Petitioner John Hancock Mutual Life Insurance Company (Hancock) and respondent Harris Trust and Savings Bank (Harris), the current trustee of a corporations retirement plan, are party to Group Annuity Contract No. 50 (GAC 50), an agreement of a type known as a "participating group annuity." Under such a contract, the insurer commingles with its general corporate assets deposits received to secure retiree benefits, and does not immediately apply those deposits to the purchase of annuities. During the life of the contract, however, amounts credited to the deposit account may be converted into a stream of guaranteed benefits for individual retirees. Funds in excess of those that have been so converted are referred to as "free funds." Dissatisfied over its inability to gain access to GAC 50s free funds, Harris filed this suit pursuant to, inter alia, the Employee Retirement Income Security Act of 1974 (ERISA), alleging that Hancock is managing "plan assets," and therefore is subject to ERISAs fiduciary standards in its administration of GAC 50. Hancock responded that its undertaking fits within the ERISA provision, 29 U.S.C. 1101(b)(2)(B), that excludes from "plan assets" a "guaranteed benefit policy," defined as an insurance policy or contract "to the extent that [it] provides for benefits the amount of which is guaranteed by the insurer." The District Court granted Hancock summary judgment on the ERISA claims, holding that it was not a fiduciary with respect to any portion of GAC 50. Reversing in part, the Court of Appeals held that the "guaranteed benefit policy" exclusion did not cover Page II the GAC 50 free funds, as to which Hancock provides no guarantee of benefit payments or fixed rates of return.

Held:

Because the GAC 50 free funds are "plan assets," Hancocks actions in regard to their management and disposition must be judged against ERISAs fiduciary standards. Pp. 7-24.

(a) The import of the pertinent ERISA provisions, read as a whole and in light of the statutes broad purpose of protecting retirement benefits, is reasonably clear. In contrast to other ERISA provisions creating unqualified exemptions from the statutes reach, Congress specifically instructed, by the words of limitation it used in 1101(b)(2)(B), that the guaranteed benefit policy exclusion be closely contained: the deposits over which Hancock is exercising authority or control under GAC 50 must have been obtained "solely" by reason of the issuance of "an insurance policy or contract" that provides for benefits "the amount of which is guaranteed," and even then the exemption applies only "to the extent" that GAC 50 provides for such benefits. Pp. 7-9.

(b) The Court rejects Hancocks contention that, because Congress reserved to the States primary responsibility for regulating the insurance industry, ERISAs requirement that a fiduciary act "solely in the interest of . . . participants and beneficiaries and . . . for the exclusive purpose of . . . providing benefits," 1104(a)(1)(A)(i) (emphasis added), must yield to conflicting state law requirements that an insurer managing general account assets consider the interest of, and maintain equity among, all of its contractholders, creditors, and shareholders. The McCarran-Ferguson Act - which provides, among other things, that no federal "Act . . . shall be construed to . . . supersede any [state] law . . . enacted . . . for the purpose of regulating the business of insurance . . . unless such Act specifically relates to the business of insurance" - does not support Hancocks contention, since ERISA and the guaranteed benefit policy provision obviously and specifically "relat[e] to the business of insurance." Moreover, although state laws concerning an insurers management of general account assets "regulat[e] insurance" in the words of ERISAs savin