b i lity provisions] a re read into a nd control the t e r m s o f every policy issued by a domestic life insurance company
. . . .”). Our

c o n clusion is a lso analogous to § 3 .104(d)’s provision t hat the Department will accept a life i nsurance policy even if it “ contains no referenc e t o c o ntest after reinstatement ,” suggesting that a policy without a post-reinstatement contestability clause may nonetheless be considered subject to one. The inclusion of the “lifetime of the insured” language is consistent with the sparse caselaw on policy reinstatements. S t ate M u t

. L i fe Ins. Co. v.

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Rosenberry , 213 S.W. 242, 245 (Tex. C omm’n App. 1919, judgm’t adopted), is the seminal case holding that a contestability period follows a policy reinstatement. 9 Since b oth parties agree that a contestability period exists here, we d o not find Rosenberry instructive beyond supporting our c o nclusion that a contestability period exists and the g e n e ral rationale, noted infra , that a n insurer should be afforded some protection when it has been defrauded. We note that Rosenberry pre-dates both § 1101.006’s a mendment in 1963 and § 3.104’s p romulgation, and that its reasoning is n ot helpful in determining whe t h e r § 1101.006’s “lifetime of the insured” language applies to reinstated policies. W e d o n o t read Rosenberry to hold, as United of Omaha urges and the district court found, that t here is never an incontestability time limit following

a reinstatement. Neither Rosenberry ’s f acts nor its language suggests such an interpretation. Further, P erry v. Bankers Life & Casualty Co. , 362 S.W.2d 213, 215 (Tex. Civ. App.—Fort Worth 1962, writ ref’d n.r.e.), casts serious doubt on
any such reading. R at h e r , Rosenberry provides that in c ases o f fraud, an equitable contestability p eriod exists following reinstatement—a fact that was not c l e a r p r ior to R o senberry , but which § 3 .104 now r e flects. A s is clear from

rea d i ng § 3 .104 i n conjunction with § 1101.006, an incontestability time limit following reinstatement does exist, and is two years, but only when an insured survives for two years following the reinstatement.

9 In Rosenberry , the court revers ed in f avor of the ins urer w hen the ins urer contes ted
a p olicy reins t a t e m ent as f raud ulent within one year of the reins tatem ent, even though the contract at is s ue did not p rovid e for a contes tability p eriod af ter reins tatem ent. 213 S. W. at 245. The court res ted its reas oning on the p rincip le that the reins tatem ent is “a new contract to p rovid e f

or a w aiver by the com pany of the forf eiture [ i. e. the lap s e] and a reins tatem ent of the p olicy. ” Id

. T he court held that the ins urer “had the right to s how that the reins tatem ent
w as s ecured by material f raud ulent r e p r e s entation, and that theref ore the contract of reins tatem ent w as void , and that the policy w as not thereby revived

. ” Id

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Perry is similarly u ninstructive in light o f s u b sequent s tatutory enactments. In P

erry , 362 S.W.2d a t 213–14, t he Texas Court of Civil Appeals reversed in favor of the a ppellant b eneficiary when the policy did not contain a post-reinstatement contestability clause, the insured died n ine mon t h s after rei n s t a t e m ent, and the insurer failed to contest the reinstatement within two
years. Because the legislature amended § 1101.006’s predecessor the year after Perry was decided to include the “lifetime of the insured” language, P e rry does not determine the outcome in this case. Given the r equirements of § 1101.006 and our reasoning above, a ny reading of Perry t o requir e a strict two-year

con t e s t a b i l i t y p e r i o d , e n d ing without regard to the insured’s survival during that period, is foreclosed. We decline to read § 3.104(a), as Cardenas urges, as codifying R osenberry, Perry , a nd “the common law reasoning that the incontestability provision [in § 1101.006] does not apply t o contracts for reinstatement of a p o licy.” The framework provided by § 1101.006 and § 3.104(a) makes clear that § 1101.006’s incontestability p rovi s i o n s apply t o r einstatements. Additionally, neither Rosenberry nor P

erry s tands for Cardenas’s proposition. The c o urts in both cases concluded that contestability period s e x i s t e d f o l l o w i n g r e i n s t a t e m e n t , e v e n w h en the policies d id not expressly s o p rovide, and neither case dealt with § 1101.006’s application to reinstatements or to § 3.104(a). We find it logical to conclude that § 1101.006 treats policy issuances and policy rei n s t a t ements in a uniform manner, when neither § 1101.006 nor § 3 .104(a) provides any reason to treat issuances and reinstatements differently. This conclusion also appears to conform with the majority rule. See 8 Appleman

on Insurance Law and Practice § 83.09 (Matthew Bender ed., 2013) (“The vast

14 Case: 12-51295 Document: 00512416884 Page: 14 Date Filed: 10/23/2013No. 12-51295

majority of jurisdictions hold that where a p o licy of life insurance is reinstated

as a result of misrepresentations, the contestable period begins to run anew.”); 17 Couch o n Insurance § 240:25 ( 3d ed.) (“In t he ab s e n c e o f a nything either in the policy or the reinstatem e n t to require a different construction, the incontestable clause is r enewed on reinstatement of the p olicy, and applies to the reinstatement a s to both p arties in the same manner and t o the same extent as it applied to the original policy.”). Finally, this r esult i s not inconsistent with the ra t i o n a l e behind incontestability clauses. See Fields v. Univ e r s al Life & Accident Ins. Co. , 424 S.W. 2 d 7 0 4 , 707 (Tex. Civ. A pp.—Houston [1st Dist.] 1968, w rit d ism’d w.o.j.); 29 Appleman § 178.03[A]. We find unpersuasive any argument that the legislature intended to protect beneficiaries, to the detriment of insurers, where the insured c ommitted fraud and failed to satisfy t he requirements of § 1101.006. Our interpretation of § 3.104(a) does not strip the secti o n o f meaning. Rather, § 3.104(a) r etains its vitality. During the two-year contestability period following reinstat e m e n t , if an insurer challenges the r einstatement for misrepresentation, § 3.104(a) requires that “no repre s entation other than one causing the reinstatement may be used t o contest the policy, [and] any contest of the reinstatement m ay be for a material and fraudulent misrepresentation only . . . .” 28 Tex. Admin. Code § 3.104(a). In sum, though our interpretation o f the relationship b etween § 1101.006 and § 3.104(a) differs from that of the district court, we conclude t hat the district court properly denied Cardenas’s motion for j udgment as a matter o f law on this issue.

15 Case: 12-51295 Document: 00512416884 Page: 15 Date Filed: 10/23/2013No. 12-51295 B. Expansion of the Contract Terms

“ [ W ] e review a district court’s interpretation of an insurance p olicy d e novo.” F.D.I.C. v. M

ijalis , 15 F.3d 1314, 1319 ( 5th Cir. 1994) (citing Harbor Ins. Co. v. Urban C o n s t r
. Co. , 990 F.2d 195, 199 (5th C ir. 1993)). Cardenas argues that the district c ourt misinterpreted the contract for t he insurance policy and expanded its terms. C a r d e n a s observes that the contract provided for a contestability period following issuance, as required by § 1101.006, but did not provide for a contestability period following r einstatement. The reinstatement application similarly did not say anything about a post-reinstatement contestability period. As a r esult, Cardenas contends, the district court erred by reading into the contract a contestability period following reinstatement. We disagree. O ur conclusion that § 1101.006’s “lifetime o f the ins ured” language applies to the contract at issue is consistent w ith § 3.104(a), as well as with caselaw a pplying § 1101.006’s predecessor to contracts that fail to provide for a contestability period following issuance. T h u s , we conclude that the district court properly denied Cardenas’s motion for judgment as a matter of law. III. CONCLUSION For the aforementioned reaso n s , the district court’s judgment is AFFIRMED. 1 0

1 0 Becaus e w e f

ind that Card enas d oes not p revail in her ap p eal, w e d o not reach the is sue rais ed in U nited of O m aha’s cond itional cros s - ap p eal of w hether the statute of lim itations bars Card enas ’s claim f or s tatutory p enalties

. 16 Case: 12-51295 Document: 00512416884 Page: 16 Date Filed: 10/23/2013