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<SEC-DOCUMENT>0000891092-04-001201.txt : 20040309
<SEC-HEADER>0000891092-04-001201.hdr.sgml : 20040309
<ACCEPTANCE-DATETIME>20040309165544
ACCESSION NUMBER:		0000891092-04-001201
CONFORMED SUBMISSION TYPE:	N-14 8C
PUBLIC DOCUMENT COUNT:		2
FILED AS OF DATE:		20040309

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			MUNIYIELD INSURED FUND INC
		CENTRAL INDEX KEY:			0000883412
		IRS NUMBER:				223165131
		STATE OF INCORPORATION:			NJ
		FISCAL YEAR END:			1031

	FILING VALUES:
		FORM TYPE:		N-14 8C
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-113433
		FILM NUMBER:		04657980

	BUSINESS ADDRESS:	
		STREET 1:		800 SCUDDERS MILL ROAD
		CITY:			PLAINSBORO
		STATE:			NJ
		ZIP:			08530
		BUSINESS PHONE:		6092822800
</SEC-HEADER>
<DOCUMENT>
<TYPE>N-14 8C
<SEQUENCE>1
<FILENAME>e17165n14.htm
<DESCRIPTION>FORM N-14
<TEXT>
<html>
<head>
<title> </title>
</head>
<body>

<p><table width=600><tr>
    <td  align=center><font size=2><B>As filed with the Securities and Exchange
      Commission on March 9, 2004</B></font></td>
  </tr></table>

<p><table width=600><tr>
    <td align=right><font size=2><B>Securities Act File No. 333-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
      Investment Company Act No. 811-6540</B></font></td>
  </tr></table>

<p><table width=600><tr><td  align=center><font size=3><B>SECURITIES AND EXCHANGE
COMMISSION<BR>Washington, D.C. 20549</B></font></td></tr></table>

<table width=600>
  <tr>
    <td>
      <hr size=1 noshade align=CENTER width=150>
    </td>
  </tr>
</table>
<table width=600><tr>
    <td  align=center><font size=3><font size="4"><b>FORM N-14</b></font><B><BR>
      REGISTRATION STATEMENT<BR>
      UNDER<BR>
      THE SECURITIES ACT OF 1933</B></font></td>
  </tr></table>

<table width=600>
  <tr>
    <td>
      <hr size=1 noshade align=CENTER width=150>
    </td>
  </tr>
</table>
<table width=600>
  <tr>
    <td valign=top>&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td align="center"><b><font size="2">Pre-Effective Amendment No. </font></b></td>
    <td align="center"><font size="2">|_|</font></td>
  </tr>
  <tr>
    <td valign=top>&nbsp;</td>
    <td align="center"><b><font size="2">Post-Effective Amendment No. </font></b></td>
    <td align="center"><font size="2">|_|</font></td>
  </tr>
</table>
<table width=600>
  <tr>
    <td align=center><font size=1><b>(Check appropriate box or boxes)</b></font></td>
  </tr>
</table>
<table width=600>
  <tr>
    <td>
      <hr size=1 noshade align=CENTER width=150>
    </td>
  </tr>
</table>
<table width=600><tr>
    <td  align=center><font size=4><b>MuniYield Insured Fund, Inc.</b></font></td>
  </tr></table>

<table width=600><tr>
    <td  align=center><font size=2><B><font size="1">(Exact Name of Registrant
      as Specified in its Charter)</font></B></font></td>
  </tr></table>

<table width=600>
  <tr>
    <td>
      <hr size=1 noshade align=CENTER width=150>
    </td>
  </tr>
</table>
<table width=600><tr><td  align=center><font size=2><B>(609) 282-2800<BR>
      <font size="1">(Area Code And Telephone Number)</font></B></font></td>
  </tr></table>

<table width=600>
  <tr>
    <td>
      <hr size=1 noshade align=CENTER width=150>
    </td>
  </tr>
</table>
<table width=600><tr><td  align=center><font size=2><B>800 Scudders Mill Road<BR>
Plainsboro, New Jersey 08536<BR>
      <font size="1">(Address Of Principal Executive Offices: Number, Street,
      City, State, Zip Code)</font></B></font></td>
  </tr></table>

<table width=600>
  <tr>
    <td>
      <hr size=1 noshade align=CENTER width=150>
    </td>
  </tr>
</table>
<table width=600><tr><td  align=center><font size=2><B>Terry K. Glenn<BR>MuniYield
Insured Fund, Inc.<BR>
      800 Scudders Mill Road, Plainsboro, New Jersey 08536<BR>
      <font size="1">(Name and Address of Agent for Service)</font></B></font></td>
  </tr></table>

<table width=600>
  <tr>
    <td>
      <hr size=1 noshade align=CENTER width=150>
    </td>
  </tr>
</table>
<table width=600><tr><td  align=center><FONT SIZE="2"><B><I>Copies to:</I></B></FONT></td></tr></table>

                   <table width=600>
  <tr align="center">
    <td width=254><b><font size="2">Frank P. Bruno, Esq. <br>
      Sidley Austin Brown &amp; Wood <font size="1">LLP</font><br>
      787 Seventh Avenue <br>
      New York, NY 10019 </font></b> </td>
    <td width=71><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</b></td>
    <td width=259><b><font size="2">Andrew J. Donohue, Esq. <br>
      Fund Asset Management, L.P. <br>
      P.O. Box 9011 <br>
      Plainsboro, NJ 08543-9011 </font></b> </td>
  </tr>
</table>
<table width=600>
  <tr>
    <td>
      <hr size=1 noshade align=CENTER width=150>
    </td>
  </tr>
</table>
<table width=600><tr><td><FONT SIZE="2"><B>Approximate Date of Proposed Public Offering:</B> As
soon as practicable after the Registration Statement becomes effective under the
Securities Act of 1933.</FONT></td></tr></table>

<p><table width=600><tr><td  align=center><font size=2><B>Calculation of Registration Fee
under the Securities Act of 1933</B></font></td></tr></table>


<br>
<table width="600" border="0" cellpadding="0" cellspacing="0">
  <tr>
    <td valign="bottom" colspan="5">
      <hr size="2" noshade>
    </td>
  </tr>
  <tr>
    <td valign="bottom"><b><font size="1">Title of Securities<br>
      Being Registered </font></b></td>
    <td valign="bottom" align="center"><b><font size="1">Amount being <br>
      Registered(1) </font></b></td>
    <td valign="bottom" align="center"><b><font size="1">Proposed Maximum<br>
      Offering Price <br>
      Per Unit(1) </font></b></td>
    <td valign="bottom" align="center"><b><font size="1">Proposed Maximum<br>
      Aggregate Offering <br>
      Price(1) </font></b></td>
    <td valign="bottom" align="center"><b><font size="1">Amount of<br>
      Registration <br>
      Fee(2) </font></b></td>
  </tr>
  <tr>
    <td valign="bottom" colspan="5">
      <hr size="1" noshade>
    </td>
  </tr>
  <tr>
    <td valign="bottom"><font size="2">Common Stock (0.10 par value) </font></td>
    <td valign="bottom" align="center"><font size="2">5,600,000 shares</font></td>
    <td valign="bottom" align="center"><font size="2">$16.09</font></td>
    <td valign="bottom" align="center"><font size="2">$90,104,000</font></td>
    <td valign="bottom" align="center"><font size="2">$11,417</font></td>
  </tr>
  <tr>
    <td valign="bottom" colspan="5">
      <hr size="1" noshade>
    </td>
  </tr>
</table>
<b><font size="1"> </font></b>
<table width=600><tr><td width=4% valign=top><font size="1">(1) </font></td><td width=2%><font size="1"></font></td><td width=94%><font size="1">Estimated
solely for the purpose of calculating the filing fee.</font></td></tr></table>

<table width=600><tr><td width=4% valign=top><font size="1">(2) </font></td><td width=2%><font size="1"></font></td><td width=94%><font size="1">Paid
by wire transfer to the designated lockbox of the Securities and  Exchange Commission in
Pittsburgh, Pennsylvania.</font></td></tr></table>

<P><table width=600><tr><td><FONT SIZE="2"><B>The Registrant hereby amends this Registration
Statement on such date or dates as may be necessary to delay its effective date until
the Registrant shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with Section 8(a)
of the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a), may
determine.</B></FONT></td></tr></table>


<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;






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<p><table width=600><tr><td  align=center><font size=2><B>MUNIINSURED FUND, INC.<BR>
      P.O. BOX 9011<BR>
      Princeton, New Jersey 08543-9011</B></font></td></tr></table>

<table width=600>
  <tr>
    <td>
      <hr size=1 noshade align=CENTER width=150>
    </td>
  </tr>
</table>
<table width=600><tr><td  align=center><font size=2><B>NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS</B></font></td></tr></table>

<table width=600>
  <tr>
    <td>
      <hr size=1 noshade align=CENTER width=150>
    </td>
  </tr>
</table>
<table width=600><tr><td  align=center><font size=2><B>To Be Held On May 12, 2004</B></font></td></tr></table>

<P><table width=600><tr>
    <td><FONT SIZE="2">To the Holders of Common Stock of<BR>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;M<font size="1">UNI</font>I<font size="1">NSURED</font>
      F<font size="1">UND</font>, I<font size="1">NC</font>.</FONT></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOTICE IS HEREBY
GIVEN that an annual meeting of  stockholders (the &#147;Meeting&#148;) of  MuniInsured
Fund, Inc. (&#147;MuniInsured&#148;),  a Maryland corporation, will be held at  the
offices of Fund Asset Management, L.P., 800  Scudders Mill Road, Plainsboro,  New Jersey
on Wednesday, May 12, 2004 at 9:00 a.m.  Eastern time for the  following purposes:</font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
    <td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) To elect three
      Directors of MuniInsured to serve until the 2007 Annual Meeting of Stockholders;
      and</font></td>
  </tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
    <td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) To approve or disapprove
      an Agreement and Plan of Reorganization contemplating (i) the acquisition
      of substantially all of the assets and the assumption of substantially all
      of the liabilities of MuniInsured by MuniYield Insured Fund, Inc. (&#147;MuniYield
      Insured&#148;), a Maryland corporation, in exchange solely for newly issued
      shares of common stock of MuniYield Insured (the &#147;MuniYield Insured
      Common Stock&#148;) that has an aggregate net asset value equal to the aggregate
      net asset value of the common stock of MuniInsured (the &#147;MuniInsured
      Common Stock&#148;) and (ii) the distribution by MuniInsured, on a proportionate
      basis, of MuniYield Insured Common Stock (plus cash in lieu of fractional
      shares) to the holders MuniInsured Common Stock. A vote in favor of this
      proposal also will constitute a vote in favor of the liquidation and dissolution
      of MuniInsured under the laws of the State of Maryland and the termination
      of the registration of MuniInsured under the Investment Company Act of 1940,
      as amended;</font></td>
  </tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)
To  transact such other business as properly may come before the Meeting  or any
adjournment  thereof.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of
Directors of MuniInsured has fixed  the close of business on March  12, 2004 as the
record date for the determination of  stockholders entitled to  notice of, and to vote
at, the Meeting or any adjournment(s)  thereof.</font></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You are cordially
invited to attend the Meeting.  <B>Stockholders who do not expect to attend the Meeting in
person are requested to complete, date and sign the enclosed form of proxy and return
it promptly in the envelope provided for that purpose. If you have been provided with
the opportunity on your proxy card or voting instruction form to provide voting
instructions via telephone or the Internet, please take advantage of these prompt and
efficient voting options.</B> The enclosed proxy is being solicited on behalf of the Board
of Directors of MuniInsured.</FONT></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If you have any
questions regarding the enclosed proxy material, please contact  our proxy solicitor,
Georgeson Shareholder, at 1-800-________.</font></td></tr></table>

<P>
<table width=600>
  <tr>
    <td width="339">&nbsp;</td>
    <td width="249"><font size=2>By Order of the Board of Directors,</font></td>
  </tr>
</table>

<P>
<P>
<table width=600>
  <tr>
    <td width="341">&nbsp;</td>
    <td width="247"><font size=2>Phillip S. Gillespie<BR>
      <i>Secretary</i><br>
      <i>M<font size="1">UNI</font>I<font size="1">NSURED</font> F<font size="1">UND</font>,
      I<font size="1">NC</font>.</i></font></td>
  </tr>
</table>

<P><table width=600><tr>
    <td><font size=2>Plainsboro, New Jersey<br>
      <BR>
      Dated: April __, 2004</font></td>
  </tr></table>


<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<p><table width=600><tr><td  align=center><font size=2><B>SUBJECT TO COMPLETION<BR>
      PRELIMINARY PROXY STATEMENT AND PROSPECTUS <br>
      DATED MARCH 9, 2004</B></font></td>
  </tr></table>

<p><table width=600><tr><td  align=center><font size=2><B>PROXY STATEMENT OF MUNIINSURED
FUND, INC.<BR>FOR USE AT AN ANNUAL MEETING OF STOCKHOLDERS</B></font></td></tr></table>

<table width=600>
  <tr>
    <td>
      <hr size=1 noshade align=CENTER width=150>
    </td>
  </tr>
</table>
<table width=600><tr>
    <td  align=center><font size=2><B>To Be Held On May 12, 2004</B></font></td>
  </tr></table>

<table width=600>
  <tr>
    <td>
      <hr size=1 noshade align=CENTER width=150>
    </td>
  </tr>
</table>
<table width=600><tr><td  align=center><font size=2><B>PROSPECTUS OF<BR>MUNIYIELD
INSURED FUND, INC.<BR>P.O. Box 9011, Princeton, New Jersey 08543-9011<BR>(609) 282-2800</B></font></td></tr></table>

<table width=600>
  <tr>
    <td>
      <hr size=1 noshade align=CENTER width=150>
    </td>
  </tr>
</table>
<table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Proxy
Statement and Prospectus is furnished to you as a stockholder of  MuniInsured Fund, Inc. (&#147;MuniInsured&#148;).
An annual meeting of stockholders of  MuniInsured will be held on May 12, 2004, (the
&#147;Meeting&#148;) to consider the items  listed below and discussed in greater detail
elsewhere in this Proxy Statement  and Prospectus. The Board of Directors of MuniInsured
is requesting stockholders  to submit a proxy to be used at the Meeting to vote the
shares held by the  stockholder submitting such proxy.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The proposals to
be considered at the Meeting are:</font></td></tr></table>

<p>
<p>
<p>
<table width=600>
  <tr>
    <td width=30>&nbsp;</td>
    <td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) To elect three
      Directors of MuniInsured to serve until the 2007 Annual Meeting of Stockholders;
      and</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td width=30>&nbsp;</td>
    <td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) To approve an
      Agreement and Plan of Reorganization (the &#147;Agreement and Plan&#148;)
      contemplating (i) the acquisition of substantially all of the assets and
      the assumption of substantially all of the liabilities of MuniInsured by
      MuniYield Insured Fund, Inc. (&#147;MuniYield Insured&#148;), a Maryland
      corporation, in exchange solely for newly issued shares of common stock
      of MuniYield Insured (&#147;MuniYield Insured Common Stock&#148;) and (ii)
      the distribution by MuniInsured, on a proportionate basis, of MuniYield
      Insured Common Stock (plus cash in lieu of fractional shares) to the holders
      of common stock of MuniInsured (&#147;MuniInsured Common Stock&#148;). A
      vote in favor of this proposal also will constitute a vote in favor of the
      liquidation and dissolution of MuniInsured under the laws of the State of
      Maryland and the termination of the registration of MuniInsured under the
      Investment Company Act of 1940, as amended;</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td width=30>&nbsp;</td>
    <td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) To transact such
      other business as may properly come before the Meeting or any adjournment
      thereof.</font></td>
  </tr>
</table>
<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The transaction set forth in
      Proposal 2 above is referred to in this Proxy Statement and Prospectus as
      the &#147;Reorganization.&#148;</font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Proxy
Statement and Prospectus sets forth concise information about  MuniYield Insured that a
stockholder of MuniInsured should know before  considering the Reorganization and should
be retained for future reference.  MuniInsured has authorized the solicitation of proxies
in connection with the  Reorganization solely on the basis of this Proxy Statement and
Prospectus and  the accompanying documents.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of
Directors (the &#147;Directors&#148;) of MuniInsured has fixed the close of  business on
March 12, 2004 as the record date (the &#147;Record Date&#148;) for the  determination of
stockholders entitled to notice of, and to vote at, the Meeting  or any adjournment(s)
thereof. Stockholders on the Record Date will be entitled  to one vote for each share
held, with no share having cumulative voting rights.  As of the Record Date, MuniInsured
had outstanding ____________ shares of common  stock.</font></td></tr></table>


<p><table width=600><tr><td align=right><FONT SIZE="2"><I>(continued on the following page)</I></FONT> </td></tr></table>



<table width=600>
  <tr>
    <td>
      <hr size=1 noshade align=CENTER width=150>
    </td>
  </tr>
</table>
<table width=600><tr>
    <td  align=center>
      <div align="center"><font size=2><b>The Securities And Exchange Commission
        has not approved or disapproved these securities <br>
        or passed upon the adequacy of this Proxy Statement and Prospectus. <br>
        Any representation to the contrary is a criminal offense.</b></font> </div>
    </td>
  </tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Proxy
Statement and Prospectus serves as a prospectus of MuniYield Insured  in connection with
the issuance of the MuniYield Insured Common Stock as part of  the Reorganization.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MuniYield Insured
and MuniInsured are sometimes referred to herein individually  as a &#147;Fund&#148; and
collectively as the &#147;Funds,&#148; as the context requires. The fund  resulting from
the Reorganization is sometimes referred to herein as the  &#147;Combined Fund.&#148;</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the
Reorganization, MuniYield Insured will acquire substantially all of the  assets and
assume substantially all of the liabilities of MuniInsured solely in  exchange for newly
issued shares of MuniYield Insured Common Stock with a par  value of $.10 per share.
MuniInsured will distribute the MuniYield Insured  Common Stock (plus cash in lieu of
fractional shares) to holders of MuniInsured  Common Stock and will then liquidate and
dissolve under Maryland law and  terminate its registration under the Investment Company
Act of 1940, as amended  (the &#147;Investment Company Act&#148;). MuniYield Insured will
continue to operate as a  registered closed-end investment company with the investment
objective and  investment policies described in this Proxy Statement and Prospectus.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the
Reorganization, MuniYield Insured will issue shares of its common stock  to MuniInsured
based on the net asset value of the assets transferred to  MuniYield Insured by
MuniInsured. These shares will then be distributed by  MuniInsured to its stockholders
based on the net asset value of the shares held  by each stockholder just prior to the
Reorganization. A holder of MuniInsured  Common Stock will receive MuniYield Insured
Common Stock (plus cash in lieu of  fractional shares). All references to the MuniInsured
Common Stock will include  shares of common stock representing Dividend Reinvestment Plan
shares held in  the book deposit accounts of holders of MuniInsured Common Stock.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The MuniYield
Insured Common Stock is listed on the New York Stock Exchange (the  &#147;NYSE&#148;)
under the symbol &#147;MYI.&#148; The MuniInsured Common Stock is listed on the  American
Stock Exchange (the &#147;AMEX&#148;) under the symbol &#147;MIF.&#148; Subsequent to the
Reorganization, shares of MuniYield Insured Common Stock will continue to be  listed on
the NYSE under the symbol &#147;MYI.&#148; Reports, proxy materials and other
information concerning MuniYield Insured and MuniInsured may be inspected at the  Public
Reference Room of the Securities and Exchange Commission (the &#147;SEC&#148;) in
Washington, D.C. Call (202) 942-8090 for information on the operation of the  public
reference room. This information is also available on the SEC&#146;s Internet  site at
http://www.sec.gov and copies may be obtained upon payment of a  duplicating fee, by
electronic request at the following E-mail address:  publicinfo@sec.gov or by writing the
Public Reference Section of the SEC. Such  information concerning MuniYield Insured may
also be inspected at the offices of  the NYSE, 20 Broad Street, New York, New York 10005.
Such information concerning  MuniInsured may also be inspected at the offices of the AMEX
at 9801 Washington  Boulevard, Gaithersburg, Maryland 20878.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The address of the
principal executive office of MuniYield Insured and  MuniInsured is 800 Scudders Mill
Road, Plainsboro, New Jersey 08536, and the  telephone number is (609) 282-2800.</font></td></tr></table>


<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;






<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 4; page: 4" -->





<p><table width=600><tr><td  align=center><font size=2><B>TABLE OF CONTENTS</B></font></td></tr></table>

<br>
<table border=0 cellspacing=0 cellpadding=0 width="600">
  <tr valign="bottom">
    <td>
      <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="center"> <font size="1"><b>Page</b></font>
      <hr noshade size="1">
    </td>
  </tr>
  <tr valign="bottom">
    <td colspan=2>
      <p><font size="2">INTRODUCTION</font></p>
    </td>
    <td>
      <p><font size="2">&nbsp;&nbsp;</font></p>
    </td>
    <td align="right">
      <p><font size="2">1</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td colspan="2"><font size="2">ITEM 1: ELECTION OF DIRECTORS</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size="2">1</font></td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td><font size="2">Committees of the Board of Directors</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size="2">2</font></td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td><font size="2">Stockholder Communication</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size="2">2</font></td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td><font size="2">Director Attendance at Stockholder Meetings</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size="2">2</font></td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td><font size="2">Independant Accountant&#146;s Fees</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size="2">2</font></td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td><font size="2">Compliance with Section 16(a) of the Securities Exchange
      Act of 1934</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size="2">4</font></td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td><font size="2">Interested Persons</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size="2">5</font></td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td><font size="2">Compensation of Directors</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size="2">5</font></td>
  </tr>
  <tr valign="bottom">
    <td>
      <p>&nbsp;</p>
    </td>
    <td>
      <p><font size="2">Officers of MuniInsured</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">6</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td><font size="2">Share Ownership</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size="2">6</font></td>
  </tr>
  <tr valign="bottom">
    <td colspan=2><font size="2"> ITEM 2: THE REORGANIZATION</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size="2">6</font></td>
  </tr>
  <tr valign="bottom">
    <td colspan=2>
      <p><font size="2">SUMMARY</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">6</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p>&nbsp;</p>
    </td>
    <td>
      <p><font size="2">The Reorganization</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">6</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p>&nbsp;</p>
    </td>
    <td>
      <p><font size="2">What will be the Results of the Reorganization?</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">6</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p>&nbsp;</p>
    </td>
    <td>
      <p><font size="2">What are the Reasons for the Reorganization?</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">7</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p>&nbsp;</p>
    </td>
    <td>
      <p><font size="2">Pro Forma Fee Table</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">8</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td colspan=2>
      <p><font size="2">RISK FACTORS AND SPECIAL CONSIDERATIONS</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">16</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td colspan=2>
      <p><font size="2">COMPARISON OF THE FUNDS</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">20</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p>&nbsp;</p>
    </td>
    <td>
      <p><font size="2">Financial Highlights</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">20</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p>&nbsp;</p>
    </td>
    <td>
      <p><font size="2">Investment Objectives and Policies</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">22</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p>&nbsp;</p>
    </td>
    <td>
      <p><font size="2">Investment Restrictions</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">31</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p>&nbsp;</p>
    </td>
    <td>
      <p><font size="2">Performance</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">34</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p>&nbsp;</p>
    </td>
    <td>
      <p><font size="2">Code of Ethics</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">40</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p>&nbsp;</p>
    </td>
    <td>
      <p><font size="2">Stockholder Inquiries</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">41</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p>&nbsp;</p>
    </td>
    <td>
      <p><font size="2">Dividends and Distributions</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">41</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td colspan=2>
      <p><font size="2">AGREEMENT AND PLAN OF REORGANIZATION</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">48</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p>&nbsp;</p>
    </td>
    <td>
      <p><font size="2">General</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">48</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p>&nbsp;</p>
    </td>
    <td>
      <p><font size="2">Procedure</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">48</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p>&nbsp;</p>
    </td>
    <td>
      <p><font size="2">Terms of the Agreement and Plan</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">49</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p>&nbsp;</p>
    </td>
    <td>
      <p><font size="2">Potential Benefits to Stockholders of Growth Opportunity
        as a Result of the Reorganization</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">51</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p>&nbsp;</p>
    </td>
    <td>
      <p><font size="2">Tax Consequences of the Reorganization</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">52</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td><font size="2">Capitalization</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size="2">54</font></td>
  </tr>
  <tr valign="bottom">
    <td colspan=2>
      <p><font size="2">INFORMATION CONCERNING THE SPECIAL MEETING</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">54</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p>&nbsp;</p>
    </td>
    <td>
      <p><font size="2">Date, Time and Place of Meeting</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">54</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p>&nbsp;</p>
    </td>
    <td>
      <p><font size="2">Solicitation, Revocation and Use of Proxies</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">54</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p>&nbsp;</p>
    </td>
    <td>
      <p><font size="2">Record Date and Outstanding Shares</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">54</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p>&nbsp;</p>
    </td>
    <td>
      <p><font size="2">Security Ownership of Certain Beneficial Owners and Management
        </font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">54</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td><font size="2">Voting Rights and Required Vote</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size="2">55</font></td>
  </tr>
  <tr valign="bottom">
    <td>
      <p>&nbsp;</p>
    </td>
    <td>
      <p><font size="2">Appraisal Rights</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">55</font></p>
    </td>
  </tr>
</table>
<p><font size="2">.</font><font size="2"> </font> </p>
<table width=600>
  <tr>
    <td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center>&nbsp;</td>
    <td width=60 align=right><font size="1">&nbsp;</font></td>
  </tr>
</table>
<hr size=5 noshade width=600 align=LEFT>
<p><font size="2">&nbsp; <!-- *************************************************************************** -->
  <!-- MARKER PAGE="sheet: 5; page: 5" --> </font></p>
<p>&nbsp;</p>
<table border=0 cellspacing=0 cellpadding=0 width="600">
  <tr valign="bottom">
    <td width="404">
      <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
    </td>
    <td width="143">
      <p>&nbsp;</p>
    </td>
    <td width="10">
      <p>&nbsp;</p>
    </td>
    <td align="center" width="47"> <font size="1"><b>Page</b></font>
      <hr noshade size="1">
    </td>
  </tr>
  <tr valign="bottom">
    <td colspan=2>
      <p><font size="2">ADDITIONAL INFORMATION</font></p>
    </td>
    <td width="10">
      <p>&nbsp;</p>
    </td>
    <td align="right" width="47">
      <p><font size="2">55</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td colspan=2><font size="2">CUSTODIAN</font></td>
    <td width="10">&nbsp;</td>
    <td align="right" width="47"><font size="2">56</font></td>
  </tr>
  <tr valign="bottom">
    <td colspan=2><font size="2">TRANSFER, AGENT, DIVIDEND DISBURSING AGENT AND
      REGISTRAR</font></td>
    <td width="10">&nbsp;</td>
    <td align="right" width="47"><font size="2">56</font></td>
  </tr>
  <tr valign="bottom">
    <td colspan=2><font size="2">ACCOUNTING SERVICES PROVIDER</font></td>
    <td width="10">&nbsp;</td>
    <td align="right" width="47"><font size="2">57</font></td>
  </tr>
  <tr valign="bottom">
    <td colspan=2><font size="2">LEGAL PROCEEDINGS</font></td>
    <td width="10">&nbsp;</td>
    <td align="right" width="47"><font size="2">57</font></td>
  </tr>
  <tr valign="bottom">
    <td colspan=2><font size="2">LEGAL OPINIONS</font></td>
    <td width="10">&nbsp;</td>
    <td align="right" width="47"><font size="2">57</font></td>
  </tr>
  <tr valign="bottom">
    <td colspan=2><font size="2">EXPERTS</font></td>
    <td width="10">&nbsp;</td>
    <td align="right" width="47"><font size="2">57</font></td>
  </tr>
  <tr valign="bottom">
    <td colspan=2>
      <p><font size="2">STOCKHOLDER PROPOSALS</font></p>
    </td>
    <td width="10">
      <p>&nbsp;</p>
    </td>
    <td align="right" width="47">
      <p><font size="2">58</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td colspan=2><font size="2">INDEX TO FINANCIAL STATEMENTS</font></td>
    <td width="10">&nbsp;</td>
    <td align="right" width="47"><font size="2">59</font></td>
  </tr>
  <tr valign="bottom">
    <td colspan=2><font size="2">EXHIBIT I &#151;</font> <font size="2">INFORMATION
      PERTAINING TO EACH FUND</font></td>
    <td width="10"><font size="2"></font></td>
    <td align="right" width="47"><font size="2">I-1</font></td>
  </tr>
  <tr valign="bottom">
    <td colspan=2><font size="2">EXHIBIT II &#151; AGREEMENT AND PLAN OF REORGANIZATION</font></td>
    <td width="10"><font size="2"></font></td>
    <td align="right" width="47"><font size="2"> II-1 </font></td>
  </tr>
  <tr valign="bottom">
    <td colspan=2><font size="2">EXHIBIT III &#151; DESCRIPTION OF BOND RATINGS
      </font></td>
    <td width="10"><font size="2"></font></td>
    <td align="right" width="47"><font size="2">III-1</font></td>
  </tr>
  <tr valign="bottom">
    <td colspan=2><font size="2">EXHIBIT IV &#151;</font> <font size="2">PORTFOLIO
      INSURANCE</font></td>
    <td width="10"><font size="2"></font></td>
    <td align="right" width="47"><font size="2">IV-1</font></td>
  </tr>
  <tr valign="bottom">
    <td colspan=2><font size="2">EXHIBIT V &#151;</font> <font size="2">TO BE
      SUPPLIED BY SUBSEQUENT AMENDMENT</font></td>
    <td width="10">&nbsp;</td>
    <td align="right" width="47">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td colspan=2><font size="2">EXHIBIT VI &#151; CHARTER OF THE NOMINATING COMMITTEE
      </font></td>
    <td width="10"><font size="2"></font></td>
    <td align="right" width="47"><font size="2">VI-1</font></td>
  </tr>
</table>
<p>&nbsp; </p>
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 6; page: 6" -->





<p><table width=600><tr><td  align=center><font size=2><B>INTRODUCTION</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Proxy
Statement and Prospectus is furnished to you in connection with the  solicitation of
proxies on behalf of the Board of Directors of MuniInsured for  use at the Meeting to be
held at the offices of Fund Asset Management, L.P.  (&#147;FAM&#148;), 800 Scudders Mill
Road, Plainsboro, New Jersey on Wednesday, May 12,  2004 at 9:00 a.m. Eastern time. The
mailing address for MuniInsured is P.O. Box  9011, Princeton, New Jersey 08543-9011. The
approximate mailing date of this  Proxy Statement and Prospectus is April __, 2004.</font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any person giving a proxy may
      revoke it at any time prior to its exercise by executing a superseding proxy,
      by giving written notice of the revocation to the Secretary of MuniInsured
      at the address indicated above or by voting in person at the Meeting. All
      properly executed proxies received prior to the Meeting will be voted at
      the Meeting in accordance with the instructions marked thereon or otherwise
      as provided therein. Unless instructions to the contrary are marked, proxies
      will be voted &#147;<b>FOR</b>&#148; the election of Directors and &#147;<b>FOR</b>&#148;
      the proposal to approve the Agreement and Plan.</font></td>
  </tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With respect to Item 1, assuming
      a quorum is present at the Meeting, election of the three Directors to serve
      until the 2007 Annual Meeting of Stockholders will require the affirmative
      vote of the holders of a majority of the votes cast by MuniInsured&#146;s
      stockholders at the Meeting, voting in person or by proxy. With respect
      to Item 2, assuming a quorum is present at the Meeting, approval of the
      Agreement and Plan will require the affirmative vote of a majority of the
      outstanding shares of MuniInsured Common Stock, voting in person or by proxy.
      </font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of
Directors of MuniInsured has fixed the close of business on March  12, 2004 as the Record
Date for the determination of stockholders entitled to  notice of, and to vote at, the
Meeting or any adjournment(s) thereof.  Stockholders on the Record Date will be entitled
to one vote for each share  held, with no shares having cumulative voting rights. As of
the Record Date,  MuniInsured had _____ shares of Common Stock outstanding. To the
knowledge of  the management of MuniInsured, no person owned beneficially or of record 5%
or  more of the outstanding shares of common stock of MuniInsured as of the Record  Date.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of
Directors of MuniInsured knows of no business other than that  discussed above that will
be presented for consideration at the Meeting. If any  other matter is properly
presented, it is the intention of the persons named in  the enclosed proxy to vote in
accordance with their best judgment.</font></td></tr></table>

<br>
<table width=600>
  <tr>
    <td  align=center><font size=2><b>ITEM 1. ELECTION OF DIRECTORS OF MUNIINSURED</b></font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At the Meeting, Directors of
      MuniInsured will be elected to serve until their successors have been duly
      elected and qualified or until their earlier resignation or removal. If
      the stockholders of MuniInsured do not approve the Agreement and Plan as
      described herein, then the Board of MuniInsured, including the Class III
      Directors elected at the Meeting, will continue to serve as the Board of
      MuniInsured. If the stockholders of MuniInsured approve the Agreement and
      Plan as described herein, and the Reorganization is consummated, the stockholders
      of MuniInsured will become stockholders of MuniYield Insured. The same individuals
      serve as Directors of MuniYield Insured. The Board of MuniInsured is responsible
      for the overall supervision of the operations of the Fund and will be responsible
      for the overall supervision of the Combined Fund if the Reorganization is
      consummated.</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the Articles of
      Incorporation of MuniInsured, the Board is divided into three classes, designated
      Class I, Class II and Class III. Each class has a term of office of three
      years and each year the term of office of one class expires. A Director
      elected by stockholders will serve until the Annual Meeting of Stockholders
      in the year in which his or her term expires and until his or her successor
      is elected and qualified.</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;It is intended that all properly
      executed proxies of the holders of MuniInsured Common Stock, voting together
      as a single class, will be voted (unless such authority has been withheld
      in the proxy or revoked as described herein) &#147;<b>FOR</b>&#148; Herbert
      I. London, Andr&#233; F. Perold and Robert S. Salomon, Jr. as Class III
      Directors to serve until the 2007 Annual Meeting.</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain biographical and other
      information relating to the nominees is set forth in Exhibit I to this Proxy
      Statement and Prospectus. As of the Record Date, the Directors owned [no]
      shares of MuniInsured Common Stock. The Board of MuniInsured knows of no
      reason why any of these nominees will be unable to serve, but in the event
      of any such unavailability, the proxies received will be voted for such
      substitute nominee or nominees as the Board of MuniInsured may recommend.</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size=2><b>Committees of the Board of Directors</b></font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size=2> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MuniInsured maintains two
      standing board committees, the Audit Committee and the Nominating Committee,
      each consisting of all the Directors who are not &#147;interested persons&#148;
      of the Fund, as defined in the Investment Company Act and who are &#147;independent&#148;
      as defined in the listing standards of the American Stock Exchange (&#147;AMEX&#148;).
      Currently, Ms. Ramo and Messrs. Bodurtha, Grills, London, Perold, Salomon
      and Swensrud are members of MuniInsured&#146;s Audit Committee and Nominating
      Committee.<br>
      <br>
      <i>Audit Committee </i><br>
      <br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The principal responsibilities of the Audit
      Committee are the appointment, compensation and oversight of the Fund&#146;s
      independent accountants, including the resolution of disagreements regarding
      financial reporting between Fund management and such independent accountants.
      The Audit Committee&#146;s responsibilities include, without limitation,
      to (i) review with the independent accountants the arrangements for and
      scope of annual and special audits and any other services provided by the
      independent accountants to the Fund&#146;s; (ii) discuss with the independent
      accountants certain matters relating to the Fund&#146;s financial statements,
      including any adjustment to such financial statements recommended by such
      independent accountants or any other results of any audit; (iii) ensure
      that the independent accountants submit on a periodic basis a formal written
      statement with respect to their independence, discuss with the independent
      accountants any relationships or services disclosed in the statement that
      may impact the objectivity and independence of the Fund&#146;s independent
      accountants and recommend that the Board take appropriate action in response
      thereto to satisfy itself of the independent accountants&#146; independence;
      and (iv) consider the comments of the independent accountants with respect
      to the quality and adequacy of the Fund&#146;s accounting and financial
      reporting policies and practices and internal controls and Fund management&#146;s
      responses thereto. The Audit Committee has retained independent legal counsel
      to assist it in connection with these duties.</font></td>
  </tr>
</table>
<p>
<p>&nbsp;
<table width=600>
  <tr>
    <td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> </font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td>
  </tr>
</table>
<p>&nbsp;
<hr size=5 noshade width=600 align=LEFT>
<p>&nbsp; <!-- *************************************************************************** -->
  <!-- MARKER PAGE="sheet: 56; page: 56" -->
<br>
<table width=600>
  <tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MuniInsured adopted a revised
      Audit Committee Charter (the &#147;Charter&#148;) at a meeting held on November
      21, 2003. The Board revised and reapproved the Charter on May 29, 2003.
      A copy of the Charter is attached as Exhibit V to this proxy statement and
      prospectus. The Committee also has (a) received written disclosures and
      the letter required by Independence Standards Board Standard No. 1 from
      ____________, MuniInsured&#146;s independent auditors, and (b) discussed
      certain matters required to be discussed by Statements on Auditing Standards
      No. 61 with _________. The Committee has considered whether the provision
      of non-audit services by ______________ is compatible with maintaining the
      independence of those auditors.</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At its meeting held on _________________,
      the Audit Committee reviewed and discussed the audit of the Fund&#146;s
      financial statements with Fund management and ______________. Had any material
      concerns arisen during the course of the audit and the preparation of the
      audited financial statements mailed to stockholders and included in MuniInsured&#146;s
      Annual Report, the Committee would have been notified by Fund management
      or ______________. The Committee received no such notifications. The Committee
      recommended to the Board that the Fund&#146;s audited financial statements
      should be included in the Fund&#146;s Annual Report to Stockholders for
      the fiscal year ended October 31, 2003.</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size=2><i>Nominating Committee</i></font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The principal responsibilities
      of the Nominating Committee are to identify individuals qualified to serve
      as non-interested Directors of MuniInsured and to recommend its nominees
      for consideration by the full Board. While the Nominating Committee is solely
      responsible for the selection and nomination of the MuniInsured&#146;s non-interested
      Directors, the Nominating Committee may consider nominations for the office
      of Director made by Fund stockholders or by Fund management as it deems
      appropriate. Stockholders who wish to recommend a nominee should send nominations
      to the Secretary of MuniInsured and include biographical information and
      set forth the qualifications of the proposed nominee. The Nominating Committee
      evaluates nominees from whatever source using the same standard. MuniInsured
      adopted a charter of the Nominating Committee on February 18, 2004, a copy
      of which is attached hereto as Exhibit VI.</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In identifying and evaluating
      a potential nominee to serve as an independent Director of MuniInsured,
      the Nominating Committee will consider, among other factors, (i) the person&#146;s
      business and professional experience, education, character and integrity;
      (ii) whether the individual is an &#147;interested person&#148; as defined
      in the Investment Company Act and whether the person is otherwise qualified
      to serve as a Director under applicable laws and regulations; (iii) the
      nature of any business, charitable, financial or family relationships that
      might impair the individual&#146;s independence; (iv) whether the individual
      is financially literate pursuant to the listing standards of the AMEX; (v)
      whether the person serves on boards of, or is otherwise affiliated with,
      competing financial service organizations or their related investment company
      complexes; (vi) the person&#146;s willingness to serve and ability to commit
      the time necessary to perform the duties of a Director of MuniInsured; and
      (vii) whether the selection and nomination of the person is consistent with
      MuniInsured&#146;s retirement policy.</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size=2><b>Committee and Board Meetings</b></font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During MuniInsured&#146;s most
      recently completed fiscal year, the Fund held _____ Board meetings and ____
      Audit Committee meetings. Each of the Directors then in office attended
      at least 75% of the aggregate total number of meetings of the Board held
      during the fiscal year and, if a member, the total number of meetings of
      the Audit Committee held during the period for which he or she served. The
      Nominating Committee is newly formed and did not meet during the Fund&#146;s
      fiscal year ended October 31, 2003.</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size=2><b>Stockholder Communications</b></font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stockholders may send written
      communications to MuniInsured&#146;s Board of Directors or to an individual
      Director by mailing such correspondence to the Secretary of MuniInsured
      (addressed to 800 Scudders Mill Road, Plainsboro, New Jersey 08536). Such
      communications must be signed by the stockholder and identify the class
      and number of shares held by the stockholder. Properly submitted stockholder
      communications will, as appropriate, be forwarded to the entire Board or
      to the individual Director. Any stockholder proposal submitted pursuant
      to Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the
      &#147;Exchange Act&#148;), must continue to meet all the requirements of
      Rule 14a-8. See &#147;Additional Information-Stockholder Proposals&#148;
      herein.</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size=2><b>Director Attendance at Stockholder Meetings</b></font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MuniInsured has no formal policy
      regarding Director attendance at stockholder meetings. None of MuniInsured&#146;s
      Directors attended the 2003 Annual Meeting.</font></td>
  </tr>
</table>
<p>&nbsp;
<table width=600>
  <tr>
    <td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 2</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td>
  </tr>
</table>
<p>&nbsp;
<hr size=5 noshade width=600 align=LEFT>
<p>&nbsp; <!-- *************************************************************************** -->
  <!-- MARKER PAGE="sheet: 57; page: 57" -->
<p>
<table width=600>
  <tr>
    <td><font size=2><b>Independent Accountant&#146;s Fees</b></font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The SEC&#146;s auditor independence
      rules require the Audit Committee of MuniInsured to pre-approve (a) all
      audit and permissible non-audit services provided by MuniInsured&#146;s
      independent accountants directly to MuniInsured and (b) those permissible
      non-audit services provided by MuniInsured&#146;s independent accountants
      to the Investment Adviser and any entity controlling, controlled by or under
      common control with the Investment Adviser that provides ongoing services
      to MuniInsured (the &#147;Affiliated Service Providers&#148;), if the services
      relate directly to the operations and financial reporting of MuniInsured.</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The first two tables below
      set forth for MuniInsured, for its two most recent fiscal years, the fees
      billed by its independent accountants for (a) all audit and non-audit services
      provided directly to MuniInsured and (b) those non-audit services provided
      to the MuniInsured&#146;s Affiliated Service Providers that relate directly
      to the MuniInsured&#146;s operations and financial reporting, and, therefore,
      require Audit Committee pre-approval. Services under the caption:</font></td>
  </tr>
</table>
<br>
<table width=600>
  <tr>
    <td width=3%></td>
    <td width=1% valign=top><font size=3>&#149;</font></td>
    <td width=3%></td>
    <td width=93%><font size=2><i>Audit Fees</i> are for the audit of MuniInsured&#146;s
      annual financial statements included in the Fund&#146;s reports to stockholders
      and in connection with statutory and regulatory filings or engagements;</font></td>
  </tr>
</table>
<br>
<table width=600>
  <tr>
    <td width=3%></td>
    <td width=1% valign=top><font size=3>&#149;</font></td>
    <td width=3%></td>
    <td width=93%><font size=2><i>Audit-Related Fees</i> include assurance related
      services reasonably related to the performance of the audit of financial
      statements not included in Audit Fees;</font></td>
  </tr>
</table>
<br>
<table width=600>
  <tr>
    <td width=3%></td>
    <td width=1% valign=top><font size=3>&#149;</font></td>
    <td width=3%></td>
    <td width=93%><font size=2><i>Tax Fees</i> include tax compliance, tax advice
      and tax planning; and</font></td>
  </tr>
</table>
<br>
<table width=600>
  <tr>
    <td width=3%></td>
    <td width=1% valign=top><font size=3>&#149;</font></td>
    <td width=3%></td>
    <td width=93%><font size=2><i>All Other Fees</i> are for other products and
      services provided.</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MuniInsured also is required
      to disclose the total non-audit fees paid to its independent accountants,
      for services rendered to MuniInsured and its Affiliated Service Providers,
      regardless of whether those fees were pre-approved by the Audit Committee.</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The fiscal year end for MuniInsured
      is September 30.</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i>Fees for audit and non-audit
      services provided directly to MuniInsured by __________:</i></font></td>
  </tr>
</table>
<br>
<table border=0 cellspacing=0 cellpadding=0 width="600">
  <tr valign="bottom" align="center">
    <td colspan=2> <font size="1"><b>Audit Fees ($)</b></font>
      <hr size="1" noshade width="90%">
    </td>
    <td colspan=2> <font size="1"><b>Audit-Related Fees ($)</b></font>
      <hr size="1" noshade width="90%">
    </td>
    <td colspan=2> <font size="1"><b>Tax Fees ($)</b></font>
      <hr size="1" noshade width="90%">
    </td>
    <td colspan=2> <font size="1"><b>All Other Fees</b></font>
      <hr size="1" noshade width="90%">
    </td>
  </tr>
  <tr valign="bottom" align="center">
    <td width=91> <font size="1"><b>2003</b></font>
      <hr size="1" noshade width="90%">
    </td>
    <td width=80> <font size="1"><b>2002</b></font>
      <hr size="1" noshade width="90%">
    </td>
    <td width=72> <font size="1"><b>2003</b></font>
      <hr size="1" noshade width="90%">
    </td>
    <td width=82> <font size="1"><b>2002</b></font>
      <hr size="1" noshade width="90%">
    </td>
    <td width=69> <font size="1"><b>2003*</b></font>
      <hr size="1" noshade width="90%">
    </td>
    <td width=66> <font size="1"><b>2002*</b></font>
      <hr size="1" noshade width="90%">
    </td>
    <td width=67> <font size="1"><b>2003</b></font>
      <hr size="1" noshade width="90%">
    </td>
    <td width=73> <font size="1"><b>2002</b></font>
      <hr size="1" noshade width="90%">
    </td>
  </tr>
  <tr valign="bottom" align="center">
    <td width=91>&nbsp; </td>
    <td width=80>&nbsp; </td>
    <td width=72>&nbsp; </td>
    <td width=82>&nbsp; </td>
    <td width=69>&nbsp; </td>
    <td width=66>&nbsp; </td>
    <td width=67>&nbsp; </td>
    <td width=73>&nbsp; </td>
  </tr>
</table>
<table width=600>
  <tr>
    <td>
      <hr size=1 noshade align=left  width=75>
    </td>
  </tr>
</table>
<table width=600>
  <tr>
    <td width=4% valign=top><font size="1">* </font></td>
    <td width=2%><font size="1"></font></td>
    <td width=94%><font size="1">Primarily related to tax compliance services
      associated with reviewing MuniInsured&#146;s tax returns.</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i>Fees for non-audit services
      provided to MuniInsured&#146;s Affiliated Service Providers by __________
      for which pre-approval by the Audit Committee was required:</i></font></td>
  </tr>
</table>
<br>
<br>
<table border=0 cellspacing=0 cellpadding=0 width="600">
  <tr valign="bottom" align="center">
    <td width=76>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td width=175> <font size="1"><b>Audit-Related Fees ($)</b></font>
      <hr size="1" noshade width="60%">
    </td>
    <td width=152> <font size="1"><b>Tax Fees ($)</b></font>
      <hr size="1" noshade width="60%">
    </td>
    <td width=135> <font size="1"><b>All Other Fees ($)</b></font>
      <hr size="1" noshade width="60%">
    </td>
    <td width=62>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
  </tr>
  <tr valign="bottom" align="center">
    <td width=76>&nbsp;</td>
    <td width=175> <font size="1"><b>2003*</b></font>
      <hr size="1" noshade width="30%">
    </td>
    <td width=152> <font size="1"><b>2003*</b></font>
      <hr size="1" noshade width="30%">
    </td>
    <td width=135> <font size="1"><b>2003*</b></font>
      <hr size="1" noshade width="30%">
    </td>
    <td width=62>&nbsp;</td>
  </tr>
  <tr valign="bottom" align="center">
    <td width=76>&nbsp;</td>
    <td width=175>
      <p><font face="Times New Roman" size="2">**</font></p>
    </td>
    <td width=152>
      <p>&nbsp;</p>
    </td>
    <td width=135>
      <p>&nbsp;</p>
    </td>
    <td width=62>&nbsp;</td>
  </tr>
</table>
<table width=600>
  <tr>
    <td>
      <hr size=1 noshade align=left  width=75>
    </td>
  </tr>
</table>
<table width=600>
  <tr>
    <td width=4% align=right valign=top><font size="1">* </font></td>
    <td width=2%><font size="1"></font></td>
    <td width=94%><font size="1">Primarily related to examinations of internal
      controls and investment management performance returns at Affiliated Service
      Providers. </font></td>
  </tr>
</table>
<table width=600>
  <tr>
    <td width=4% align=right valign=top><font size="1">** </font></td>
    <td width=2%><font size="1"></font></td>
    <td width=94%><font size="1">Information is provided only for the 2003 fiscal
      year because the rules regarding pre-approval by the Audit Committee of
      services provided to Affiliated Service Providers were not in effect during
      the 2002 fiscal year of MuniInsured.</font></td>
  </tr>
</table>
<p>&nbsp;
<table width=600>
  <tr>
    <td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 3</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td>
  </tr>
</table>
<p>&nbsp;
<hr size=5 noshade width=600 align=LEFT>
<p>&nbsp; <!-- *************************************************************************** -->
  <!-- MARKER PAGE="sheet: 58; page: 58" -->
<p>
<table width=600>
  <tr>
    <td><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><i>Aggregate non-audit
      fees for services provided to MuniInsured and its Affiliated Service Providers
      by __________, regardless of whether pre-approval by the Audit Committee
      was required.</i></b></font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size=2></font></td>
  </tr>
</table>
<br>
<table width="600" border="0" cellpadding="0" cellspacing="0">
  <tr valign="bottom">
    <td width="116">&nbsp;</td>
    <td colspan="2" align="center"><font size=2><b><font size="1">Aggregate Non-Audit
      Fees ($)</font></b></font>
      <hr size="1" noshade width="75%">
    </td>
    <td width="95">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td width="116">&nbsp;</td>
    <td align="center" width="183"><font size="1"><b>2003</b></font>
      <hr size="1" noshade width="40%">
    </td>
    <td align="center" width="206"><font size="1"><b>2002</b></font>
      <hr size="1" noshade width="40%">
    </td>
    <td width="95">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td width="116">&nbsp;</td>
    <td width="183">&nbsp;</td>
    <td width="206">&nbsp;</td>
    <td width="95">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td width="116">&nbsp;</td>
    <td width="183">&nbsp;</td>
    <td width="206">&nbsp;</td>
    <td width="95">&nbsp;</td>
  </tr>
</table>
<font size="1"><b> </b></font>
<table width=600>
  <tr>
    <td>
      <hr size=1 noshade align=left  width=75>
    </td>
  </tr>
</table>
<table width=600>
  <tr>
    <td width=4% align=right valign=top><font size="1">[&#134;] </font></td>
    <td width=2%><font size="1"></font></td>
    <td width=94%><font size="1">[Primarily associated with project management
      of non-financial service systems implementations, advisory and management
      consulting services, and examinations of internal controls and investment
      management performance returns for Affiliated Service Providers.]</font></td>
  </tr>
</table>
<table width=600>
  <tr>
    <td width=4% align=right valign=top><font size="1">[&#134;&#134;] </font></td>
    <td width=2%><font size="1"></font></td>
    <td width=94%><font size="1">Primarily associated with corporate tax consulting,
      cash flow analyses, and quality enhancement and education seminars for personnel
      of Affiliated Service Providers. Fees are also related to tax compliance
      services associated with reviewing the MuniInsured&#146;s tax returns.]</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Audit Committee has reviewed
      the non-audit services provided by __________, MuniInsured&#146;s independent
      accountants, to MuniInsured&#146;s Affiliated Service Providers that were
      not subject to the Audit Committee&#146;s pre-approval and has determined
      that the provision of such services is compatible with maintaining the accountants&#146;
      independence.</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size=2><b><i>Audit Committee&#146;s Pre-Approval Policies and Procedures</i></b></font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Audit Committee has adopted
      policies and procedures with regard to the pre-approval of services. Audit,
      audit-related and tax compliance services provided to MuniInsured on an
      annual basis require specific pre-approval by the Audit Committee. As noted
      above, the Audit Committee also must approve other non-audit services provided
      to MuniInsured and those non-audit services provided to the MuniInsured&#146;s
      Affiliated Service Providers that relate directly to the operations and
      financial reporting of MuniInsured. Certain of these non-audit services
      that the Audit Committee believes are (a) consistent with the SEC&#146;s
      auditor independence rules and (b) routine and recurring services that will
      not impair the independence of the independent accountants may be approved
      by the Audit Committee without consideration on a specific case-by-case
      basis (&#147;general pre-approval&#148;). However, such services will only
      be deemed pre-approved provided that any individual project does not exceed
      $5,000 attributable to MuniInsured or $50,000 for the project as a whole.
      Any proposed services exceeding the pre-approved cost levels will require
      specific pre-approval by the Audit Committee, as will any other services
      not subject to general pre-approval (e.g. unanticipated but permissible
      services). The Audit Committee is informed of each service approved subject
      to general pre-approval at the next regularly scheduled in-person board
      meeting.</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-Audit services provided
      to MuniInsured&#146;s Affiliated Service Providers that have a direct impact
      on the operations or financial reporting of MuniInsured must be pre-approved
      by the Audit Committee of ML &amp; Co. in addition to pre-approval by the
      Audit Committee.</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The independent accountants
      annually will provide the Audit Committee with a detailed analysis of all
      fees paid by ML &amp; Co. and its affiliates.</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size=2><b>Compliance with Section 16(a) of the Securities Exchange
      Act of 1934</b></font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 16(a) of the Securities
      Exchange Act of 1934, as amended (the &#147;Exchange Act&#148;), requires
      the officers and directors of the Fund and persons who own more than ten
      percent of a registered class of the Fund&#146;s equity securities, to file
      reports of ownership and changes in ownership on Forms 3, 4 and 5 with the
      Commission and the AMEX. Officers, directors and greater than ten percent
      stockholders are required by Commission regulations to furnish the Fund
      with copies of all Forms 3, 4 and 5 they file.</font></td>
  </tr>
</table>
<p>&nbsp;
<table width=600>
  <tr>
    <td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 4</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td>
  </tr>
</table>
<p>&nbsp;
<hr size=5 noshade width=600 align=LEFT>
<p>&nbsp; <!-- *************************************************************************** -->
  <!-- MARKER PAGE="sheet: 59; page: 59" -->
<p>
<table width=600>
  <tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based solely on MuniInsured&#146;s
      review of the copies of such forms, and amendments thereto, furnished to
      it during or with respect to its most recent fiscal year, and written representations
      from certain reporting persons that they were not required to file Form
      5 with respect to the most recent fiscal year, the Fund believes that all
      of its officers, directors, greater than ten percent beneficial owners and
      other persons subject to Section 16 of the Exchange Act because of the requirements
      of Section 30 of the Investment Company Act, (i.e., any advisory board member,
      investment adviser or affiliated person of the Fund&#146;s investment adviser),
      have complied with all filing requirements applicable to them with respect
      to transactions during the Fund&#146;s most recent fiscal year.</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size=2><b>Interested Persons</b></font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MuniInsured considers Mr. Glenn
      to be an &#147;interested person&#148; of the Fund within the meaning of
      Section 2(a)(19) of the Investment Company Act because of the positions
      he holds with FAM and its affiliates. Mr. Glenn is currently the President
      of MuniInsured and MuniYield Insured. See Exhibit I to this Joint Proxy
      Statement and Prospectus.</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size=2><b>Compensation of Directors</b></font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FAM pays all compensation to
      all officers of MuniInsured and all Directors of MuniInsured who are affiliated
      with ML &amp; Co. or its subsidiaries. MuniInsured pays fees to each Director
      who is not affiliated with FAM (each, a &#147;non-affiliated Director&#148;)
      for service to MuniInsured. Each non-interested Director receives an aggregate
      annual retainer of $125,000 for his or her services to registered investment
      companies advised by FAM, MLIM or their affiliates (&#147;MLIM/FAM-advised
      funds&#148;), including the Fund. The portion of the annual retainer allocated
      to each MLIM/FAM-advised fund is determined quarterly based on the relative
      net assets of each fund. In addition, each non-interested Director receives
      a fee per in-person Board meeting attended and per in-person Audit Committee
      meeting attended. The annual per meeting fees paid to each non-interested
      Director aggregate $100,000 for all MLIM/FAM-advised funds for which that
      Director serves and are allocated equally among those funds. Each Co-Chairman
      of the Audit Committee receives an additional annual retainer in the amount
      of $25,000, which is paid quarterly and allocated to each MLIM/FAM-advised
      fund for which such Co-Chairman provides services based on the relative
      net assets of each such fund.</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table shows the
      compensation paid to the non-affiliated Directors of MuniInsured from the
      Fund for the fiscal year ended September 30, 2003, and the aggregate compensation
      paid to the Directors, including the Class III nominees, from all MLIM/FAM-advised
      funds, for the calendar year ended December 31, 2003.</font></td>
  </tr>
</table>
<br>
<table border=0 cellspacing=0 cellpadding=0 width="600">
  <tr valign="bottom">
    <td colspan=2><font size="2"><b><font size="1">Name</font></b></font>
      <hr size="1" noshade align="left" width="30%">
    </td>
    <td align="center"><font size="2"><b><font size="1">Compensation<br>
      From Fund </font></b></font>
      <hr size="1" noshade width="70%">
    </td>
    <td align="center"><font size="2"><b><font size="1">Pension or<br>
      Retirement Benefits<br>
      Accrued as Part of<br>
      Fund Expense </font></b></font>
      <hr size="1" noshade width="70%">
    </td>
    <td align="center"><font size="2"><b><font size="1">Aggregate<br>
      Compensation from<br>
      Fund and Other<br>
      MLIM/FAM-<br>
      Advised Funds* </font></b></font>
      <hr size="1" noshade width="70%">
    </td>
  </tr>
  <tr valign="bottom">
    <td colspan=2> <font size="2">James H. Bodurtha* </font></td>
    <td align="center"> <font size="2">$3,264</font></td>
    <td align="center"> <font size="2">None</font></td>
    <td align="center"> <font size="2">$183,219</font></td>
  </tr>
  <tr valign="bottom">
    <td colspan=2> <font size="2">Joe Grills*</font></td>
    <td align="center"> <font size="2">$3,264</font></td>
    <td align="center"> <font size="2">None</font></td>
    <td align="center"> <font size="2">$182,219</font></td>
  </tr>
  <tr valign="bottom">
    <td colspan=2> <font size="2">Herbert I. London </font></td>
    <td align="center"> <font size="2">$3,230</font></td>
    <td align="center"> <font size="2">None</font></td>
    <td align="center"> <font size="2">$163,219</font></td>
  </tr>
  <tr valign="bottom">
    <td colspan=2> <font size="2">Andr&#233; F. Perold </font></td>
    <td align="center"> <font size="2">$3,230</font></td>
    <td align="center"> <font size="2">None</font></td>
    <td align="center"> <font size="2">$162,219</font></td>
  </tr>
  <tr valign="bottom">
    <td colspan=2> <font size="2">Roberta Cooper Ramo </font></td>
    <td align="center"> <font size="2">$3,230</font></td>
    <td align="center"> <font size="2">None</font></td>
    <td align="center"> <font size="2">$163,219</font></td>
  </tr>
  <tr valign="bottom">
    <td colspan=2> <font size="2">Robert S. Salomon, Jr </font></td>
    <td align="center"> <font size="2">$3,230</font></td>
    <td align="center"> <font size="2">None</font></td>
    <td align="center"> <font size="2">$163,219</font></td>
  </tr>
  <tr valign="bottom">
    <td colspan=2 height="14"> <font size="2">Melvin R. Seiden** </font></td>
    <td align="center" height="14"> <font size="2">$3,200</font></td>
    <td align="center" height="14"> <font size="2">None</font></td>
    <td align="center" height="14"> <font size="2">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0</font></td>
  </tr>
  <tr valign="bottom">
    <td colspan=2> <font size="2">Stephen B. Swensrud </font></td>
    <td align="center"> <font size="2">$3,230</font></td>
    <td align="center"> <font size="2">None</font></td>
    <td align="center"> <font size="2">$168,218</font></td>
  </tr>
</table>
<table width=600>
  <tr>
    <td>
      <hr size=1 noshade align=left  width=75>
    </td>
  </tr>
</table>
<table width=600>
  <tr>
    <td width=4% align=right valign=top><font size="1">* </font></td>
    <td width=2%><font size="1"></font></td>
    <td width=94%><font size="1">Co-Chairman of the Audit Committee.</font></td>
  </tr>
</table>
<table width=600>
  <tr>
    <td width=4% align=right valign=top><font size="1">** </font></td>
    <td width=2%><font size="1"></font></td>
    <td width=94%><font size="1">Mr. Seiden retired as a Director of the Fund
      and certain other MLIM/FAM-advised funds effective January 1, 2003.</font></td>
  </tr>
</table>
<p>&nbsp;
<table width=600>
  <tr>
    <td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 5</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td>
  </tr>
</table>
<p>&nbsp;
<hr size=5 noshade width=600 align=LEFT>
<p>&nbsp; <!-- *************************************************************************** -->
  <!-- MARKER PAGE="sheet: 60; page: 60" -->
<p>
<table width=600>
  <tr>
    <td><font size=2><b>Officers of MuniInsured</b></font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Information regarding the officers
      of the Fund is set forth in Exhibit I to this Proxy Statement and Prospectus.
      Officers of the Fund are elected and appointed by the Board and hold office
      until they resign, are removed or are otherwise disqualified to serve.</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size=2><b>Share Ownership</b></font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Set forth in Exhibit I to this
      Joint Proxy Statement and Prospectus is the following information for each
      Director nominee: (i) the number of shares of the Fund owned; (ii) the aggregate
      dollar range of equity in the Fund such share ownership represents; and
      (iii) the aggregate dollar range of securities in all registered funds overseen
      by the Director nominee in the Merrill Lynch family of funds. As of the
      Record Date, none of the non-interested Directors of the Fund or their immediate
      family members owned beneficially or of record any securities of Merrill
      Lynch &amp; Co., Inc.</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of the Record Date, the
      Directors and officers of MuniInsured as a group owned an aggregate of less
      than 1% of MuniInsured Common Stock outstanding at such date. At such date,
      Mr. Glenn, President and a Director of MuniInsured, and the other officers
      of MuniInsured, owned an aggregate of less than 1% of the outstanding shares
      of common stock of ML &amp; Co.</font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>The Board of MuniInsured
      recommends that shareholders vote &#147;FOR&#148; the election of the Class
      III Director nominees.</b></font></td>
  </tr>
</table>
<p><table width=600><tr>
    <td  align=center><font size=2><B>ITEM 2: THE REORGANIZATION</B></font></td>
  </tr></table>

<p><table width=600><tr>
    <td>
      <div align="center"><font size=2><B>SUMMARY</B></font></div>
    </td>
  </tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>The following is a
summary of certain information contained elsewhere in this Proxy Statement and
Prospectus (including documents incorporated by reference) and is qualified in its
entirety by reference to the more complete information contained in this Proxy Statement
and Prospectus and in the Agreement and Plan, attached hereto as Exhibit I.</I></FONT></td></tr></table>

<p><table width=600><tr><td><font size=2><B>The Reorganization</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the
Reorganization, MuniYield Insured will acquire substantially all  of the assets and
assume substantially all of the liabilities of MuniInsured  solely in exchange for newly
issued shares of MuniYield Insured Common Stock.  MuniInsured will distribute the
MuniYield Insured Common Stock (plus cash in  lieu of fractional shares) to holders of
MuniInsured Common Stock and will then  liquidate and dissolve under Maryland law and
terminate its registration under  the Investment Company Act.</font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2><B>What Will Be the Results of the Reorganization?</B></font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Agreement
and Plan is approved and the Reorganization is completed:</font></td></tr></table>

<table width=600>
  <tr>
    <td width=3%></td>
    <td width=1% valign=top><font size=3>&#149;</font></td>
    <td width=3%></td>
    <td width=93%><font size=2>MuniYield
Insured will acquire substantially all of the assets and  assume substantially all of the
liabilities of MuniInsured;</font></td></tr></table>


<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2">6 </font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT>
<p>&nbsp; <!-- *************************************************************************** -->
  <!-- MARKER PAGE="sheet: 7; page: 7" -->
<p>&nbsp;
<table width=600>
  <tr>
    <td width=3%></td>
    <td width=1% valign=top><font size=3>&#149;</font></td>
    <td width=3%></td>
    <td width=93%><font size=2>Stockholders
of MuniInsured will become stockholders of MuniYield Insured;</font></td></tr></table>

<table width=600>
  <tr>
    <td width=3%></td>
    <td width=1% valign=top><font size=3>&#149;</font></td>
    <td width=3%></td>
    <td width=93%><font size=2>Stockholders
of MuniInsured will receive full shares of MuniYield  Insured Common Stock (plus cash in
lieu of fractional shares) equal to  the aggregate net asset value of the shares of
MuniInsured Common Stock  currently owned by such stockholders.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Reorganization
will be structured as a tax-free transaction for Federal tax  purposes. Neither
MuniInsured nor the stockholders of MuniInsured will recognize  gain or loss in the
Reorganization (except to the extent that a holder of  MuniInsured Common Stock receives
cash representing an interest in fractional  shares of MuniYield Insured Common Stock).
Stockholders should consult their tax  advisers regarding the effect of the
Reorganization in light of their individual  circumstances.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Following the
Reorganization, the Directors of MuniInsured will take action to  deregister MuniInsured
under the Investment Company Act and to dissolve  MuniInsured under Maryland law.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>What are the Reasons for the Reorganization?</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of
Directors of MuniInsured has determined that the Fund&#146;s common  stockholders are
likely to benefit from the Reorganization. In addition, the  Directors have determined
that, with respect to net asset value, the interests  of existing stockholders of
MuniInsured will not be diluted as a result of the  Reorganization. The Directors believe
that the Reorganization is in the best  interests of MuniInsured and its stockholders.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In reaching its
decision, the Board considered a number of factors including the  following:</font></td></tr></table>

<br>
<table width=600>
  <tr>
    <td width=3%></td>
    <td width=1% valign=top><font size=3>&#149;</font></td>
    <td width=3%></td>
    <td width=93%><font size=2>After
the Reorganization, MuniInsured&#146;s stockholders will remain  invested in a closed-end
fund with an investment objective and policies  substantially similar to MuniInsured&#146;s
current investment objective and  policies but that can also use leverage through the
issuance of  preferred stock to seek to enhance yield to its common stockholders;</font></td></tr></table>

<br>
<table width=600>
  <tr>
    <td width=3%></td>
    <td width=1% valign=top><font size=3>&#149;</font></td>
    <td width=3%></td>
    <td width=93%><font size=2>After
the Reorganization, MuniInsured&#146;s stockholders will be invested in a  fund with
substantially greater net assets; and</font></td></tr></table>

<br>
<table width=600>
  <tr>
    <td width=3%></td>
    <td width=1% valign=top><font size=3>&#149;</font></td>
    <td width=3%></td>
    <td width=93%><font size=2>After the Reorganization, excluding the expenses
      attributable to MuniYield Insured&#146;s preferred stock, each Fund&#146;s common
      stockholders should experience lower expenses per share and economies of
      scale.</font></td>
  </tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although the total operating
      expense ratio attributable to shares of common stock of the Combined Fund
      including assets acquired through the issuance of preferred stock is expected
      to be higher than MuniInsured&#146;s current total operating expense ratio,
      this is solely as a result of the Combined Fund&#146;s leverage through
      Auction Market Preferred Stock (&#147;AMPS&#148;). The Directors of MuniInsured
      determined that the potential benefits to common stockholders of the Combined
      Fund from the ability to use leverage to seek to enhance yield outweighed
      the potentially higher overall operating expense ratio.</font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Directors of
MuniYield Insured also determined that the Reorganization would  benefit the common
stockholders of MuniYield Insured and that, with respect to  net asset value, the
interests of existing stockholders of MuniYield Insured  would not be diluted as a result
of the Reorganization. The Directors of  MuniYield Insured further determined that,
although the Reorganization is not  expected to directly benefit the holders of shares of
any series of AMPS of  MuniYield Insured, the Reorganization will not adversely affect
the holders of  shares of any series of AMPS of MuniYield Insured. The expenses of the
Reorganization will not be borne by the holders of shares of AMPS of MuniYield  Insured.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Directors of
MuniInsured unanimously approved the Reorganization at a  meeting held on November 13,
2003 and recommend that you vote to approve the  Agreement and Plan.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See &#147;Pro
Forma Fee Table&#148; below and &#147;Agreement and Plan of  Reorganization&#151;Potential
Benefits to Holders of Common Stock of the Funds as a  Result of the Reorganization.&#148;</font></td></tr></table>


<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 7</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 8; page: 8" -->






<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If all of the requisite approvals
      are obtained, it is anticipated that the Reorganization will occur as soon
      as practicable after such approval, provided that the Funds have obtained
      prior to that time a favorable opinion of counsel concerning the tax consequences
      of the Reorganization as set forth in the Agreement and Plan. Under the
      Agreement and Plan, however, the Board of Directors of either Fund may cause
      the Reorganization to be postponed or abandoned in certain circumstances
      should such Board determine that it is in the best interest of the stockholders
      of that Fund to do so. The Agreement and Plan may be terminated, and the
      Reorganization abandoned, whether before or after approval by the stockholders
      of MuniInsured, at any time prior to the Closing Date (as defined below),
      (i) by mutual consent of the Boards of Directors of the Funds or (ii) by
      the Board of Directors of either Fund, if any condition to that Fund&#146;s
      obligations has not been fulfilled or waived by such Fund&#146;s Board of
      Directors. The Fund&#146;s Boards may together amend the Agreement and Plan to
      change the terms of the Reorganization at any time prior to the approval
      thereof by the stockholders of MuniInsured.</font></td>
  </tr></table>

<p>
<table width=600>
  <tr>
    <td  align=center><font size=2><b>Fee Table for Common Stock of MuniYield
      Insured, MuniInsured and the<br>
      Pro Forma MuniYield Insured Combined Fund as of October 31, 2003 <br>
      (unaudited)(a)</b></font></td>
  </tr>
</table>
<br>
<table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following Pro
Forma Fee Table illustrates, assuming the Reorganization had  taken place on October 31,
2003, the expenses to be incurred by each Fund  individually and the estimated pro forma
expenses to be incurred by the Pro  Forma MuniYield Insured Combined Fund after the
Reorganization. Future expenses  may be greater or less than those indicated below.</font></td></tr></table>

<p>
<table border=0 cellspacing=0 cellpadding=0 width="600">
  <tr valign="bottom">
    <td height="29">&nbsp;</td>
    <td height="29">&nbsp;</td>
    <td height="29" align="center" colspan="5"><font face="Times New Roman" size="2"><b><font size="1">Actual</font></b></font>
      <hr size="1" noshade>
    </td>
    <td height="29" align="center">&nbsp;</td>
    <td height="29" align="center" colspan="2"><font face="Times New Roman" size="2"><b><font size="1">&nbsp;
      Pro Forma</font></b></font>
      <hr size="1" noshade>
    </td>
  </tr>
  <tr valign="bottom">
    <td height="29">&nbsp;</td>
    <td height="29">&nbsp;</td>
    <td height="29" align="center" colspan="2"><font face="Times New Roman" size="2"><b><font size="1">MuniYield<br>
      Insured </font></b></font>
      <hr size="1" noshade>
    </td>
    <td height="29" align="center">&nbsp;</td>
    <td height="29" align="center" colspan="2"><font face="Times New Roman" size="2"><b><font size="1">MuniInsured</font><font face="Times New Roman" size="2"><b><font size="1"><br>
      </font></b></font></b></font>
      <hr size="1" noshade>
    </td>
    <td height="29" align="center">&nbsp;</td>
    <td height="29" align="center" colspan="2"><font face="Times New Roman" size="2"><b><font size="1">MuniYield<br>
      Insured<br>
      Combined<br>
      Fund </font></b></font>
      <hr size="1" noshade>
    </td>
  </tr>
  <tr valign="bottom">
    <td height="29"> <font size="2" color="black">Common Stockholder Transaction
      Expenses</font></td>
    <td height="29"> <font size="2" color="black">&nbsp;</font></td>
    <td height="29" align="right"> <font size="2" color="black">&nbsp;</font></td>
    <td height="29"> <font size="2" color="black">&nbsp;</font></td>
    <td height="29">&nbsp;</td>
    <td height="29" align="right"> <font size="2" color="black">&nbsp;</font></td>
    <td height="29"> <font size="2" color="black">&nbsp;</font></td>
    <td height="29"> <font size="2" color="black">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td height="29" align="right"> <font size="2" color="black">&nbsp;</font></td>
    <td height="29"> <font size="2" color="black">&nbsp;</font></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">Maximum Sales Load (as a percentage of the offering price)<br>
      &nbsp;&nbsp;&nbsp;&nbsp; imposed on purchases of Common Stock</font></td>
    <td> <font size="2">&nbsp;</font></td>
    <td align="right"> <font size="2">None</font></td>
    <td> <font size="2">(b)</font></td>
    <td>&nbsp;</td>
    <td align="right"> <font size="2"> None</font></td>
    <td> <font size="2">(b)</font></td>
    <td> <font size="2">&nbsp;</font></td>
    <td align="right"> <font size="2">None</font></td>
    <td> <font size="2">(c)</font></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">Dividend Reinvestment and Cash Purchase Plan Fees</font></td>
    <td> <font size="2">&nbsp;</font></td>
    <td align="right"> <font size="2">None</font></td>
    <td> <font size="2">&nbsp;</font></td>
    <td>&nbsp;</td>
    <td align="right"> <font size="2"> None</font></td>
    <td> <font size="2">&nbsp;</font></td>
    <td> <font size="2">&nbsp;</font></td>
    <td align="right"> <font size="2">None</font></td>
    <td> <font size="2">&nbsp;</font></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2" color="black">Annual Expenses (as a percentage of average
      net<br>
      </font> <font size="2"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; </font><font color="black">assets
      attributable to </font>Common Stock(d)</font></td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td align="right"> <font size="2"><b>&nbsp;</b></font></td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td align="right"> <font size="2"><b>&nbsp;</b></font></td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td align="right"> <font size="2"><b>&nbsp;</b></font></td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">Investment Advisory Fees(e)</font></td>
    <td> <font size="2">&nbsp;</font></td>
    <td align="right"> <font size="2">0.73%</font></td>
    <td>&nbsp; </td>
    <td>&nbsp;</td>
    <td align="right"> <font size="2"> 0.50%</font></td>
    <td>&nbsp; </td>
    <td> <font size="2">&nbsp;</font></td>
    <td align="right"> <font size="2">0.71%</font></td>
    <td>&nbsp; </td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">Interest Payments on Borrowed Funds</font></td>
    <td> <font size="2">&nbsp;</font></td>
    <td align="right"> <font size="2">None</font></td>
    <td> <font size="2">&nbsp;</font></td>
    <td>&nbsp;</td>
    <td align="right"> <font size="2"> None</font></td>
    <td> <font size="2">&nbsp;</font></td>
    <td> <font size="2">&nbsp;</font></td>
    <td align="right"> <font size="2">None</font></td>
    <td> <font size="2">&nbsp;</font></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">Other Expenses</font></td>
    <td> <font size="2">&nbsp;</font></td>
    <td align="right"> <font size="2">0.22%</font></td>
    <td>&nbsp; </td>
    <td>&nbsp;</td>
    <td align="right"> <font size="2"> 0.29%</font></td>
    <td>&nbsp; </td>
    <td> <font size="2">&nbsp;</font></td>
    <td align="right"> <font size="2">0.21%</font></td>
    <td>&nbsp; </td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">Total Annual Expenses(g)</font></td>
    <td> <font size="2">&nbsp;</font></td>
    <td align="right"> <font size="2">0.95%</font></td>
    <td> <font size="2">(f)</font></td>
    <td>&nbsp;</td>
    <td align="right"> <font size="2"> 0.79%</font></td>
    <td>&nbsp; </td>
    <td> <font size="2">&nbsp;</font></td>
    <td align="right"> <font size="2">0.92%</font></td>
    <td> <font size="2">(f)</font></td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">
      <hr noshade size="2">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">
      <hr noshade size="2">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">
      <hr noshade size="2">
    </td>
    <td>&nbsp;</td>
  </tr>
</table>
<table width=600><tr><td><hr size=1 noshade align=left  width=75></td></tr></table>

<table width=600><tr><td width=4% valign=top><font size="1">(a) </font></td><td width=2%><font size="1"></font></td><td width=94%><font size="1"> No
information is presented with respect to AMPS because no Fund&#146;s  operating expenses
are, and the expenses of the Reorganization will not be,  borne by the holder of AMPS.
Generally, AMPS are sold at a fixed  liquidation preference of $25,000 per share and
investment return is set at  an auction.</font></td></tr></table>

<table width=600><tr><td width=4% valign=top><font size="1">(b) </font></td><td width=2%><font size="1"></font></td><td width=94%><font size="1"> Shares
of common stock purchased in the secondary market may be subject to  brokerage commission
or other charges. </font></td></tr></table>

<table width=600><tr><td width=4% valign=top><font size="1">(c) </font></td><td width=2%><font size="1"></font></td>
    <td width=94%><font size="1">No sales load will be charged on the issuance
      of shares in the Reorganization. Shares of common stock are not available
      for purchase from the Funds but may be purchased through a broker-dealer
      subject to individually negotiated commission rates. </font></td>
  </tr></table>

<table width=600><tr><td width=4% valign=top><font size="1">(d) </font></td><td width=2%><font size="1"></font></td><td width=94%><font size="1">The
pro forma annual  expenses for the Pro Forma MuniYield Insured Combined Fund are
projections for a  12-month period. </font></td></tr></table>

<table width=600><tr><td width=4% valign=top><font size="1">(e) </font></td><td width=2%><font size="1"></font></td><td width=94%><font size="1">Based
on average net assets of each Fund and the Pro Forma  MuniYield Insured Combined Fund
(excluding assets attributable to  AMPS, if any). If assets attributable to AMPS, if any,
are included, the  Investment Advisory Fee for each Fund and the Pro Forma MuniYield
Insured  Combined Fund would be 0.50%.</font></td></tr></table>

<table width=600><tr><td width=4% valign=top><font size="1">(f) </font></td><td width=2%><font size="1"></font></td>
    <td width=94%><font size="1"> The Investment Adviser may waive a portion of
      the Fund&#146;s investment advisory fee in connection with the Fund&#146;s
      investment in an affiliated money market fund. After taking into account
      this waiver, the Total Annual Expenses for MuniYield Insured and the Pro
      Forma MuniYield Insured Combined Fund excluding assets attributable to AMPS
      are 0.94% and 0.91%, respectively and including assets attributable to AMPS
      are 0.64% and 0.64%, respectively.</font></td>
  </tr></table>

<table width=600><tr><td width=4% valign=top><font size="1">(g) </font></td><td width=2%><font size="1"></font></td>
    <td width=94%><font size="1"> Based on average net assets as of October 31,
      2003 of each Fund and the Pro Forma MuniYield Insured Combined Fund (excluding
      assets attributable to AMPS, if any). If assets attributable to AMPS are
      included, the Total Annual Expenses (excluding any fee waiver) for MuniYield
      Insured, MuniInsured and the Pro Forma MuniYield Insured Combined Fund would
      be 0.65%, 0.79%, 0.64%, respectively.</font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The foregoing Fee
Table and the Examples below are intended to assist investors  in understanding the costs
and expenses that a stockholder of each Fund will  bear directly or indirectly as
compared to the costs and expenses that would be  borne by such investors taking into
account the Reorganization.</font></td></tr></table>


<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 8</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 9; page: 9" -->



<p><table width=600><tr>
    <td><font size=2><B>EXAMPLES:</B></font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These examples
assume that a stockholder invests $10,000 in the relevant Fund  for the time periods
indicated, that the investment has a 5% return each year,  and that each Fund&#146;s
operating expenses remain the same. The figures shown would  be the same whether a
stockholder sold shares at the end of a period or kept  them. Although a stockholder&#146;s
actual costs may be higher or lower, based on  these assumptions your costs would be:</font></td></tr></table>

<p><table width=600><tr>
    <td  align=center><font size=2><B>Cumulative Expenses Paid on Common Stock<BR>
      of each Fund and the Pro Forma MuniYield Insured<BR>
      Combined Fund for the Periods Indicated:</B></font></td>
  </tr></table>


<br>
<table border=0 cellspacing=0 cellpadding=0 width="600">
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="center"><font size="1"><b>1 Year</b></font>
      <hr size="1" noshade>
    </td>
    <td align="center">&nbsp;</td>
    <td align="center"><font size="1"><b>3 Years</b></font>
      <hr size="1" noshade>
    </td>
    <td align="center">&nbsp;</td>
    <td align="center"><font size="1"><b>5 Years</b></font>
      <hr size="1" noshade>
    </td>
    <td align="center">&nbsp;</td>
    <td align="center"><font size="1"><b>10 Years</b></font>
      <hr size="1" noshade>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font face="Times New Roman" size="2">MuniYield Insured </font></p>
    </td>
    <td align="center">
      <p><font face="Times New Roman" size="2">$10</font></p>
    </td>
    <td align="center">
      <p align=right>&nbsp;&nbsp;&nbsp;</p>
    </td>
    <td align="center">
      <p><font face="Times New Roman" size="2">$30</font></p>
    </td>
    <td align="center">
      <p align=right>&nbsp;&nbsp;&nbsp;</p>
    </td>
    <td align="center">
      <p><font face="Times New Roman" size="2">$53</font></p>
    </td>
    <td align="center">
      <p align=right>&nbsp;&nbsp;&nbsp;</p>
    </td>
    <td align="center">
      <p><font face="Times New Roman" size="2">$117</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font face="Times New Roman" size="2">MuniInsured </font></p>
    </td>
    <td align="center">
      <p><font face="Times New Roman" size="2">$&nbsp;&nbsp;8</font></p>
    </td>
    <td align="center">
      <p align=right>&nbsp;</p>
    </td>
    <td align="center">
      <p><font face="Times New Roman" size="2">$25</font></p>
    </td>
    <td align="center">
      <p align=right>&nbsp;</p>
    </td>
    <td align="center">
      <p><font face="Times New Roman" size="2">$44</font></p>
    </td>
    <td align="center">
      <p align=right>&nbsp;</p>
    </td>
    <td align="center">
      <p><font face="Times New Roman" size="2">$&nbsp;&nbsp;98</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font face="Times New Roman" size="2">Pro Forma MuniYield Insured Combined
        Fund(a)</font></p>
    </td>
    <td align="center">
      <p><font face="Times New Roman" size="2">$&nbsp;&nbsp;9</font></p>
    </td>
    <td align="center">
      <p align=right>&nbsp;</p>
    </td>
    <td align="center">
      <p><font face="Times New Roman" size="2">$29</font></p>
    </td>
    <td align="center">
      <p align=right>&nbsp;</p>
    </td>
    <td align="center">
      <p><font face="Times New Roman" size="2">$51</font></p>
    </td>
    <td align="center">
      <p align=right>&nbsp;</p>
    </td>
    <td align="center">
      <p><font face="Times New Roman" size="2">$113</font></p>
    </td>
  </tr>
</table>
<table width=600><tr><td><hr size=1 noshade align=left  width=75></td></tr></table>
<table width=600><tr><td width=4% valign=top><font size="1">(a) </font></td><td width=2%><font size="1"></font></td>
    <td width=94%><font size="1">Assumes that the Reorganization took place on
      October 31, 2003.</font></td>
  </tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Examples set forth above
      assume that shares of Common Stock were purchased in the initial offerings
      and that all dividends and distributions were reinvested and uses a 5% annual
      rate of return as mandated by the regulations of the SEC. <b>The Examples
      should not be considered a representation of past or future expenses or
      annual rates of return. Actual expenses or annual rates of return may be
      more or less than those assumed for purposes of the Example.</b> See &#147;Comparison
      of the Funds&#148; and &#147;The Reorganization &#151; Potential Benefits
      to Common Stockholders of the Funds as a Result of the Reorganization.&#148;</font></td>
  </tr></table>


<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 9</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT>
<p>&nbsp; <!-- *************************************************************************** -->
  <!-- MARKER PAGE="sheet: 10; page: 10" -->
<p>&nbsp;
<table width=600>
  <tr>
    <td width=168 valign=top><font size="2"><b>MuniYield Insured</b></font></td>
    <td width=420><font size="2"> MuniYield Insured was incorporated under the
      laws of the State of Maryland on January 13, 1992 and commenced operations
      on March 27, 1992.</font></td>
  </tr>
</table>
<br>
<table width=600>
  <tr>
    <td width=169>&nbsp;</td>
    <td width=419><font size=2>MuniYield Insured has outstanding shares of Common
      Stock and seven series of AMPS, designated Series A, Series B, Series C,
      Series D, Series E, Series F and Series G. As of February 27, 2004, MuniYield
      Insured had net assets (including assets attributable to all series of MuniYield
      Insured AMPS) of approximately $1.4 billion.</font></td>
  </tr></table>

<P><table width=600><TR>
    <TD width=169 valign=top><font size=2> <b>MuniInsured </b></FONT></TD>
    <TD width=419 valign=top><font size=2> MuniInsured was incorporated under
      the laws of the State of Maryland on July 7, 1987 and commenced operations
      on October 26, 1987.</font></TD>
  </TR></TABLE>

<br>
<table width=600>
  <tr>
    <td width=168>&nbsp;</td>
    <td width=420><font size=2>MuniInsured has outstanding shares of Common Stock.
      As of February 27, 2004, MuniInsured had net assets of $81.2 million.</font></td>
  </tr></table>

<P><table width=600><TR>
    <TD width=29% valign=top><font size=2> <b>Comparison of the Funds</b></FONT></TD>
    <TD width=71% valign=top><FONT SIZE="2"><I>Investment Objectives</I>. Each
      Fund is a non-diversified, closed end management investment company. The
      investment objectives of MuniYield Insured and MuniInsured are substantially
      similar. Each Fund seeks to provide stockholders with as high a level of
      current income exempt from Federal income taxes as is consistent with its
      investment policies and prudent investment management by investing primarily
      in a portfolio of long-term, investment-grade municipal obligations the
      interest on which, in the opinion of bond counsel to the issuer, is exempt
      from Federal income taxes.</FONT></TD>
  </TR></TABLE>

<br>
<table width=600>
  <tr>
    <td width=167>&nbsp;</td>
    <td width=421><FONT SIZE="2"><I>Investment Strategies</I>. The investment
      strategies used by each Fund are substantially similar. Each Fund seeks
      to achieve its objective by investing primarily in municipal obligations
      issued on behalf of a state, its political subdivisions, agencies and instrumentalities
      and obligations of other qualifying issuers, such as issuers located in
      Puerto Rico, the U.S. Virgin Islands and Guam, that pay interest exempt,
      in the opinion of bond counsel to the issuer, from Federal income tax (&#147;Municipal
      Bonds&#148;). Each Fund invests at least 80% of its assets in Municipal
      Bonds and each Fund also invests at least 80% of its assets in Municipal
      Bonds that are covered by insurance guaranteeing the timely payment of principal
      at maturity and interest when due. Each Fund invests primarily in long-term,
      investment grade Municipal Bonds.</FONT></td>
  </tr></table>

<br>
<table width=600>
  <tr>
    <td width=166>&nbsp;</td>
    <td width=422><font size=2>As of February 27, 2004, the weighted average maturities
      of the portfolios of MuniYield Insured and MuniInsured were 20.55 years
      and 21.13 years, respectively. The average maturity of each Fund&#146;s
      portfolio securities, and, therefore, each Fund&#146;s portfolio as a whole,
      will vary from time to time based upon FAM&#146;s assessment of economic
      and market conditions. See &#147;Comparison of the Funds &#151; Investment
      Objective and Policies.&#148;</font></td>
  </tr></table>

<br>
<table width=600>
  <tr>
    <td width=164>&nbsp;</td>
    <td width=424><FONT SIZE="2"><I>Main Differences in Investment Strategy.</I>
      The main difference in investment strategy between the Funds is that MuniYield
      Insured uses leverage through the issuance of AMPS to seek to enhance the
      yield to holders of common stock. MuniInsured does not use leverage through
      the issuance of AMPS. See &#147;Risk Factors and Special Considerations
      &#151; Leverage.&#148;</FONT></td>
  </tr></table>

<br>
<table width=600>
  <tr>
    <td width=162>&nbsp;</td>
    <td width=426><font size=2><i>Capital Stock.</i> As set forth above, each
      Fund has outstanding Common Stock. MuniYield Insured also has outstanding
      AMPS. The Common Stock of MuniInsured is traded on the AMEX. The Common
      Stock of MuniYield Insured is traded on the NYSE. As of February 27, 2004,
      (i) the</font></td>
  </tr></table>


<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 10</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT>
<p>&nbsp; <!-- *************************************************************************** -->
  <!-- MARKER PAGE="sheet: 11; page: 11" -->
<p>&nbsp;
<table width=600>
  <tr>
    <td width=162>&nbsp;</td>
    <td width=426><font size=2>net asset value per share of MuniInsured Common
      Stock was $_____ and the market price per share was $_____ and (ii) the
      net asset value per share of MuniYield Insured Common Stock was $_____ and
      the market price per share was $_____. The AMPS of MuniYield Insured have
      a liquidation preference of $25,000 per share and are sold principally at
      auction. See &#147;Comparison of the Funds &#151;Capital Stock.&#148;</font></td>
  </tr></table>

<br>
<table width=600>
  <tr>
    <td width=161>&nbsp;</td>
    <td width=427><font size=2>MuniYield Insured may issue AMPS representing up
      to approximately 35% of its total assets. Following the Reorganization,
      it is anticipated that the Combined Fund will be permitted to issue AMPS
      representing up to approximately 35% of its total assets.</font></td>
  </tr></table>

<br>
<table width=600>
  <tr>
    <td width=161>&nbsp;</td>
    <td width=427><font size=2>Auctions are generally held every seven or 28 days
      for the AMPS of MuniYield Insured unless the Fund elects, subject to certain
      limitations, to have a special dividend period. See &#147;Comparison of
      the Funds &#151; Capital Stock.&#148; The following table provides information
      about the dividend rates for each series of MuniYield Insured&#146;s AMPS
      as of a recent auction date.</font></td>
  </tr></table>


<br>
<table border=0 cellspacing=0 cellpadding=0 width="600">
  <tr valign="bottom">
    <td width="168">&nbsp;</td>
    <td align="center" width="113"><b><font size="1">Auction Date</font></b>
      <hr size="1" noshade>
    </td>
    <td align="center" width="11">&nbsp;</td>
    <td align="center" width="56"><b><font size="1">Series</font></b>
      <hr size="1" noshade>
    </td>
    <td align="center" width="20">&nbsp;</td>
    <td align="center" colspan="2">
      <div><b><font size="1">Auction<br>
        Schedule</font></b></div>
      <hr size="1" noshade width="95%">
    </td>
    <td align="center" width="108"><b><font size="1">Dividend Rate</font></b>
      <hr size="1" noshade>
    </td>
  </tr>
  <tr valign="bottom">
    <td height="16" width="168">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td height="16" width="113"> <font size="2">&nbsp;</font></td>
    <td height="16" width="11">&nbsp;</td>
    <td height="16" align="center" width="56"> <font size="2">A</font></td>
    <td height="16" align="center" width="20">&nbsp;</td>
    <td height="16" align="right" width="76"> <font size="2">28 day</font></td>
    <td height="16" align="right" width="48">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td height="16" width="108"> <font size="2">&nbsp;</font></td>
  </tr>
  <tr valign="bottom">
    <td width="168">&nbsp;</td>
    <td width="113"> <font size="2">&nbsp;</font></td>
    <td width="11">&nbsp;</td>
    <td align="center" width="56"> <font size="2">B</font></td>
    <td align="center" width="20">&nbsp;</td>
    <td align="right" width="76"> <font size="2">28 day</font></td>
    <td align="right" width="48">&nbsp;</td>
    <td width="108"> <font size="2">&nbsp;</font></td>
  </tr>
  <tr valign="bottom">
    <td width="168">&nbsp;</td>
    <td width="113"> <font size="2">&nbsp;</font></td>
    <td width="11">&nbsp;</td>
    <td align="center" width="56"> <font size="2">C</font></td>
    <td align="center" width="20">&nbsp;</td>
    <td align="right" width="76"> <font size="2">28 day</font></td>
    <td align="right" width="48">&nbsp;</td>
    <td width="108"> <font size="2">&nbsp;</font></td>
  </tr>
  <tr valign="bottom">
    <td width="168">&nbsp;</td>
    <td width="113"> <font size="2">&nbsp;</font></td>
    <td width="11">&nbsp;</td>
    <td align="center" width="56"> <font size="2">D</font></td>
    <td align="center" width="20">&nbsp;</td>
    <td align="right" width="76"> <font size="2">28 day</font></td>
    <td align="right" width="48">&nbsp;</td>
    <td width="108"> <font size="2">&nbsp;</font></td>
  </tr>
  <tr valign="bottom">
    <td width="168">&nbsp;</td>
    <td width="113"> <font size="2">&nbsp;</font></td>
    <td width="11">&nbsp;</td>
    <td align="center" width="56"> <font size="2">E</font></td>
    <td align="center" width="20">&nbsp;</td>
    <td align="right" width="76"> <font size="2">7 day</font></td>
    <td align="right" width="48">&nbsp;</td>
    <td width="108"> <font size="2">&nbsp;</font></td>
  </tr>
  <tr valign="bottom">
    <td width="168">&nbsp;</td>
    <td width="113"> <font size="2">&nbsp;</font></td>
    <td width="11">&nbsp;</td>
    <td align="center" width="56"> <font size="2">F</font></td>
    <td align="center" width="20">&nbsp;</td>
    <td align="right" width="76"> <font size="2">28 day</font></td>
    <td align="right" width="48">&nbsp;</td>
    <td width="108"> <font size="2">&nbsp;</font></td>
  </tr>
  <tr valign="bottom">
    <td width="168">&nbsp;</td>
    <td width="113"> <font size="2">&nbsp;</font></td>
    <td width="11">&nbsp;</td>
    <td align="center" width="56"> <font size="2">G</font></td>
    <td align="center" width="20">&nbsp;</td>
    <td align="right" width="76"> <font size="2">7 day</font></td>
    <td align="right" width="48">&nbsp;</td>
    <td width="108"> <font size="2">&nbsp;</font></td>
  </tr>
</table>
<br>
<table width=600>
  <tr>
    <td width=160>&nbsp;</td>
    <td width=428><FONT SIZE="2"><I>Use of Leverage by MuniYield Insured.</I>
      Under normal market conditions, the income earned on MuniYield Insured&#146;s
      portfolio should exceed the dividend rate the Fund must pay to holders of
      AMPS. Thus, MuniYield Insured&#146;s use of AMPS should provide common stockholders
      with a higher yield than they would receive if the Fund were not leveraged,
      although no assurance can be given that the use of AMPS will result in a
      higher yield or return to common stockholders.</FONT></td>
  </tr></table>

<br>
<table width=600>
  <tr>
    <td width=159>&nbsp;</td>
    <td width=429><font size=2>The use of leverage by MuniYield Insured creates
      certain risks for common stockholders, including the greater likelihood
      of higher volatility of the Fund&#146;s yield, its net asset value and the
      market price of its common stock. Leverage also creates the risk that the
      yield or return on shares of MuniYield Insured&#146;s common stock will
      be reduced or eliminated to the extent the dividends paid on AMPS and other
      expenses of the AMPS exceed the yield or return earned by the Fund on its
      investments. Furthermore, since any decline in the value of the MuniYield
      Insured&#146;s investments will affect only the common stockholders, in
      a declining market the use of leverage will cause the Fund&#146;s net asset
      value to decrease more than it would if the Fund were not leveraged. This
      decrease in net asset value will likely also cause a decline in the market
      price for shares of common stock. No assurance can be given that MuniYield
      Insured will earn a higher yield or return on its investment portfolio than
      the then-current dividend rate (and any additional distribution) it pays
      on the AMPS. Under certain circumstances, when MuniYield Insured is required
      to allocate taxable income to holders of AMPS, the Fund anticipates that
      the terms of such preferred stock will require the Fund to make an additional
      distribution to such holders in an amount approximately equal to the tax
      liability resulting from such allocation.</font></td>
  </tr></table>


<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 11</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT>
<p>&nbsp; <!-- *************************************************************************** -->
  <!-- MARKER PAGE="sheet: 12; page: 12" -->
<p>&nbsp;
<table width=600>
  <tr>
    <td width=159>&nbsp;</td>
    <td width=429><font size=2>Under certain conditions, the benefits of leverage
      to common stockholders will be reduced or eliminated and MuniYield Insured&#146;s
      leveraged capital structure could result in a lower yield or return to common
      stockholders than if the Fund were not leveraged. In particular, during
      times of rising interest rates, the market value of MuniYield Insured&#146;s
      portfolio investments and consequently, the net asset value of its shares,
      may decline. MuniYield Insured&#146;s leveraging of its portfolio through
      the use of AMPS may accentuate the potential decline, since both the cost
      of issuing the preferred stock and any decline in the value of the portfolio
      investments (including investments purchased with the proceeds of the preferred
      stock) will be borne entirely by the holders of the common stock.</font></td>
  </tr></table>

<br>
<table width=600>
  <tr>
    <td width=158>&nbsp;</td>
    <td width=430><FONT SIZE="2"><I>Portfolio Management.</I> The investment adviser
      for each Fund is FAM. FAM is responsible for the management of each Fund&#146;s
      investment portfolio and for providing administrative services to each Fund.
      William Bock serves as the portfolio manager for each Fund and, after the
      Reorganization, will serve as the portfolio manager for the Combined Fund.
      See &#147;Comparison of the Funds &#151;Management of the Funds.&#148;</FONT></td>
  </tr></table>

<br>
<table width=600>
  <tr>
    <td width=157>&nbsp;</td>
    <td width=431><FONT SIZE="2"><I>Advisory Fees.</I> FAM is an affiliate of
      Merrill Lynch Investment Managers, L.P. (&#147;MLIM&#148;). Both FAM and
      MLIM are owned and controlled by Merrill Lynch &amp; Co., Inc. (&#147;ML
      &amp; Co.&#148;). FAM was organized as an investment adviser in 1977 and
      offers investment advisory services to more than 50 registered investment
      companies. FAM and its affiliates, including MLIM, act as investment adviser
      for over 100 registered investment companies and also offer portfolio management
      and portfolio analysis services to individuals and institutional accounts.
      See &#147;Comparison of the Funds &#151; Management of the Funds.&#148;</FONT></td>
  </tr></table>

<br>
<table width=600>
  <tr>
    <td width=157>&nbsp;</td>
    <td width=431><font size=2>Pursuant to an investment advisory agreement between
      FAM and MuniYield Insured, MuniYield Insured pays FAM a monthly fee at the
      annual rate of 0.50% of the Fund&#146;s average weekly net assets, including
      proceeds from the issuance of AMPS (resulting in an effective management
      fee to common stockholders of approximately 0.73%). Pursuant to an investment
      advisory agreement between FAM and MuniInsured, MuniInsured pays FAM a monthly
      fee at the annual rate of 0.50% of the Fund&#146;s average weekly net assets.
      After the Reorganization, the Combined Fund will pay FAM a monthly fee at
      the annual rate of 0.50% of the Fund&#146;s average weekly net assets, including
      proceeds from the issuance of AMPS (resulting in an effective management
      fee to common stockholders of approximately 0.71%). Solely as a result of
      leverage through the issuance of AMPS, the effective management fees for
      MuniInsured common stockholders will increase from 0.50% to 0.71% after
      the Reorganization although the contractual management fee will remain the
      same. MuniInsured stockholders, however, will potentially benefit from the
      Pro Forma MuniYield Insured Combined Fund&#146;s use of leverage. See &#147;Comparison
      of the Funds &#151; Management of the Funds.&#148;</font></td>
  </tr></table>

<br>
<table width=600>
  <tr>
    <td width=157>&nbsp;</td>
    <td width=431><FONT SIZE="2"><I>Other Significant Fees.</I> The custodian
      for each Fund is State Street Bank and Trust Company (&#147;State Street&#148;).
      The transfer agent, dividend disbursing agent and registrar for the Common
      Stock of each Fund is EquiServe Trust Company, I.A. (&#147;EquiServe&#148;).
      The Bank of New York (&#147;BONY&#148;) is the transfer agent, dividend
      disbursing agent, registrar and auction agent for the AMPS of MuniYield
      Insured (in such capacity, the &#147;Auction Agent&#148;).</FONT> </td>
  </tr></table>


<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 12</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT>
<p>&nbsp; <!-- *************************************************************************** -->
  <!-- MARKER PAGE="sheet: 13; page: 13" -->
<p>&nbsp;
<table width=600>
  <tr>
    <td width=159>&nbsp;</td>
    <td width=429><font size=2>Equiserve, BONY and State Street each receive fees
      for providing these services.</font></td>
  </tr></table>

<br>
<table width=600>
  <tr>
    <td width=159>&nbsp;</td>
    <td width=429><font size=2><i>Overall Annual Expense Ratio. </i>The table
      below sets forth (i) the total annualized operating expense ratio for MuniInsured,
      MuniYield Insured (excluding any advisory fee waivers and/or expense reimbursements)
      and the Pro Forma MuniYield Insured Combined Fund (excluding any advisory
      fee waivers and/or expense reimbursements) based on their respective average
      net assets (excluding assets attributable to MuniYield Insured&#146;s AMPS)
      as of October 31, 2003.</font></td>
  </tr></table>


<br>
<table border=0 cellspacing=0 cellpadding=0 width="600">
  <tr>
    <td valign=bottom width=165>&nbsp;</td>
    <td valign=bottom width=231>&nbsp;</td>
    <td valign=bottom align="center" colspan="2"><font size="1"><b>Approximate<br>
      Average Net Assets<br>
      (Excluding Assets <br>
      Attributable to <br>
      AMPS) as of <br>
      October 31, 2003</b> </font>
      <hr size="1" noshade width="95">
    </td>
    <td valign=bottom align="center" colspan="3"><font size="1"><b>Total <br>
      Annualized <br>
      Operating <br>
      Expense <br>
      Ratio</b> </font>
      <hr size="1" noshade width="65%">
    </td>
  </tr>
  <tr align="center">
    <td valign=bottom width=165 align="left">&nbsp;</td>
    <td valign=bottom width=231 align="left"> <font size="2"><b>MuniInsured</b>
      </font></td>
    <td valign=bottom align="right" width=52> <font size="2">$79.6&nbsp;&nbsp;</font></td>
    <td valign=bottom align="left" width=49><font size="2"> million</font></td>
    <td valign=bottom align="right" width=22>&nbsp;</td>
    <td valign=bottom align="right" width=48> <font size="2">0.79%</font></td>
    <td valign=bottom align="left" width=33>&nbsp;</td>
  </tr>
  <tr align="center">
    <td valign=bottom width=165 align="left">&nbsp;</td>
    <td valign=bottom width=231 align="left"> <font size="2"><b>MuniYield Insured</b></font></td>
    <td valign=bottom align="right" width=52> <font size="2">$952.3&nbsp;&nbsp;</font></td>
    <td valign=bottom align="left" width=49><font size="2">million</font></td>
    <td valign=bottom align="right" width=22>&nbsp;</td>
    <td valign=bottom align="right" width=48> <font size="2">0.95%</font></td>
    <td valign=bottom align="left" width=33><font size="2">*</font></td>
  </tr>
  <tr align="center">
    <td valign=bottom width=165 align="left">&nbsp;</td>
    <td valign=bottom width=231 align="left"> <font size="2"><b>Pro Forma MuniYield
      Insured<br>
      &nbsp;&nbsp;Combined Fund</b> </font></td>
    <td valign=bottom align="right" width=52> <font size="2">$1.0&nbsp;&nbsp;</font></td>
    <td valign=bottom align="left" width=49><font size="2"> billion</font></td>
    <td valign=bottom align="right" width=22>&nbsp;</td>
    <td valign=bottom align="right" width=48> <font size="2">0.92%</font></td>
    <td valign=bottom align="left" width=33><font size="2">*</font></td>
  </tr>
</table>
<table width=600>
  <tr align="left">
    <td width="158">&nbsp;</td>
    <td width="430">
      <hr size=1 noshade align=left  width=75>
    </td>
  </tr>
</table>

<table width=600><tr>
    <td width=29% valign=top align="right"><font size="1">* </font></td>
    <td width=4%><font size="1"></font></td>
    <td width=67%><font size="1">Including the fee waivers and/or expense reimbursements,
      the total annualized operating expense ratio for MuniYield Insured and the
      Pro Forma MuniYield Insured Combined Fund would have been 0.94% and 0.91%,
      respectively.</font></td>
  </tr></table>

<br>
<table width=600>
  <tr>
    <td width=159>&nbsp;</td>
    <td width=429><font size=2>The table below sets forth (i) the total annualized
      operating expense ratio for MuniInsured, MuniYield Insured (excluding any
      advisory fee waivers and/or expense reimbursements) and the Pro Forma MuniYield
      Insured Combined Fund (excluding any advisory fee waivers and/or expense
      reimbursements) based on their respective average net assets (including
      assets attributable to MuniYield Insured&#146;s AMPS) as of October 31,
      2003.</font></td>
  </tr></table>


<br>
<table border=0 cellspacing=0 cellpadding=0 width="600">
  <tr>
    <td valign=bottom width=165>&nbsp;</td>
    <td valign=bottom width=232>&nbsp;</td>
    <td valign=bottom align="center" colspan="2"><font size="1"><b><font size="1">Approximate<br>
      Average Net Assets (Including Assets Attributable to <br>
      AMPS)</font> as of <br>
      October 31, 2003<br>
      </b></font>
      <hr size="1" noshade width="95">
    </td>
    <td valign=bottom align="center" colspan="3"><font size="1"><b>Total <br>
      Annualized <br>
      Operating <br>
      Expense <br>
      Ratio </b> </font>
      <hr size="1" noshade width="65%">
    </td>
  </tr>
  <tr align="center">
    <td valign=bottom width=165 align="left">&nbsp;</td>
    <td valign=bottom width=232 align="left"> <font size="2"><b>MuniInsured</b>
      </font></td>
    <td valign=bottom align="right" width=51> <font size="2">$79.6&nbsp;&nbsp;</font></td>
    <td valign=bottom align="left" width=49><font size="2"> million</font></td>
    <td valign=bottom align="right" width=22>&nbsp;</td>
    <td valign=bottom align="right" width=48> <font size="2">0.79%</font></td>
    <td valign=bottom align="left" width=33>&nbsp;</td>
  </tr>
  <tr align="center">
    <td valign=bottom width=165 align="left">&nbsp;</td>
    <td valign=bottom width=232 align="left"> <font size="2"><b>MuniYield Insured</b></font></td>
    <td valign=bottom align="right" width=51> <font size="2">$1.4&nbsp;&nbsp;</font></td>
    <td valign=bottom align="left" width=49><font size="2">billion</font></td>
    <td valign=bottom align="right" width=22>&nbsp;</td>
    <td valign=bottom align="right" width=48> <font size="2">0.65%</font></td>
    <td valign=bottom align="left" width=33><font size="2">*</font></td>
  </tr>
  <tr align="center">
    <td valign=bottom width=165 align="left">&nbsp;</td>
    <td valign=bottom width=232 align="left"> <font size="2"><b>Pro Forma MuniYield
      Insured<br>
      &nbsp;&nbsp;Combined Fund</b> </font></td>
    <td valign=bottom align="right" width=51> <font size="2">$1.5&nbsp;&nbsp;</font></td>
    <td valign=bottom align="left" width=49><font size="2"> billion</font></td>
    <td valign=bottom align="right" width=22>&nbsp;</td>
    <td valign=bottom align="right" width=48> <font size="2">0.64%</font></td>
    <td valign=bottom align="left" width=33><font size="2">*</font></td>
  </tr>
</table>
<table width=600>
  <tr align="left">
    <td width="158">&nbsp;</td>
    <td width="430">
      <hr size=1 noshade align=left  width=75>
    </td>
  </tr>
</table>
<table width=600>
  <tr>
    <td width=29% valign=top align="right"><font size="1">* </font></td>
    <td width=4%><font size="1"></font></td>
    <td width=67%><font size="1">Including the fee waivers and/or expense reimbursements,
      the total annualized operating expense ratio for MuniYield Insured and the
      Pro Forma MuniYield Insured Combined fund would have been 0.64% and 0.64%,
      respectively.</font></td>
  </tr>
</table>
<br>
<table width=600>
  <tr>
    <td width=159>&nbsp;</td>
    <td width=429><font size=2>Although the total operating expense ratio attributable
      to shares of common stock of the Combined Fund as set forth in the table
      above is expected to be higher than MuniInsured&#146;s current total operating
      expense ratio, this is solely as a result of the Combined Fund&#146;s leverage
      through AMPS. The Directors of MuniInsured determined that the potential
      benefits to common stockholders of the Combined Fund from the ability to
      use leverage to enhance yield outweighed the potentially higher overall
      operating expense ratio.</font></td>
  </tr></table>

<br>
<table width=600>
  <tr>
    <td width=159>&nbsp;</td>
    <td width=429><FONT SIZE="2"><I>Purchases and Sales of Common Stock and AMPS.</I>
      Purchase and sale procedures for the common stock of each Fund are substantially
      similar.</FONT> </td>
  </tr></table>



<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 13</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 14; page: 14" -->



<br>
<table width=600>
  <tr>
    <td width=159>&nbsp;</td>
    <td width=429><font size=2>Investors
typically purchase and sell shares of  common stock of each Fund through a  registered
broker-dealer on the NYSE  (for MuniYield  Insured) or AMEX (for  MuniInsured), thereby
incurring a  brokerage commission set by  such  broker-dealer. Alternatively, investors
may purchase or sell shares of common  stock of the Funds through privately  negotiated
transactions with existing  stockholders.</font></td></tr></table>

<br>
<table width=600>
  <tr>
    <td width=159>&nbsp;</td>
    <td width=429><font size=2>MuniYield Insured AMPS generally are purchased
      and sold at separate auctions conducted on a regular basis by the Auction
      Agent. Unless otherwise permitted by the Fund, existing and potential holders
      of AMPS may only participate in auctions through their broker-dealers. Broker-dealers
      submit the orders of their respective customers who are existing and potential
      holders of AMPS to the Auction Agent. On or prior to each auction date for
      the AMPS (the business day next preceding the first day of each dividend
      period), each holder may submit orders to buy, sell or hold AMPS to its
      broker-dealer. Outside of these auctions, shares of AMPS may be purchased
      or sold through broker-dealers for the AMPS in a secondary trading market
      maintained by the broker-dealers. However, no assurance can be given that
      the market will provide holders with a liquid trading market for the AMPS
      of MuniYield Insured.</font></td>
  </tr></table>

<br>
<table width=600>
  <tr>
    <td width=157>&nbsp;</td>
    <td width=431><FONT SIZE="2"><I>Ratings of AMPS.</I> The AMPS of MuniYield
      Insured have been assigned a rating of AAA from Standard &amp; Poor&#146;s
      (&#147;S&amp;P&#148;) and Aaa from Moody&#146;s Investors Service, Inc.
      (&#147;Moody&#146;s&#148;). See &#147;Comparison of the Funds &#151; Rating
      Agency Guidelines.&#148;</FONT></td>
  </tr></table>

<br>
<table width=600>
  <tr>
    <td width=156>&nbsp;</td>
    <td width=432><FONT SIZE="2"><I>Portfolio Insurance.</I> Under normal circumstances,
      each Fund invests at least 80% of its net assets (including borrowings,
      if any, for investment purposes) in Municipal Bonds either (i) insured under
      an insurance policy obtained by the issuer thereof or any other party or
      (ii) insured under an insurance policy purchased by the Fund. See &#147;Comparison
      of the Funds &#151; Investment Objectives and Policies &#151; Portfolio
      Insurance.&#148;</FONT></td>
  </tr></table>

<br>
<table width=600>
  <tr>
    <td width=155>&nbsp;</td>
    <td width=433><FONT SIZE="2"><I>Ratings of Municipal Obligations</I>. Each
      Fund will invest only in municipal obligations that at the time of purchase
      are considered investment grade. See Exhibit III &#151; &#147;Ratings of
      Municipal Bonds and Commercial Paper.&#148;</FONT></td>
  </tr></table>

<br>
<table width=600>
  <tr>
    <td width=153>&nbsp;</td>
    <td width=435><FONT SIZE="2"><I>Portfolio Transactions.</I> The portfolio
      transactions in which the Funds may engage and procedures for such transactions
      are similar. See &#147;Comparison of the Funds&#151; Portfolio Transactions.&#148;</FONT></td>
  </tr></table>

<br>
<table width=600>
  <tr>
    <td width=152>&nbsp;</td>
    <td width=436><FONT SIZE="2"><I>Dividends and Distributions.</I> The methods
      of dividend payment and distributions with respect to common stock are substantially
      similar for each Fund. See &#147;Comparison of the Funds &#151; Dividends
      and Distributions.&#148;</FONT></td>
  </tr></table>

<br>
<table width=600>
  <tr>
    <td width=153>&nbsp;</td>
    <td width=435><FONT SIZE="2"><I>Net Asset Value.</I> The net asset value per
      share of common stock of each Fund is determined as of the close of business
      (generally, 4:00 p.m., Eastern time) on the last business day of each week.
      Each Fund computes net asset value per share in the same manner. See &#147;Comparison
      of the Funds &#151; Net Asset Value.&#148;</FONT></td>
  </tr></table>

<br>
<table width=600>
  <tr>
    <td width=151>&nbsp;</td>
    <td width=437><FONT SIZE="2"><I>Voting Rights.</I> The corresponding voting
      rights of the holders of shares of each Fund&#146;s common stock are substantially
      similar. See &#147;Comparison of the Funds &#151; Capital Stock.&#148;</FONT></td>
  </tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 14</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT>
<p>&nbsp; <!-- *************************************************************************** -->
  <!-- MARKER PAGE="sheet: 15; page: 15" --> <br>
  <br>
<table width=600>
  <tr>
    <td width=159>&nbsp;</td>
    <td width=429>
<FONT SIZE="2"><I>Stockholder Services.</I> An automatic dividend
      reinvestment plan is available to holders of shares of each Fund&#146;s
      common stock. These plans are similar for both Funds. See &#147;Comparison
      of the Funds &#151; Automatic Dividend Reinvestment Plan.&#148; Other stockholder
      services, including the provision of annual and semi-annual reports, are
      the same for both Funds.</FONT></td>
  </tr></table>

<p><table width=600><tr><td  align=center><font size=2><B>Outstanding Securities of
MuniInsured and<BR>
      MuniYield Insured as of ________________, 2004</B></font></td>
  </tr></table>


<br>
<table border=0 cellspacing=0 cellpadding=0 width="600">
  <tr>
    <td valign=bottom width=126><font size="1"><b>Title of Class</b></font>
      <hr size="1" noshade width="60%" align="left">
    </td>
    <td valign=bottom width=80>&nbsp;</td>
    <td valign=bottom align="center" width=123><font size="1"><b>Number of Shares
      <br>
      Authorized</b> </font>
      <hr size="1" noshade width="75%">
    </td>
    <td valign=bottom align="center" width=125><font size="1"><b>Number of Shares
      <br>
      Held by Fund for Its <br>
      Own Account</b> </font>
      <hr size="1" noshade width="75%">
    </td>
    <td valign=bottom align="center" width=146><font size="1"><b>Number of Shares
      <br>
      Outstanding Exclusive <br>
      of Amount Shown in<br>
      Previous Column</b> </font>
      <hr size="1" noshade width="75%">
    </td>
  </tr>
  <tr>
    <td colspan=2 valign=bottom>
      <p><font face="Times New Roman" size="2"><b>MuniInsured</b></font></p>
    </td>
    <td valign=bottom align="center" width=123>
      <p>&nbsp;</p>
    </td>
    <td valign=bottom align="center" width=125>
      <p>&nbsp;</p>
    </td>
    <td valign=bottom align="center" width=146>
      <p>&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td colspan=2 valign=bottom>
      <p><font face="Times New Roman" size="2">      Common Stock</font></p>
    </td>
    <td valign=bottom align="center" width=123>
      <p><font size="2">150,000,000</font></p>
    </td>
    <td valign=bottom align="center" width=125>
      <p align=center><font face="Times New Roman" size="2">0</font></p>
    </td>
    <td valign=bottom align="center" width=146>
      <p>&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td colspan=2 valign=bottom>
      <p><font face="Times New Roman" size="2"><b>MuniYield Insured</b></font></p>
    </td>
    <td valign=bottom align="center" width=123>
      <p>&nbsp;</p>
    </td>
    <td valign=bottom align="center" width=125>
      <p align=center>&nbsp;</p>
    </td>
    <td valign=bottom align="center" width=146>
      <p>&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td colspan=2 valign=bottom>
      <p><font face="Times New Roman" size="2">      Common Stock</font></p>
    </td>
    <td valign=bottom align="center" width=123>
      <p><font size="2">199,982,400</font></p>
    </td>
    <td valign=bottom align="center" width=125>
      <p align=center><font face="Times New Roman" size="2">0</font></p>
    </td>
    <td valign=bottom align="center" width=146>
      <p>&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td colspan=2 valign=bottom>
      <p><font face="Times New Roman" size="2">      AMPS</font></p>
    </td>
    <td valign=bottom align="center" width=123>
      <p>&nbsp;</p>
    </td>
    <td valign=bottom align="center" width=125>
      <p align=center>&nbsp;</p>
    </td>
    <td valign=bottom align="center" width=146>
      <p>&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td colspan=2 valign=bottom>
      <p><font face="Times New Roman" size="2">            Series&nbsp;A</font></p>
    </td>
    <td valign=bottom align="center" width=123>
      <p><font face="Times New Roman" size="2">2,200</font></p>
    </td>
    <td valign=bottom align="center" width=125>
      <p align=center><font face="Times New Roman" size="2">0</font></p>
    </td>
    <td valign=bottom align="center" width=146>
      <p><font face="Times New Roman" size="2">2,200</font></p>
    </td>
  </tr>
  <tr>
    <td colspan=2 valign=bottom>
      <p><font face="Times New Roman" size="2">            Series&nbsp;B</font></p>
    </td>
    <td valign=bottom align="center" width=123>
      <p><font face="Times New Roman" size="2">2,200</font></p>
    </td>
    <td valign=bottom align="center" width=125>
      <p align=center><font face="Times New Roman" size="2">0</font></p>
    </td>
    <td valign=bottom align="center" width=146>
      <p><font face="Times New Roman" size="2">2,200</font></p>
    </td>
  </tr>
  <tr>
    <td colspan=2 valign=bottom>
      <p><font face="Times New Roman" size="2">            Series&nbsp;C </font></p>
    </td>
    <td valign=bottom align="center" width=123>
      <p><font face="Times New Roman" size="2">2,200</font></p>
    </td>
    <td valign=bottom align="center" width=125>
      <p align=center><font face="Times New Roman" size="2">0</font></p>
    </td>
    <td valign=bottom align="center" width=146>
      <p><font face="Times New Roman" size="2">2,200</font></p>
    </td>
  </tr>
  <tr>
    <td colspan=2 valign=bottom>
      <p><font face="Times New Roman" size="2">            Series&nbsp;D </font></p>
    </td>
    <td valign=bottom align="center" width=123>
      <p><font face="Times New Roman" size="2">2,200</font></p>
    </td>
    <td valign=bottom align="center" width=125>
      <p align=center><font face="Times New Roman" size="2">0</font></p>
    </td>
    <td valign=bottom align="center" width=146>
      <p><font face="Times New Roman" size="2">2,200</font></p>
    </td>
  </tr>
  <tr>
    <td colspan=2 valign=bottom>
      <p><font face="Times New Roman" size="2">            Series&nbsp;E </font></p>
    </td>
    <td valign=bottom align="center" width=123>
      <p><font face="Times New Roman" size="2">4,000</font></p>
    </td>
    <td valign=bottom align="center" width=125>
      <p align=center><font face="Times New Roman" size="2">0</font></p>
    </td>
    <td valign=bottom align="center" width=146>
      <p><font face="Times New Roman" size="2">4,000</font></p>
    </td>
  </tr>
  <tr>
    <td colspan=2 valign=bottom>
      <p><font face="Times New Roman" size="2">            Series&nbsp;F</font></p>
    </td>
    <td valign=bottom align="center" width=123>
      <p><font face="Times New Roman" size="2">2,400</font></p>
    </td>
    <td valign=bottom align="center" width=125>
      <p align=center><font face="Times New Roman" size="2">0</font></p>
    </td>
    <td valign=bottom align="center" width=146>
      <p><font face="Times New Roman" size="2">2,400</font></p>
    </td>
  </tr>
  <tr>
    <td colspan=2 valign=bottom>
      <p><font face="Times New Roman" size="2">            Series&nbsp;G </font></p>
    </td>
    <td valign=bottom align="center" width=123>
      <p><font face="Times New Roman" size="2">2,400</font></p>
    </td>
    <td valign=bottom align="center" width=125>
      <p align=center><font face="Times New Roman" size="2">0</font></p>
    </td>
    <td valign=bottom align="center" width=146>
      <p><font face="Times New Roman" size="2">2,400</font></p>
    </td>
  </tr>
</table>
<br>
<table width=600><TR>
    <TD width=27% valign=top><font size=2> <b>Tax Considerations</b></FONT></TD>
    <TD width=73% valign=top><font size=2>The Funds will receive an opinion of
      counsel with respect to the Reorganization to the effect that, among other
      things, neither Fund will recognize gain or loss on the transaction, and
      no stockholder of MuniInsured will recognize gain or loss upon the exchange
      of his or her shares for shares of MuniYield Insured Common Stock in the
      Reorganization (except to the extent that exchanging common stockholders
      receive cash representing an interest in fractional shares of MuniYield
      Insured Common Stock in the Reorganization). Consummation of the Reorganization
      is subject to the receipt of such opinion of counsel. The Reorganization
      will not affect the status of MuniYield Insured as a regulated investment
      company (a &#147;RIC&#148;) under the Internal Revenue Code of 1986, as
      amended (the &#147;Code&#148;). See &#147;Agreement and Plan of Reorganization
      &#151; Tax Consequences of the Reorganization.&#148; MuniInsured will liquidate
      and dissolve under the laws of the State of Maryland as part of the Reorganization</font></TD>
  </TR></TABLE>


<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 15</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<p><table width=600><tr><td  align=center><font size=2><B>RISK FACTORS AND SPECIAL
CONSIDERATIONS</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The investment
objective and policies of each Fund are substantially the same.  For this reason, the
investment risks associated with an investment in MuniYield  Insured are substantially
similar to the investment risks associated with an  investment in MuniInsured. Such risks
include, without limitation, the risks  associated with investing primarily in a
portfolio of Municipal Bonds. These  investment risks also will apply to an investment in
the Combined Fund after the  Reorganization. It is expected that the Reorganization
itself will not adversely  affect the rights of holders of shares of common stock of
either Fund.</font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The main difference in risk
      between the Funds is that MuniYield Insured uses leverage through the issuance
      of AMPS and is subject to the risks associated with leverage. MuniInsured
      does not issue AMPS and is not subject to leverage risk. See &#147;Risk
      Factors and Special Considerations &#151; Leverage.&#148;</font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2><B>Municipal Bonds</B></font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund intends to invest
      primarily in a portfolio of Municipal Bonds. As a result, each Fund is subject
      to the risks associated with investments in Municipal Bonds. See &#147;Comparison
      of the Funds &#151; Description of Municipal Bonds.&#148;</font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2><B>Interest Rate and Credit Risk</B></font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund invests primarily
      in long term Municipal Bonds that are subject to interest rate and credit
      risk. Interest rate risk is the risk that prices of Municipal Bonds generally
      increase when interest rates decline and generally decrease when interest
      rates increase. Prices of longer term securities generally change more in
      response to interest rate changes than prices of shorter term securities.
      Credit risk is the risk that the issuer will be unable to pay the interest
      or principal when due. The degree of credit risk depends on both the financial
      condition of the issuer and the terms of the obligation. Changes in the
      credit rating of an issuer or the market&#146;s perception of an issuer&#146;s
      creditworthiness can also affect the value of a Fund&#146;s investments
      in that issuer.</font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2><B>Trading Discount</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares of
closed-end funds, such as the Funds, frequently trade at a market  price that is lower
than their net asset value. This is commonly referred to as  &#147;trading at a discount.&#148; Shares
may also trade at a price that is higher than  their net asset value (a &#147;premium&#148;).
See &#147;Comparison of the Funds &#151; Financial  Highlights.&#148;</font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>Non-Diversification</B></font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund is classified as
      a &#147;non-diversified&#148; investment company. This means that each Fund
      may invest a greater percentage of its assets in a single issuer than a
      diversified investment company. Since either Fund may invest a relatively
      high percentage of its assets in a limited number of issuers, it may be
      more exposed to the effects of any single economic, political or regulatory
      occurrence than a fund that invests more widely. Even as a non-diversified
      fund, each Fund must still meet the diversification requirements of applicable
      Federal income tax law.</font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2><B>Rating Categories</B></font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Funds intend to invest
      in Municipal Bonds that are rated investment grade by Standard &amp; Poor&#146;s,
      Moody&#146;s Investors Service, Inc. or Fitch Ratings or are considered
      by FAM to be of comparable quality. Obligations rated in the lowest investment
      grade category may be considered to have certain speculative characteristics.
      See &#147;Comparison of the Funds &#151; Investment Objective and Policies.&#148;</font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2><B>Private Activity Bonds</B></font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund may invest all or
      a portion of its assets in certain tax-exempt securities classified as &#147;private
      activity bonds (&#147;PABs&#148;).&#148; These bonds may subject certain
      investors in either Fund to a Federal alternative minimum tax. See &#147;Comparison
      of the Funds &#151; Description of Municipal Bonds.&#148;</font></td>
  </tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 16</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<!-- MARKER PAGE="sheet: 17; page: 17" -->



<p><table width=600><tr><td><font size=2><B>Portfolio Insurance</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund
currently is subject to certain investment restrictions imposed by  guidelines of the
insurance companies that issue portfolio insurance. Following  the Reorganization, the
Combined Fund will continue to be subject to these  guidelines. The Funds do not expect
these guidelines to prevent FAM from  managing the Funds&#146; portfolios in accordance
with the Funds&#146; investment  objective and policies.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>Leverage</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Use of leverage,
through the issuance of AMPS, involves certain risks to holders  of common stock of
MuniYield Insured and to holders of common stock of the  Combined Fund after the
Reorganization. For example, MuniYield Insured&#146;s  issuance of AMPS may result in
higher volatility of the net asset value of its  common stock and potentially more
volatility in the market value of its common  stock. In addition, changes in the short
term and medium term dividend rates on,  and the amount of taxable income allocable to,
the AMPS will affect the yield to  holders of common stock. Under certain circumstances
when MuniYield Insured is  required to allocate taxable income to holders of AMPS, it may
be required to  make an additional distribution to such holders in an amount
approximately equal  to the tax liability resulting from that allocation (an &#147;Additional
Distribution&#148;). Leverage will allow holders of MuniYield Insured&#146;s common stock
to realize a higher current rate of return than if the Fund were not leveraged  as long
as the Fund, while accounting for its costs and operating expenses, is  able to realize a
higher net return on its investment portfolio than the  then-current dividend rate (and
any Additional Distribution) paid on the AMPS.  Similarly, since a pro rata portion of
MuniYield Insured&#146;s net realized capital  gains is generally payable to holders of
the Fund&#146;s common stock, the use of  leverage will increase the amount of such gains
distributed to holders of  MuniYield Insured&#146;s common stock. However, short term,
medium term and long term  interest rates change from time to time as do their
relationships to each other  (i.e., the slope of the yield curve) depending upon such
factors as supply and  demand forces, monetary and tax policies and investor
expectations. Changes in  any or all of such factors could cause the relationship between
short term,  medium term and long term rates to change (i.e., to flatten or to invert the
slope of the yield curve) so that short term and medium term rates may  substantially
increase relative to the long term obligations in which MuniYield  Insured may be
invested. To the extent that the current dividend rate (and any  Additional Distribution)
on the AMPS approaches the net return on MuniYield  Insured&#146;s investment portfolio,
the benefit of leverage to holders of common  stock will be decreased. If the current
dividend rate (and any Additional  Distribution) on the AMPS were to exceed the net
return on MuniYield Insured&#146;s  portfolio, holders of common stock would receive a
lower rate of return than if  the Fund were not leveraged. Similarly, since both the
costs of issuing AMPS and  any decline in the value of MuniYield Insured&#146;s
investments (including  investments purchased with the proceeds from any AMPS offering)
will be borne  entirely by holders of MuniYield Insured&#146;s common stock, the effect
of leverage  in a declining market would result in a greater decrease in net asset value
to  holders of common stock than if the Fund were not leveraged. If MuniYield  Insured is
liquidated, holders of MuniYield Insured&#146;s AMPS will be entitled to  receive
liquidating distributions before any distribution is made to holders of  common stock of
the Fund.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In an extreme
case, a decline in net asset value could affect MuniYield  Insured&#146;s ability to pay
dividends on its common stock. Failure to make such  dividend payments could adversely
affect MuniYield Insured&#146;s qualification as a  RIC under the Federal tax laws. See
&#147;Comparison of the Funds &#151; Tax Rules  Applicable to the Funds and their
Stockholders.&#148; However, MuniYield Insured  intends to take all measures necessary to
make common stock dividend payments.  If MuniYield Insured&#146;s current investment
income is ever insufficient to meet  dividend payments on either its common stock or its
AMPS, it may have to  liquidate certain of its investments. In addition, MuniYield
Insured has the  authority to redeem its AMPS for any reason and may redeem all or part
of its  AMPS under the following circumstances:</font></td></tr></table>

<br>
<table width=600>
  <tr>
    <td width=3%></td>
    <td width=1% valign=top><font size=3>&#149;</font></td>
    <td width=3%></td>
    <td width=93%><font size=2>if
MuniYield Insured anticipates that its leveraged capital structure  will result in a
lower rate of return for any significant amount  of time to holders of the common stock
than the Fund can obtain if  the common stock were not leveraged,</font></td></tr></table>

<br>
<table width=600>
  <tr>
    <td width=3%></td>
    <td width=1% valign=top><font size=3>&#149;</font></td>
    <td width=3%></td>
    <td width=93%><font size=2>if
the asset coverage for the AMPS declines below 200%, either as  a result of a decline in
the value of MuniYield Insured&#146;s  portfolio investments or as a result of the
repurchase of common  stock in tender offers, or otherwise, or</font></td></tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 17</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT>
<p>&nbsp; <!-- *************************************************************************** -->
  <!-- MARKER PAGE="sheet: 18; page: 18" -->
<p>&nbsp;
<table width=600>
  <tr>
    <td width=3%></td>
    <td width=1% valign=top><font size=3>&#149;</font></td>
    <td width=3%></td>
    <td width=93%><font size=2>in
order to maintain the asset coverage established by Moody&#146;s and S&amp;P in rating
the AMPS.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Redemption of the
AMPS or insufficient investment income to make dividend  payments may reduce the net
asset value of MuniYield Insured&#146;s common stock and  require the Fund to liquidate a
portion of its investments at a time when it may  be disadvantageous to do so. MuniYield
Insured may issue AMPS representing up to  approximately 35% of its total assets.
Following the Reorganization, it is  anticipated that the Combined Fund will be permitted
to issue AMPS representing  up to approximately 35% of its total assets.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As discussed under
&#147;Management of the Funds&#151; Management and Advisory  Arrangements,&#148; during
periods when MuniYield Insured (or, after the  Reorganization, the Combined Fund) has
preferred stock outstanding, the fees  paid to FAM for the investment advisory and
management services will be higher  than if the Fund did not issue preferred stock
because the fees paid will be  calculated on the basis of the Fund&#146;s average daily
net assets, including any  proceeds from the issuance of preferred stock, plus the
proceeds of any  outstanding borrowings used for leverage.</font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MuniYield Insured currently
      has outstanding seven series of AMPS (each series paying dividends at a
      rate that is adjusted every 7 or 28 days). Assuming that the AMPS represents
      approximately 35% of the Fund&#146;s capital after the Reorganization at
      an annual weighted average dividend rate of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
      payable on such AMPS based on market rates as of _____________, 2004, the
      annual return that the Fund&#146;s portfolio must experience (net of expenses)
      in order to cover such dividend payments would be &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%.</font></td>
  </tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table is designed
      to illustrate the effect of leverage on the return to a holder of common
      stock when AMPS represent approximately 35% of the Fund&#146;s capital,
      assuming hypothetical annual returns on the Fund&#146;s portfolio of minus
      10% to plus 10%. As the table shows, leverage generally increases the return
      to stockholders when portfolio return is positive and generally decreases
      the return when portfolio return is negative. The figures appearing in the
      table are hypothetical and actual returns may be greater or less than those
      appearing in the table.</font></td>
  </tr></table>

<br>
<table border=0 cellspacing=0 cellpadding=0 width="600">
  <tr valign="bottom">
    <td>
      <p><font face="Times New Roman" size="2">Assumed Portfolio Return<br>
        &nbsp;&nbsp;&nbsp;&nbsp; (net of expenses)</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font face="Times New Roman" size="2">(10</font></p>
    </td>
    <td align="left">
      <p><font face="Times New Roman" size="2">)%</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font face="Times New Roman" size="2">(5</font></p>
    </td>
    <td align="left">
      <p><font face="Times New Roman" size="2">)%</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font face="Times New Roman" size="2">0</font></p>
    </td>
    <td align="left">
      <p><font face="Times New Roman" size="2">%</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font face="Times New Roman" size="2">5</font></p>
    </td>
    <td align="left">
      <p><font face="Times New Roman" size="2">%</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font face="Times New Roman" size="2">10</font></p>
    </td>
    <td align="left">
      <p><font face="Times New Roman" size="2">%</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font face="Times New Roman" size="2">Corresponding Common Stock Return</font></p>
    </td>
    <td>
      <p><font face="Times New Roman" size="2">&nbsp;</font></p>
    </td>
    <td align="right">
      <p><font face="Times New Roman" size="2"> ( &nbsp;&nbsp; </font></p>
    </td>
    <td align="left">
      <p><font face="Times New Roman" size="2">)%</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font face="Times New Roman" size="2">&nbsp;(&nbsp; </font></p>
    </td>
    <td align="left">
      <p><font face="Times New Roman" size="2">&nbsp;)%</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font face="Times New Roman" size="2">&nbsp;</font></p>
    </td>
    <td align="left">
      <p><font face="Times New Roman" size="2">%</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font face="Times New Roman" size="2">&nbsp;</font></p>
    </td>
    <td align="left">
      <p><font face="Times New Roman" size="2">%</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font face="Times New Roman" size="2">&nbsp;</font></p>
    </td>
    <td align="left">
      <p><font face="Times New Roman" size="2">%</font></p>
    </td>
  </tr>
</table>
<br>
<table width=600><tr><td><font size=2><B>Portfolio Management</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The portfolio
management strategies of the Funds are substantially similar. In  addition, with respect
to MuniYield Insured, in the event of an increase in  short term or medium term rates or
other change in market conditions to the  point where MuniYield Insured&#146;s leverage
could adversely affect holders of  common stock as noted above, or in anticipation of
such changes, MuniYield  Insured may attempt to shorten the average maturity of its
investment portfolio,  which would tend to offset the negative impact of leverage on
holders of its  common stock. MuniYield Insured also may attempt to reduce the degree to
which  it is leveraged by redeeming AMPS pursuant to the provisions of the Fund&#146;s
Articles Supplementary establishing the rights and preferences of the AMPS or  otherwise
purchasing shares of AMPS. Purchases and sales or redemptions of AMPS,  whether on the
open market or in negotiated transactions, are subject to  limitations under the
Investment Company Act. If market conditions subsequently  change, MuniYield Insured may
sell previously unissued shares of AMPS or shares  of AMPS that the Fund previously
issued but later repurchased or redeemed.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>Inverse Floating Obligations</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund&#146;s
investments in &#147;inverse floating obligations&#148; or &#147;residual interest  bonds&#148; provide
investment leverage because their market value increases or  decreases in response to
market changes at a greater rate than fixed rate, long  term tax-exempt securities. The
market values of such securities are more  volatile than the market values of fixed rate,
tax-exempt securities.</font></td></tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 18</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 19; page: 19" -->



<p><table width=600><tr><td><font size=2><B>Options and Futures Transactions</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund may
engage in certain options and futures transactions to reduce its  exposure to interest
rate movements. If a Fund incorrectly forecasts market  values, interest rates or other
factors, that Fund&#146;s performance could suffer.  Each Fund also may suffer a loss if
the other party to the transaction fails to  meet its obligations. The Funds are not
required to use hedging and may choose  not to do so. The Funds cannot guarantee that any
hedging strategies they use  will work.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>Antitakeover Provisions</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Articles of
Incorporation of each Fund (in each case, the &#147;Charter &#147;) and  Maryland law
include provisions that could limit the ability of other entities  or persons to acquire
control of that Fund or to change the composition of its  Board of Directors. Such
provisions could limit the ability of stockholders to  sell their shares at a premium
over prevailing market prices by discouraging a  third party from seeking to obtain
control of the Fund.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>Ratings Considerations for AMPS</B></font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MuniYield Insured has received
      ratings on its AMPS of AAA from S&amp;P and Aaa from Moody&#146;s. In order
      to maintain these ratings, MuniYield Insured is required to maintain portfolio
      holdings meeting specified guidelines of such rating agencies. These guidelines
      may provide a set of tests for portfolio composition and asset coverage
      that supplement (and in some cases are more restrictive than) the applicable
      requirements under the Investment Company Act and may prohibit or limit
      the use by MuniYield Insured of certain portfolio management techniques
      or investments. MuniYield Insured does not anticipate that these guidelines
      will impede FAM from managing MuniYield Insured&#146;s portfolio in accordance
      with its investment objective and policies. Ratings on the AMPS Fund should
      not be confused with ratings on the portfolio securities held by MuniYield
      Insured.</font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As described by
Moody&#146;s and S&amp;P, a preferred stock rating is an assessment of  the capacity and
willingness of an issuer to pay preferred stock obligations.  The ratings of the AMPS are
not recommendations to purchase, hold or sell shares  of AMPS, inasmuch as the ratings do
not comment as to market price or  suitability for a particular investor, nor do the
rating agency guidelines  address the likelihood that a holder of shares of AMPS will be
able to sell such  shares in an auction. The ratings are based on current information
furnished to  Moody&#146;s and S&amp;P by MuniYield Insured and FAM and information
obtained from other  sources. The ratings may be changed, suspended or withdrawn as a
result of  changes in, or the unavailability of, such information. The common stock of
MuniYield Insured has not been rated by a nationally recognized statistical  rating
organization (&#147;NRSRO&#148;).</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of
Directors of MuniYield Insured, without stockholder approval, may  amend, alter or repeal
certain definitions or restrictions which have been  adopted by the Fund pursuant to the
rating agency guidelines, in the event the  Fund receives confirmation from the rating
agencies that any such amendment,  alteration or repeal would not impair the ratings then
assigned to shares of  AMPS.</font></td></tr></table>


<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 19</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 20; page: 20" -->




<p><table width=600><tr><td  align=center><font size=2><B>COMPARISON OF THE FUNDS</B></font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2><B>Financial Highlights<br>
      <br>
      <i> MuniYield Insured</i></B></font></td>
  </tr></table>

<p><table width=600><tr>
    <td><font size=2><B>TO BE SUPPLIED BY SUBSEQUENT AMENDMENT</B></font></td>
  </tr></table>


<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 20</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 21; page: 21" -->






<p><table width=600><tr>
    <td><font size=2><B><i>MuniInsured Fund</i><br>
      <br>
      TO BE SUPPLIED BY SUBSEQUENT AMENDMENT </B></font></td>
  </tr></table>



<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 21</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 22; page: 22" -->




<p><table width=600><tr><td  align=center><font size=2><B>Per share data for Common
Stock* (unaudited)</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>MuniInsured<BR>Traded on the American Stock
Exchange</B></font></td></tr></table>


<br>
<table border=0 cellspacing=0 cellpadding=0 width="600">
  <tr valign="bottom" align="center">
    <td> <b><font size="1">&nbsp;</font></b></td>
    <td> <b><font size="1">&nbsp;</font></b></td>
    <td colspan=4> <b><font size="1">&nbsp;Market Price**</font></b>
      <hr size="1" noshade width="80%">
    </td>
    <td colspan=4> <b><font size="1">&nbsp;</font><font size="1" color="black">Net
      Asset Value</font></b>
      <hr size="1" noshade width="80%">
    </td>
    <td colspan=4> <b><font size="1">Premium (Discount)</font><font size="1" color="black"><br>
      To Net Asset Value </font></b>
      <hr size="1" noshade width="80%">
    </td>
  </tr>
  <tr valign="bottom" align="center">
    <td align="left"> <b><font size="1">Quarter Ended*</font></b>
      <hr size="1" noshade width="35%" align="left">
    </td>
    <td> <b><font size="1">&nbsp;</font></b></td>
    <td> <b><font size="1">High</font></b>
      <hr size="1" width="60%" noshade>
    </td>
    <td>&nbsp;</td>
    <td> <b><font size="1">Low</font></b>
      <hr size="1" width="60%" noshade>
    </td>
    <td>&nbsp;</td>
    <td> <b><font size="1">High</font></b>
      <hr size="1" width="60%" noshade>
    </td>
    <td>&nbsp;</td>
    <td> <b><font size="1">Low</font></b>
      <hr size="1" width="60%" noshade>
    </td>
    <td>&nbsp;</td>
    <td> <b><font size="1">High</font></b>
      <hr size="1" width="60%" noshade>
    </td>
    <td>&nbsp;</td>
    <td> <b><font size="1">Low</font></b>
      <hr size="1" width="60%" noshade>
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">September 30, 2001</font></td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">December 31, 2001</font></td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">March 31, 2002</font></td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">June 30, 2002</font></td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">September 30, 2002</font></td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">December 31, 2002</font></td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">March 31, 2003</font></td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">June 30, 2003</font></td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">September 30, 2003</font></td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">December 31, 2003</font></td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">March 31, 2004</font></td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
  </tr>
</table>
<br>
<table width=600><tr><td><font size=2><B>MuniYield Insured<BR>Traded on the New York
Stock Exchange</B></font></td></tr></table>


<br>
<table border=0 cellspacing=0 cellpadding=0 width="600">
  <tr valign="bottom" align="center">
    <td> <b><font size="1">&nbsp;</font></b></td>
    <td> <b><font size="1">&nbsp;</font></b></td>
    <td colspan=4> <b><font size="1">&nbsp;Market Price**</font></b>
      <hr size="1" noshade width="80%">
    </td>
    <td colspan=4> <b><font size="1">&nbsp;</font><font size="1" color="black">Net
      Asset Value</font></b>
      <hr size="1" noshade width="80%">
    </td>
    <td colspan=4> <b><font size="1">Premium (Discount)</font><font size="1" color="black"><br>
      To Net Asset Value </font></b>
      <hr size="1" noshade width="80%">
    </td>
  </tr>
  <tr valign="bottom" align="center">
    <td align="left"> <b><font size="1">Quarter Ended*</font></b>
      <hr size="1" noshade width="35%" align="left">
    </td>
    <td> <b><font size="1">&nbsp;</font></b></td>
    <td> <b><font size="1">High</font></b>
      <hr size="1" width="60%" noshade>
    </td>
    <td>&nbsp;</td>
    <td> <b><font size="1">Low</font></b>
      <hr size="1" width="60%" noshade>
    </td>
    <td>&nbsp;</td>
    <td> <b><font size="1">High</font></b>
      <hr size="1" width="60%" noshade>
    </td>
    <td>&nbsp;</td>
    <td> <b><font size="1">Low</font></b>
      <hr size="1" width="60%" noshade>
    </td>
    <td>&nbsp;</td>
    <td> <b><font size="1">High</font></b>
      <hr size="1" width="60%" noshade>
    </td>
    <td>&nbsp;</td>
    <td> <b><font size="1">Low</font></b>
      <hr size="1" width="60%" noshade>
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">July 31, 2001</font></td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">October 31, 2001</font></td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td><font size="2">January 31, 2002</font> </td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td><font size="2">April 30, 2002</font> </td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td><font size="2">July 31, 2002</font> </td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td><font size="2">October 31, 2002</font> </td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td><font size="2">January 31, 2003</font> </td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td><font size="2">April 30, 2003</font> </td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td><font size="2">July 31, 2003</font> </td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td><font size="2">October 31, 2003</font> </td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td><font size="2">January 31, 2004</font> </td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
    <td> <font size="2"><b>&nbsp;</b></font></td>
    <td>&nbsp;</td>
  </tr>
</table>
<table width=600><tr><td><hr size=1 noshade align=left  width=75></td></tr></table>

<table width=600><tr>
    <td width=4% align=right valign=top><font size="1">* </font></td>
    <td width=2%><font size="1"></font></td>
    <td width=94%><font size="1">Calculations are based upon shares of common
      stock outstanding at the end of each quarter. </font></td>
  </tr></table>


<table width=600><tr>
    <td width=4% align=right valign=top><font size="1">** </font></td>
    <td width=2%><font size="1"></font></td>
    <td width=94%><font size="1">As reported in the consolidated transaction reporting
      system.</font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the periods
shown, share prices for MuniYield Insured&#146;s Common Stock have  traded between a
maximum premium of approximately % and a maximum discount of  approximately ( %). For the
periods shown, MuniInsured&#146;s share prices for its  common stock have traded between
a maximum premium of approximately % and a  maximum discount of approximately ( %).
Although there is no reason to believe  that this pattern should be affected by the
Reorganization, it is not possible  to predict whether shares of the Combined Fund will
trade at a premium or  discount to net asset value following the Reorganization, or what
the extent of  any such premium or discount might be.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>Investment Objective and Policies</B></font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The structure, organization
      and investment policies of the Funds are substantially similar. Each Fund
      seeks to provide stockhoders with as high a level of current income exempt
      from Federal income taxes as is consistent with its investment policies
      and prudent investment management. The investment objective of each Fund
      is a fundamental policy that may not be changed without a vote of a majority
      of the Fund&#146;s outstanding voting securities.</font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund seeks to
achieve its investment objective by investing primarily in a  portfolio of Municipal
Bonds. Under normal circumstances, each Fund invests at  least 80% of its assets in
Municipal Bonds and at least 80% of its assets in  Municipal Bonds that are covered by
insurance guaranteeing the timely payment of  principal at maturity and interest when
due. At times, each Fund may seek to  hedge its portfolio through the use of futures and
options transactions to  reduce volatility in the net asset value of its shares of common
stock.</font></td></tr></table>


<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 22</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ordinarily,
neither Fund intends to realize significant investment income  subject to Federal income
tax. Each Fund may, however, invest all or a portion  of its assets in certain tax-exempt
securities classified as &#147;private activity  bonds&#148; (in general, bonds that
benefit non-governmental entities) that may  subject certain investors in the Fund to a
Federal alternative minimum tax.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund also may
invest in securities not issued by or on behalf of a state or  territory or by an agency
or instrumentality thereof, if the Fund nevertheless  believes such securities pay
interest or distributions that are exempt from  Federal income taxation (&#147;Non-Municipal
Tax-Exempt Securities&#148;). Non-Municipal  Tax-Exempt Securities may include securities
issued by other investment  companies that invest in Municipal Bonds, to the extent such
investments are  permitted by the Investment Company Act. Other Non-Municipal Tax-Exempt
Securities could include trust certificates or other instruments evidencing  interests in
one or more long term Municipal Bonds. Certain Non-Municipal  Tax-Exempt Securities may
be characterized as derivative instruments. For  purposes of a Fund&#146;s investment
objective and policies, Non-Municipal Tax-Exempt  Securities that pay interest that is
exempt from Federal income taxes will be  considered &#147;Municipal Bonds.&#148;</font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund will invest in investment
      grade Municipal Bonds that are rated at the date of purchase in the four
      highest rating categories of S&amp;P, Moody&#146;s or Fitch or, if unrated,
      are considered to be of comparable quality by FAM. In the case of long term
      debt, the investment grade rating categories are AAA through BBB for S&amp;P
      and Fitch and Aaa through Baa for Moody&#146;s. In the case of short term
      notes, the investment grade rating categories are SP-1+ through SP-2 for
      S&amp;P, MIG-1 through MIG-3 for Moody&#146;s and F-1+ through F-3 for Fitch.
      In the case of tax-exempt commercial paper, the investment grade rating
      categories are A-1+ through A-3 for S&amp;P, Prime-1 through Prime-3 for
      Moody&#146;s and F-1+ through F-3 for Fitch. Obligations ranked in the lowest
      investment grade rating category (BBB, SP-2 and A-3 for S&amp;P; Baa, MIG-3
      and Prime-3 for Moody&#146;s; and BBB and F-3 for Fitch), while considered
      &#147;investment grade,&#148; may have certain speculative characteristics.
      There may be sub-categories or gradations indicating relative standing within
      the rating categories set forth above. In assessing the quality of Municipal
      Bonds with respect to the foregoing requirements, FAM takes into account
      the portfolio insurance as well as the nature of any letters of credit or
      similar credit enhancement to which particular Municipal Bonds are entitled
      and the creditworthiness of the insurance company or financial institution
      that provided such insurance or credit enhancements. Consequently, if Municipal
      Bonds are covered by insurance policies issued by insurers whose claims-paying
      ability is rated AAA by S&amp;P or Fitch or Aaa by Moody&#146;s, FAM may
      consider such municipal obligations to be equivalent to AAA- or Aaa- rated
      securities, as the case may be, even though such Municipal Bonds would generally
      be assigned a lower rating if the rating were based primarily upon the credit
      characteristics of the issuers without regard to the insurance feature.
      The insured Municipal Bonds must also comply with the standards applied
      by the insurance carriers in determining eligibility for portfolio insurance.
      See Exhibit III &#151; &#147;Ratings of Municipal Bonds and Commercial Paper&#148;
      and Exhibit IV &#151; &#147;Portfolio Insurance.&#148;</font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund may
invest in variable rate demand obligations (&#147;VRDOs&#148;) and VRDOs in  the form of
participation interests (&#147;Participating VRDOs&#148;) in variable rate  tax-exempt
obligations held by a financial institution, typically a commercial  bank. The VRDOs in
which each Fund may invest are tax-exempt obligations, in the  opinion of counsel to the
issuer, that contain a floating or variable interest  rate adjustment formula and an
unconditional right of demand on the part of the  holder thereof to receive payment of
the unpaid principal balance plus accrued  interest on a short notice period not to
exceed seven days. Participating VRDOs  provide each Fund with a specified undivided
interest (up to 100%) in the  underlying obligation and the right to demand payment of
the unpaid principal  balance plus accrued interest on the Participating VRDOs from the
financial  institution on a specified number of days&#146; notice, not to exceed seven
days.  There is, however, the possibility that because of default or insolvency, the
demand feature of VRDOs or Participating VRDOs may not be honored. Each Fund has  been
advised by its counsel that the Fund should be entitled to treat the income  received on
Participating VRDOs as interest from tax-exempt obligations for  Federal income tax
purposes.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The net asset
value of the shares of common stock of a closed-end investment  company such as MuniYield
Insured or MuniInsured, which invests primarily in  fixed income securities, changes as
the general levels of interest rates  fluctuate. When interest rates decline, the value
of a fixed income portfolio  can be expected to rise. Conversely, when interest rates
rise, the value of a  fixed income portfolio can be expected to decline. Prices of longer
term  securities generally fluctuate more in response to interest rate changes than do
short term or medium term securities. These changes in net asset value are  likely to be
greater in the case of a fund having a leveraged capital structure,  such as that used by
MuniYield Insured. See &#147;Risk Factors and Special  Considerations &#151; Leverage.&#148;</font></td></tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 23</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<!-- MARKER PAGE="sheet: 24; page: 24" -->



<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The average
maturity of each Fund&#146;s portfolio securities varies from time to  time based upon FAM&#146;s
assessment of economic and market conditions. Each Fund  intends to invest primarily in
long term Municipal Bonds with a maturity of more  than ten years. However, each Fund may
also invest in intermediate term  Municipal Bonds with a maturity of between three years
and ten years. Each Fund  may also invest in short term tax-exempt securities, short term
U.S. Government  securities, repurchase agreements or cash. Investments in such short
term  securities or cash will not exceed 20% of a Fund&#146;s total assets except during
interim periods pending investment of the net proceeds from public offerings of  that Fund&#146;s
securities or in anticipation of the repurchase or redemption of  that Fund&#146;s
securities and temporary periods when, in the opinion of FAM,  prevailing market or
economic conditions warrant. The Funds do not ordinarily  intend to realize significant
interest income that is subject to Federal income  taxes.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund is
classified as non-diversified within the meaning of the Investment  Company Act, which
means that the Fund is not limited by the Investment Company  Act in the proportion of
its total assets that it may invest in securities of a  single issuer. However, each Fund&#146;s
investments are limited so as to qualify the  Fund for the special tax treatment afforded
RICs under the Federal tax laws. To  qualify, among other requirements, each Fund limits
its investments so that, at  the close of each quarter of the taxable year, (i) not more
than 25% of the  market value of the Fund&#146;s total assets will be invested in the
securities  (other than U.S. Government securities) of a single issuer, and (ii) with
respect to 50% of the market value of its total assets, not more than 5% of the  market
value of its total assets will be invested in the securities (other than  U.S. Government
securities) of a single issuer and it will not own more than 10%  of the outstanding
voting securities of a single issuer. A fund that elects to  be classified as &#147;diversified&#148; under
the Investment Company Act must satisfy,  among other requirements, the foregoing 5% and
10% requirements with respect to  75% of its total assets. To the extent that either Fund
assumes large positions  in the securities of a small number of issuers, its yield may
fluctuate to a  greater extent than that of a diversified company as a result of changes
in the  financial condition or in the market&#146;s assessment of the issuers.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>Portfolio Insurance</B></font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under normal circumstances,
      each Fund will invest at least 80% its assets in Municipal Bonds either
      (i) insured under an insurance policy obtained by the issuer thereof or
      any other party, or (ii) insured under an insurance policy purchased by
      the Fund. Each Fund will seek to limit its investments to Municipal Bonds
      insured under insurance policies issued by insurance carriers that have
      total admitted assets (unaudited) of at least $75,000,000 and capital and
      surplus (unaudited) of at least $50,000,000 and insurance claims-paying
      ability ratings of AAA from S&amp;P or Fitch, or Aaa from Moody&#146;s.
      There can be no assurance that insurance from insurance carriers meeting
      these criteria will be available. See Exhibit IV to this Proxy Statement
      and Prospectus for a brief description of insurance claims-paying ability
      ratings of S&amp;P, Moody&#146;s and Fitch. Currently, it is anticipated
      that a majority of the insured Municipal Bonds in each Fund&#146;s portfolio
      will be insured by the following insurance companies which satisfy the foregoing
      criteria: Ambac Assurance Corporation, Financial Guaranty Insurance Company,
      Financial Security Assurance and MBIA Insurance Corporation. Each Fund also
      may purchase Municipal Bonds covered by insurance issued by any other insurance
      company that satisfies the foregoing criteria. A majority of insured Municipal
      Bonds held by each Fund will be insured under policies obtained by parties
      other than the Fund.</font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund may
purchase, but has no obligation to purchase, separate insurance  policies (the &#147;Policies&#148;)
from insurance companies meeting the criteria set  forth above that guarantee payment of
principal and interest when due on  specified eligible Municipal Bonds that it purchases.
A Municipal Bond will be  eligible for coverage if it meets certain requirements of the
insurance company  set forth in a Policy. In the event interest or principal of an
insured  Municipal Bond is not paid when due, the insurer will be obligated under its
Policy to make such payment not later than 30 days after it has been notified  by, and
provided with documentation from, the Fund that such nonpayment has  occurred.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Policies will
be effective only as to insured Municipal Bonds beneficially  owned by a Fund. In the
event of a sale of any Municipal Bonds held by a Fund,  the issuer of the relevant Policy
will be liable only for those payments of  interest and principal that are then due and
owing. The Policies will not  guarantee the market value of an insured Municipal Bond or
the value of the  shares of a Fund.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The insurer will
not have the right to withdraw coverage on securities insured  by its Policies and held
by a Fund so long as such securities remain in the  Fund&#146;s portfolio. In addition,
the insurer may not cancel its Policies for any </font></td></tr></table>


<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 24</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<!-- MARKER PAGE="sheet: 25; page: 25" -->



<P><table width=600><tr><td><font size=2>reason except failure to pay premiums  when due.
The Board of Directors of each  Fund reserves the right to terminate any of the  Policies
if it determines that  the benefits to the Fund of having its portfolio insured  under
such Policy are  not justified by the expense involved.</font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The premiums for the Policies
      are paid by each Fund and the yield on its portfolio is reduced thereby.
      FAM estimates that the cost of the annual premiums for the Policies of each
      Fund currently range from approximately .05 of [1% to .40 of 1%] of the
      principal amount of the Municipal Bonds covered by such Policies. The estimate
      is based on the expected composition of each Fund&#146;s portfolio of Municipal
      Bonds. Additional information regarding the Policies is set forth in Exhibit
      IV to this Proxy Statement and Prospectus. In instances in which a Fund
      purchases Municipal Bonds insured under policies obtained by parties other
      than the Fund, each Fund does not pay the premiums for such policies; rather,
      the cost of such policies may be reflected in the purchase price of the
      Municipal Bonds.</font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;It is the
intention of FAM to retain any insured securities that are in default  or in significant
risk of default and to place a value on the insurance, which  ordinarily will be the
difference between the market value of the defaulted  security and the market value of
similar securities that are not in default. In  certain circumstances, however, FAM may
determine that an alternate value for  the insurance, such as the difference between the
market value of the defaulted  security and its par value, is more appropriate. FAM&#146;s
ability to manage the  portfolio of either Fund may be limited to the extent it holds
defaulted  securities for which market quotations are not generally available, which may
limit its ability in certain circumstances to purchase other Municipal Bonds.  See &#147;Net
Asset Value&#148; below for a more complete description of each Fund&#146;s  method of
valuing securities for which market quotations are not generally  available.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No assurance can
be given that insurance with the terms and issued by insurance  carriers meeting the
criteria described above will continue to be available to  each Fund. In the event the
Board of Directors of a Fund determines that such  insurance is unavailable or that the
cost of such insurance outweighs the  benefits to the Fund, the Fund may modify the
criteria for insurance carriers or  the terms of the insurance, or may discontinue its
policy of maintaining  insurance for all or any of the Municipal Bonds held in the Fund&#146;s
portfolio.  Although FAM periodically reviews the financial condition of each insurer,
there  can be no assurance that the insurers will be able to honor their obligations
under all circumstances.</font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Portfolio insurance reduces
      financial or credit risk (<i>i.e.</i>, the possibility that the owners of
      the insured Municipal Bonds will not receive timely scheduled payments of
      principal or interest). However, the insured Municipal Bonds are subject
      to market risk (<i>i.e.</i>, fluctuations in market value as a result of
      changes in prevailing interest rates and other market conditions).</font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2><B>Description of Municipal Bonds</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Municipal Bonds
include debt obligations issued to obtain funds for various  public purposes, including
construction of a wide range of public facilities,  refunding of outstanding obligations
and obtaining funds for general operating  expenses and loans to other public
institutions and facilities. In addition,  certain types of private activity bonds (&#147;PABs&#148;)
are issued by or on behalf of  public authorities to finance various privately operated
facilities, including,  among other things, airports, public ports, mass commuting
facilities,  multi-family housing projects, as well as facilities for water supply, gas,
electricity, sewage or solid waste disposal. For purposes of this Joint Proxy  Statement
and Prospectus, such obligations are Municipal Bonds if the interest  paid thereon is
exempt from Federal income tax, even though such bonds may be  industrial development
bonds or PABs as discussed below. Also, for purposes of  this Joint Proxy Statement and
Prospectus, Non-Municipal Tax-Exempt Securities  as discussed above will be considered
Municipal Bonds.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The two principal
classifications of Municipal Bonds are &#147;general obligation&#148; bonds and &#147;revenue&#148; bonds,
which latter category includes PABs and, for bonds  issued on or before August 15, 1986,
industrial development bonds or &#147;IDBs.&#148; General obligation bonds are typically
secured by the issuer&#146;s pledge of faith,  credit and taxing power for the repayment
of principal and the payment of  interest. Revenue or special obligation bonds are
typically payable only from  the revenues derived from a particular facility or class of
facilities or, in  some cases, from the proceeds of a special excise tax or other
specific revenue  source such as from the user of the facility being financed. PABs are
in most  cases revenue bonds and do not generally constitute the pledge of the credit or
taxing power of the issuer of </font></td></tr></table>


<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 25</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<P><table width=600><tr><td><font size=2>such bonds. The repayment of principal and the
payment of interest on such IDBs depends solely on the ability of the user of  the
facility financed by the bonds to meet its financial obligations and the  pledge, if any,
of real and personal property so financed as security for such  payment. Municipal Bonds
may also include &#147;moral obligation&#148; bonds, which are  normally issued by
special purpose public authorities. If an issuer of moral  obligation bonds is unable to
meet its obligations, the repayment of such bonds  becomes a moral commitment but not a
legal obligation of the state or  municipality in question.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund may
purchase Municipal Bonds classified as PABs. Interest received on  certain PABs is
treated as an item of &#147;tax preference&#148; for purposes of the  Federal alternative
minimum tax and may impact the overall tax liability of  certain investors in the Fund.
There is no limitation on the percentage of each  Fund&#146;s assets that may be invested
in Municipal Bonds the interest on which is  treated as an item of &#147;tax preference&#148; for
purposes of the Federal alternative  minimum tax. See &#147;Comparison of the Funds &#151; Tax
Rules Applicable to the Funds  and Their Stockholders.&#148;</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Also included
within the general category of Municipal Bonds are certificates of  participation (&#147;COPs&#148;)
executed and delivered for the benefit of government  authorities or entities to finance
the acquisition or construction of equipment,  land and/or facilities. COPs represent
participations in a lease, an installment  purchase contract or a conditional sales
contract (hereinafter collectively  referred to as &#147;lease obligations&#148;)
relating to such equipment, land or  facilities. Although lease obligations typically do
not constitute general  obligations of the issuer for which the issuer&#146;s unlimited
taxing power is  pledged, a lease obligation frequently is backed by the issuer&#146;s
covenant to  budget for, appropriate and make the payments due under the lease
obligation.  However, certain lease obligations contain &#147;non-appropriation&#148; clauses,
which  provide that the issuer has no obligation to make lease or installment purchase
payments in future years unless money is appropriated for such purpose on a  yearly
basis. Although &#147;non-appropriation&#148; lease obligations are secured by the  lease
property, disposition of the property in the event of foreclosure might  prove difficult.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Federal tax
legislation has limited and may continue to limit the types and  volume of such bonds the
interest on which is excludable from income for Federal  income tax purposes. Such
legislation may affect the availability of Municipal  Bonds for investment by each Fund.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>Other Investment Policies</B></font></td></tr></table>


<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund has
adopted certain other policies as set forth below:</font></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Borrowings</I>. Each
Fund is authorized to borrow amounts of up to 5% of the value of its total assets at the
time of such borrowings; provided, however, that each Fund is authorized to borrow
moneys in excess of 5% of the value of its total assets at the time of such borrowings
to finance the repurchase of its own common stock pursuant to tender offers or otherwise
to redeem or repurchase shares of preferred stock or for temporary, extraordinary or
emergency purposes. Borrowings by each Fund (commonly known, as with the issuance by
MuniYield Insured of the AMPS, as &#147;leveraging&#148;) create an opportunity for
greater total return since the Fund will not be required to sell portfolio securities to
repurchase or redeem shares but, at the same time, increase exposure to capital risk. In
addition, borrowed funds are subject to interest costs that may offset or exceed the
return earned on the borrowed funds.</FONT></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>When-Issued
Securities and Delayed Delivery Transactions.</I> Each Fund may purchase or sell Municipal
Bonds on a delayed delivery basis or on a when-issued basis at fixed purchase or sale
terms. These transactions arise when securities are purchased or sold by a Fund with
payment and delivery taking place in the future. The purchase will be recorded on the
date that the Fund enters into the commitment, and the value of the obligation
thereafter will be reflected in the calculation of the Fund&#146;s net asset value. The
value of the obligation on the delivery day may be more or less than its purchase price.
A separate account of the Fund will be established with its custodian consisting of
cash, cash equivalents or liquid securities having a market value at all times at least
equal to the amount of the commitment.</FONT></td></tr></table>

<p><table width=600><tr>
    <td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Indexed and Inverse Floating
      Obligations</I>. Each Fund may invest in Municipal Bonds that yield a return
      based on a particular index of value or interest rates. For example, each
      Fund may invest in Municipal Bonds that pay interest based on an index of
      Municipal Bond interest rates. The principal amount payable upon maturity
      of certain Municipal Bonds also may be based on the value of an index. To
      the extent a Fund invests in these types of</FONT> <font size=2>Municipal
      Bonds, the Fund&#146;s return on such Municipal Bonds will be subject to
      risk with respect to the value of the particular index. </font></td>
  </tr></table>


<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 26</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<P><table width=600><tr>
    <td><font size=2>Also, a Fund may invest in so-called &#147;inverse floating
      obligations&#148; or &#147;residual interest bonds&#148; on which the interest
      rates typically vary inversely with a short term floating rate (which may
      be reset periodically by a Dutch auction, a remarketing agent, or by reference
      to a short term tax-exempt interest rate index). Each Fund may purchase
      synthetically-created inverse floating obligations evidenced by custodial
      or trust receipts. Generally, income on inverse floating obligations will
      decrease when short term rates increase, and will increase when short term
      rates decrease. Such securities have the effect of providing a degree of
      investment leverage, since they may increase or decrease in value in response
      to changes, as an illustration, in market interest rates at a rate that
      is a multiple (typically two) of the rate at which fixed-rate, long term,
      tax-exempt securities increase or decrease in response to such changes.
      As a result, the market values of such securities generally will be more
      volatile than the market values of fixed-rate tax-exempt securities. To
      seek to limit the volatility of these securities, a Fund may purchase inverse
      floating obligations with shorter term maturities or limitations on the
      extent to which the interest rate may vary. FAM believes that indexed and
      inverse floating obligations represent a flexible portfolio management instrument
      for the Funds that allows FAM to vary the degree of investment leverage
      relatively efficiently under different market conditions.</font></td>
  </tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Call Rights.</I> Each
Fund may purchase a Municipal Bond issuer&#146;s rights to call all or a portion of such
Municipal Bond for mandatory tender for purchase (a &#147;Call Right&#148;). A holder of
a Call Right may exercise such right to require a mandatory tender for the purchase of
related Municipal Bonds, subject to certain conditions. A Call Right that is not
exercised prior to the maturity of the related Municipal Bond will expire without value.
The economic effect of holding both the Call Right and the related Municipal Bond is
identical to holding a Municipal Bond as a non-callable security.</FONT></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Repurchase
Agreements</I>. The Funds may invest in securities pursuant to repurchase agreements.
Repurchase agreements may be entered into only with a member bank of the Federal Reserve
System or a primary dealer in U.S. Government securities or an affiliate thereof. Under
such agreements, the seller agrees, upon entering into the contract, to repurchase the
security at a mutually agreed upon time and price, thereby determining the yield during
the term of the agreement. In the event of default by the seller under a repurchase
agreement, the Funds may suffer time delays and incur costs or possible losses in
connection with the disposition of the underlying securities.</FONT></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In general, for
Federal income tax purposes, repurchase agreements are treated  as collateralized loans
secured by the securities &#147;sold.&#148; Therefore, amounts  earned under such
agreements will not be considered tax-exempt interest.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>Information Regarding Options and Futures
Transactions</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund may
hedge all or a portion of its portfolio investments against  fluctuations in interest
rates through the use of options and certain financial  futures contracts and options
thereon. While each Fund&#146;s use of hedging  strategies is intended to reduce the
volatility of the net asset value of its  common stock, the net asset value of its common
stock will fluctuate. No  assurance can be given that a Fund&#146;s hedging transactions
will be effective. In  addition, because of the leveraged nature of the common stock,
hedging  transactions will result in a larger impact on the net asset value of the common
stock than would be the case if the common stock were not leveraged.  Furthermore, a Fund
may only engage in hedging activities from time to time and  may not necessarily be
engaging in hedging activities when movements in interest  rates occur. Neither Fund has
an obligation to enter into hedging transactions  and each may choose not to do so.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gains from
transactions in options and futures contracts distributed to  stockholders will be
taxable as ordinary income or, in certain circumstances, as  long term capital gains to
stockholders. See &#147;Comparison of the Funds &#151; Tax  Rules Applicable to the Funds
and their Stockholders &#151; Tax Treatment of Options  and Futures Transactions.&#148; In
order to obtain ratings of the AMPS from one or  more of the NRSROs, MuniYield Insured
may be required to limit its use of  hedging techniques in accordance with the specified
guidelines of the NRSROs.  See &#147;Rating Agency Guidelines&#148; below.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following is a
description of the options and futures transactions in which  each Fund may engage,
limitations on the Fund&#146;s use of such transactions and  risks associated with these
transactions. The investment policies with respect  to the hedging transactions of a Fund
are not fundamental policies and may be  modified by the Board of Directors of the Fund
without the approval of the  Fund&#146;s stockholders.</font></td></tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 27</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<!-- MARKER PAGE="sheet: 28; page: 28" -->



<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Writing Covered
Call Options</I>. Each Fund is authorized to write (<I>i.e.</I>, sell) covered call options with
respect to Municipal Bonds it owns, thereby giving the holder of the option the right to
buy the underlying security covered by the option from the Fund at the stated exercise
price until the option expires. Each Fund writes only covered call options, which means
that so long as the Fund is obligated as the writer of a call option, it will own the
underlying securities subject to the option. Neither Fund may write covered call options
on underlying securities in an amount exceeding 15% of the market value of its total
assets.</FONT></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund receives
a premium from writing a call option, which increases the  Fund&#146;s return on the
underlying security in the event the option expires  unexercised or is closed out at a
profit. By writing a call, a Fund limits its  opportunity to profit from an increase in
the market value of the underlying  security above the exercise price of the option for
as long as the Fund&#146;s  obligation as a writer continues. Covered call options serve
as a partial hedge  against a decline in the price of the underlying security. Each Fund
may engage  in closing transactions in order to terminate outstanding options that it has
written.</font></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Purchase of
Options</I>. Each Fund may purchase put options in connection with its hedging activities.
By buying a put, the Fund has a right to sell the underlying security at the exercise
price, thus limiting its risk of loss through a decline in the market value of the
security until the put expires. The amount of any appreciation in the value of the
underlying security will be partially offset by the amount of the premium paid for the
put option and any related transaction costs. Prior to its expiration, a put option may
be sold in a closing sale transaction; profit or loss from the sale will depend on
whether the amount received is more or less than the premium paid for the put option
plus the related transaction costs. A closing sale transaction cancels out the Fund&#146;s
position as the purchaser of an option by means of an offsetting sale of an identical
option prior to the expiration of the option it has purchased. In certain circumstances,
the Fund may purchase call options on securities held in its portfolio on which it has
written call options, or on securities which it intends to purchase. A Fund will not
purchase options on securities if, as a result of such purchase, the aggregate cost of
all outstanding options on securities held by the Fund would exceed 5% of the market
value of the Fund&#146;s total assets.</FONT></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Financial Futures
Contracts and Options</I>. Each Fund is authorized to purchase and sell certain financial
futures contracts and options thereon solely for the purposes of hedging its investments
in Municipal Bonds against declines in value and hedging against increases in the cost
of securities it intends to purchase. A financial futures contract obligates the seller
of a contract to deliver and the purchaser of a contract to take delivery of the type of
financial instrument covered by the contract or, in the case of index-based financial
futures contracts, to make and accept a cash settlement, at a specific future time for a
specified price. A sale of financial futures contracts may provide a hedge against a
decline in the value of portfolio securities because such depreciation may be offset, in
whole or in part, by an increase in the value of the position in the financial futures
contracts. A purchase of financial futures contracts may provide a hedge against an
increase in the cost of securities intended to be purchased, because such appreciation
may be offset, in whole or in part, by an increase in the value of the position in the
financial futures contracts.</FONT></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The purchase or
sale of a financial futures contract differs from the purchase  or sale of a security in
that no price or premium is paid or received. Instead,  an amount of cash or securities
acceptable to the broker equal to approximately  5% of the contract amount must be
deposited with the broker. This amount is  known as initial margin. Subsequent payments
to and from the broker, called  variation margin, are made on a daily basis as the price
of the financial  futures contract fluctuates making the long and short positions in the
financial  futures contract more or less valuable.</font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund may purchase and
      sell financial futures contracts based on The Bond Buyer Municipal Bond
      Index, a price weighted measure of the market value of 40 large tax-exempt
      issues, and purchase and sell put and call options on such financial futures
      contracts for the purpose of hedging Municipal Bonds that the Fund holds
      or anticipates purchasing against adverse changes in interest rates. Each
      Fund also may purchase and sell financial futures contracts on U.S. Government
      securities and purchase and sell put and call options on such financial
      futures contracts for such hedging purposes. With respect to U.S. Government
      securities, currently there are financial futures contracts based on long
      term U.S. Treasury bonds, U.S. Treasury notes, Government National Mortgage
      Association Certificates and three month U.S. Treasury bills.</font></td>
  </tr></table>


<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 28</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to
policies adopted by its Board of Directors, each Fund also may engage  in transactions in
other financial futures contracts, such as financial futures  contracts on other
municipal bond indices that may become available, if FAM  should determine that there is
normally sufficient correlation between the  prices of such financial futures contracts
and the Municipal Bonds in which the  Fund invests to make such hedging appropriate.</font></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Over-the-Counter
Options</I>. Each Fund may engage in options and futures transactions on exchanges and in
the over-the-counter markets (&#147;OTC options&#148;). In general, exchange-traded
contracts are third-party contracts (i.e., performance of the parties&#146; obligations
is guaranteed by an exchange or clearing corporation) with standardized strike prices
and expiration dates. OTC option transactions are two-party contracts with price and
terms negotiated by the buyer and seller.</FONT></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Restrictions on
OTC Options</I>. Each Fund will engage in transactions in OTC options only with banks or
dealers that have capital of at least $50 million or whose obligations are guaranteed by
an entity having capital of at least $50 million. Certain OTC options and assets used to
cover OTC options written by the Funds are considered to be illiquid. The illiquidity of
such options or assets may prevent a successful sale of such options or assets, result
in a delay of sale, or reduce the amount of proceeds that otherwise might be realized.</FONT></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Risk Factors in
Financial Futures Contracts and Options Thereon</I>. Use of futures transactions involves
the risk of imperfect correlation in movements in the price of financial futures
contracts and movements in the price of the security that is the subject of the hedge.
If the price of the financial futures contract moves more or less than the price of the
security that is the subject of the hedge, a Fund will experience a gain or loss that
will not be completely offset by movements in the price of such security. There is a
risk of imperfect correlation where the securities underlying financial futures
contracts have different maturities, ratings, geographic compositions or other
characteristics different from those of the security being hedged. In addition, the
correlation may be affected by additions to or deletions from the index that serves as a
basis for a financial futures contract. Finally, in the case of financial futures
contracts on U.S. Government securities and options on such financial futures contracts,
the anticipated correlation of price movements between the U.S. Government securities
underlying the futures or options and Municipal Bonds may be adversely affected by
economic, political, legislative or other developments which have a disparate impact on
the respective markets for such securities.</FONT></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under regulations of the Commodity
      Futures Trading Commission (the &#147;CFTC&#148;), the futures trading activities
      described herein will not result in either Fund being deemed a &#147;commodity
      pool&#148; and neither Fund needs to be operated by a person registered
      with the CFTC as a &#147;commodity pool operator&#148;.</font></td>
  </tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When a Fund purchases a financial
      futures contract, or writes a put option or purchases a call option thereon,
      it will maintain an amount of cash, cash equivalents (<i>e.g.</i>, commercial
      paper and daily tender adjustable notes) or liquid securities in a segregated
      account with the Fund&#146;s custodian, so that the amount so segregated
      plus the amount of initial and variation margin held in the account of its
      broker equals the market value of the financial futures contract, thereby
      ensuring that the use of such financial futures contract is unleveraged.</font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although certain
risks are involved in options and futures transactions, FAM  believes that, because each
Fund will engage in options and futures transactions  only for hedging purposes, the
options and futures portfolio strategies of a  Fund will not subject the Fund to the
risks associated with speculation in  options and futures transactions.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The volume of
trading in the exchange markets with respect to Municipal Bond  options may be limited,
and it is impossible to predict the amount of trading  interest that may exist in such
options. In addition, there can be no assurance  that viable exchange markets will
continue to be available.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund intends
to enter into options and futures transactions, on an exchange  or in the
over-the-counter market, only if there appears to be a liquid  secondary market for such
options or futures. There can be no assurance,  however, that a liquid secondary market
will exist at any specific time. Thus,  it may not be possible to close an options or
futures transaction. The inability  to close options and futures positions also could
have an adverse impact on a  Fund&#146;s ability to hedge effectively its portfolio.
There is also the risk of  loss by a Fund of margin deposits or collateral in the event
of bankruptcy of a  broker with which the Fund has an open position in an option or
financial  futures contract.</font></td></tr></table>


<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 29</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The liquidity of a
secondary market in a financial futures contract may be  adversely affected by &#147;daily
price fluctuation limits&#148; established by commodity  exchanges that limit the amount
of fluctuation in a financial futures contract  price during a single trading day. Once
the daily limit has been reached in the  contract, no trades may be entered into at a
price beyond the limit, thus  preventing the liquidation of open futures positions.
Prices have in the past  reached or exceeded the daily limit on a number of consecutive
trading days.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If it is not
possible to close a financial futures position entered into by a  Fund, the Fund would
continue to be required to make daily cash payments of  variation margin in the event of
adverse price movements. In such a situation,  if the Fund has insufficient cash, it may
have to sell portfolio securities to  meet daily variation margin requirements at a time
when it may be  disadvantageous to do so.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The successful use
of these transactions also depends on the ability of FAM to  forecast correctly the
direction and extent of interest rate movements within a  given time frame. To the extent
these rates remain stable during the period in  which a financial futures contract is
held by a Fund or move in a direction  opposite to that anticipated, the Fund may realize
a loss on the hedging  transaction that is not fully or partially offset by an increase
in the value of  portfolio securities. As a result, the Fund&#146;s total return for such
period may  be less than if it had not engaged in the hedging transaction. Furthermore,
the  Fund will only engage in hedging transactions from time to time and may not
necessarily be engaging in hedging transactions when movements in interest rates  occur.</font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2><B>Municipal Interest Rate Swap Transactions</B></font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In order to hedge
the value of the Fund against interest rate fluctuations or to  enhance the Fund&#146;s
income, each Fund may enter into interest rate swap  transactions such as Municipal
Market Data AAA Cash Curve swaps (&#147;MMD Swaps&#148;) or  Bond Market Association
Municipal Swap Index swaps (&#147;BMA Swaps&#148;). To the extent  that a Fund enters
into these transactions, the Fund expects to do so primarily  to preserve a return or
spread on a particular investment or portion of its  portfolio or to protect against any
increase in the price of securities the Fund  anticipates purchasing at a later date.
Each Fund intends to use these  transactions primarily as a hedge rather than as a
speculative investment.  However, each Fund also may invest in MMD Swaps and BMA Swaps to
enhance income  or gain or to increase the Fund&#146;s yield, for example, during periods
of steep  interest rate yield curves (i.e., wide differences between short term and long
term interest rates).</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund may
purchase and sell BMA Swaps in the BMA swap market. In a BMA Swap,  a Fund exchanges with
another party their respective commitments to pay or  receive interest (e.g., an exchange
of fixed rate payments for floating rate  payments linked to the Bond Market Association
Municipal Swap Index). Because  the underlying index is a tax-exempt index, BMA Swaps may
reduce cross-market  risks incurred by a Fund and increase a Fund&#146;s ability to hedge
effectively. BMA  Swaps are typically quoted for the entire yield curve, beginning with a
seven  day floating rate index out to 30 years. The duration of a BMA Swap is
approximately equal to the duration of a fixed-rate Municipal Bond with the same
attributes as the swap (e.g., coupon, maturity, call feature).</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund may also
purchase and sell MMD Swaps, also known as MMD rate locks. An  MMD Swap permits a Fund to
lock in a specified municipal interest rate for a  portion of its portfolio to preserve a
return on a particular investment or a  portion of its portfolio as a duration management
technique or to protect  against any increase in the price of securities to be purchased
at a later date.  By using an MMD Swap, a Fund can create a synthetic long or short
position,  allowing the Fund to select the most attractive part of the yield curve. An
MMD  Swap is a contract between a Fund and an MMD Swap provider pursuant to which the
parties agree to make payments to each other on a notional amount, contingent  upon
whether the Municipal Market Data AAA General Obligation Scale is above or  below a
specified level on the expiration date of the contract. For example, if  a Fund buys an
MMD Swap and the Municipal Market Data AAA General Obligation  Scale is below the
specified level on the expiration date, the counterparty to  the contract will make a
payment to the Fund equal to the specified level minus  the actual level, multiplied by
the notional amount of the contract. If the  Municipal Market Data AAA General Obligation
Scale is above the specified level  on the expiration date, a Fund will make a payment to
the counterparty equal to  the actual level minus the specified level, multiplied by the
notional amount of  the contract.</font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with investments
      in BMA and MMD Swaps, there is a risk that municipal yields will move in
      the opposite direction than anticipated by a Fund, which would cause the
      Fund to make payments to its counterparty in the transaction that could
      adversely affect the Fund&#146;s performance. Neither Fund has any obligation
      to enter into BMA or MMD Swaps and may not do so. </font></td>
  </tr></table>


<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 30</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<!-- MARKER PAGE="sheet: 31; page: 31" -->





<P><table width=600><tr>
    <td><font size=2>The net amount of the excess, if any, of a Fund&#146;s obligations
      over its entitlements with respect to each interest rate swap will be accrued
      on a daily basis and an amount of cash or liquid securities having an aggregate
      net asset value at least equal to the accrued excess will be maintained
      in a segregated account by the Fund&#146;s custodian.</font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2><B>Investment Restrictions</B></font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Funds have substantially
      similar investment restrictions. Certain of the investment restrictions
      are fundamental policies of each Fund and may not be changed without the
      approval of the holders of a majority of the outstanding shares of common
      stock and, with respect to MuniYield Insured, the outstanding shares of
      AMPS and any other preferred stock, voting together as a single class, and
      a majority of the outstanding shares of AMPS and any other preferred stock,
      voting separately as a class. These fundamental investment restrictions
      will also be the fundamental restrictions of the Combined Fund. (For this
      purpose and under the Investment Company Act, for the common stock and AMPS
      voting together as a single class, &#147;majority&#148; means the lesser
      of (i) 67% of the shares of each class of capital stock represented at a
      meeting at which more than 50% of the outstanding shares of each class of
      capital stock are represented or (ii) more than 50% of the outstanding shares
      of each class of capital stock.) For the AMPS voting separately as a single
      class, &#147;majority&#148; means more than 50% of the outstanding AMPS.
      Each Fund also has certain non-fundamental investment restrictions, which
      may be changed by each Fund&#146;s Board of Directors without shareholder
      approval. After the Reorganization, the Combined Fund will be governed by
      MuniYield Insured&#146;s investment restrictions.</font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under its
fundamental investment restrictions, MuniYield Insured may not:</font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
    <td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Make investments
      for the purpose of exercising control or management.</font></td>
  </tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)
Purchase securities of other investment companies, except in connection with  a merger,
consolidation, acquisition or reorganization, or by purchase in the  open market of
securities of closed-end investment companies and only if  immediately thereafter not
more than 10% of the Fund&#146;s total assets would be  invested in such securities.</font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)
Purchase or sell real estate, real estate limited partnerships, commodities  or commodity
contracts; provided that the Fund may invest in securities secured  by real estate or
interests therein or issued by companies that invest in real  estate or interests therein
and the Fund may purchase and sell financial  futures contracts and options therein.</font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)
Issue senior securities other than preferred stock or borrow amounts in  excess of 5% of
its total assets taken at market value; provided, however, that  the Fund is authorized
to borrow moneys in excess of 5% of the value of its  total assets for the purpose of
repurchasing shares of Common Stock or redeeming  shares of preferred stock.</font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)
Underwrite securities of other issuers except insofar as the Fund may be  deemed an
underwriter under the Securities Act of 1933 in selling portfolio  securities.</font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6)
Make loans to other persons, except that the Fund may purchase Municipal  Bonds and other
debt securities in accordance with its investment objective,  policies and limitations.</font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
    <td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) Purchase any
      securities on margin, except that the Fund may obtain such short-term credit
      as may be necessary for the clearance of purchases and sales of portfolio
      securities (the deposit or payment by the Fund of initial or variation margin
      in connection with financial futures contracts and options thereon is not
      considered the purchase of a security on margin).</font></td>
  </tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8)
Make short sales of securities or maintain a short position or invest in put,  call,
straddle or spread options, except that the Fund may write, purchase and  sell options
and futures on Municipal Bonds U.S. Government obligations and  related indices or
otherwise in connection with bona fide hedging activities.</font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9)
Invest more than 25% of its total assets (taken at market value at the time  of each
investment) in securities of issuers in a single industry; provided  that, for purposes
of this restriction, states municipalities and their  political subdivision are not
considered to be part of any industry.</font></td></tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 31</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 32; page: 32" -->



<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An additional
non-fundamental investment restriction adopted by the Fund, which  may be changed by the
Board of Directors, provides that the Fund may not  mortgage, pledge, hypothecate or in
any manner transfer, as security for  indebtedness, any securities owned or held by the
Fund except as may be  necessary in connection with borrowings mentioned in (4) above or
except as may  be necessary in connection with transactions in financial futures
contracts and  option thereon.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of
fundamental investment restriction (9), the exception for  states, municipalities and
their political subdivisions applies only to  tax-exempt securities issued by such
entities.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MuniInsured has
fundamental investment restrictions that are substantially  similar to investment
restrictions (1), (2), (3), (4), (5) and (6) listed above.  MuniInsured has
non-fundamental investment restrictions that are substantially  similar to investment
restrictions (7), (8) and (9) listed above.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If a percentage
restriction on the investment or use of assets set forth above  is adhered to at the time
a transaction is effected, later changes in  percentages resulting from changing values
will not be considered a violation.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For so long as
shares of its AMPS are rated by Moody&#146;s, MuniYield Insured will  not change its
additional investment restrictions (as discussed above) unless it  receives written
confirmation from Moody&#146;s that any such change would not impair  the rating then
assigned to the shares of AMPS by Moody&#146;s.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FAM and Merrill
Lynch, Pierce, Fenner &amp; Smith Incorporated (&#147;Merrill Lynch&#148;) are  owned and
controlled by Merrill Lynch &amp; Co., Inc. (&#147;ML &amp; Co.&#148;). Because of the
affiliation of Merrill Lynch with FAM, each Fund is prohibited from engaging in  certain
transactions involving Merrill Lynch except pursuant to an exemptive  order or otherwise
in compliance with the provisions of the Investment Company  Act and the rules and
regulations thereunder. Included among such restricted  transactions will be purchases
from or sales to Merrill Lynch of securities in  transactions in which it acts as
principal. The Funds have received an exemptive  order under which they may purchase
investment grade Municipal Bonds through  group orders from an underwriting syndicate of
which Merrill Lynch is a member  subject to conditions set forth in such order (the &#147;Group
Order Exemptive  Order&#148;). A group order is an order for securities held in an
underwriting  syndicate for the account of all members of the syndicate, and in
proportion to  their respective participation in the syndicate. An exemptive order has
also  been obtained that permits the Funds to effect principal transactions with  Merrill
Lynch in high quality, short term, tax-exempt securities subject to  conditions set forth
in such order. The Funds may consider in the future  requesting an order permitting other
principal transactions with Merrill Lynch,  but no assurance can be given that such
application will be made and, if made,  that such order would be granted.</font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2><B>Rating Agency Guidelines</B></font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MuniYield Insured
intends that, so long as shares of its AMPS are outstanding,  the composition of its
portfolio will reflect guidelines established by Moody&#146;s  and S&amp;P in connection
with its receipt of a rating for such shares on or prior  to their date of original issue
of at least Aaa from Moody&#146;s and AAA from S&amp;P.  Moody&#146;s and S&amp;P, which
are NRSRO&#146;s, issue ratings for various securities  reflecting the perceived
creditworthiness of such securities. The guidelines for  rating AMPS have been developed
by Moody&#146;s and S&amp;P in connection with issuances  of asset-backed and similar
securities, including debt obligations and variable  rate preferred stock, generally on a
case by case basis through discussions with  the issuers of these securities. The
guidelines are designed to ensure that  assets underlying outstanding debt or preferred
stock will be sufficiently  varied and of sufficient quality and amount to justify
investment grade ratings.  The guidelines do not have the force of law but have been
adopted by MuniYield  Insured in order to satisfy current requirements necessary for Moody&#146;s
and S&amp;P  to issue the above described ratings for shares of AMPS, which ratings
generally  are relied upon by institutional investors in purchasing such securities. The
guidelines provide a set of tests for portfolio composition and asset coverage  that
supplement (and in some cases are more restrictive than) the applicable  requirements
under the Investment Company Act.</font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MuniYield Insured may, but
      is not required to, adopt any modifications to these guidelines that hereafter
      may be established by Moody&#146;s or S&amp;P. Failure to adopt any such
      modifications, however, may result in a change in the ratings described
      above or a withdrawal of the ratings altogether. In addition, any rating
      agency providing a rating for the shares of AMPS, at any time, may change
      or withdraw any such rating. As set forth in the Articles Supplementary
      of MuniYield Insured, the Board of Directors, without stockholder approval,
      may modify certain definitions or restrictions that have been adopted by
      the Fund pursuant to the rating </font></td>
  </tr></table>



<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 32</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 33; page: 33" -->




<P><table width=600><tr>
    <td><font size=2>agency guidelines, provided the Board of Directors has obtained
      written confirmation from Moody&#146;s and S&amp;P that any such change
      would not impair the ratings then assigned by Moody&#146;s and S&amp;P to
      the AMPS. See &#147;The Reorganization &#151; Risk Factors and Special Considerations
      &#151; Ratings Considerations.&#148;</font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For so long as any
shares of MuniYield Insured&#146;s AMPS are rated by Moody&#146;s or  S&amp;P, as the
case may be, the Fund&#146;s use of options and financial futures  contracts and options
thereon will be subject to certain limitations mandated by  the rating agencies.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>Portfolio Composition</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There are
differences in concentration among the types of securities held in the  portfolio of each
Fund. For MuniYield Insured, as of February 27, 2004,  approximately 53.88%, 28.30% and
17.82% of the market value of its portfolio was  invested in revenue bonds, general
obligation bonds, and cash equivalents,  respectively. For MuniInsured, as of February
27, 2004, approximately 21.45%,  61.80% and 16.75% of the market value of its portfolio
was invested in revenue  bonds, general obligation bonds, and cash equivalents,
respectively.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although the
investment portfolios of both Funds must satisfy the same standards  of credit quality,
the actual securities owned by each Fund are different. As a  result, there are certain
differences in the composition of the two investment  portfolios. The tables below set
forth ratings information for the Municipal  Bonds held by each Fund, as of a certain
date.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MuniYield
Insured</i></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of February 27,
2004, approximately 97.48% of the market value of MuniYield  Insured&#146;s portfolio was
invested in long term municipal obligations and  approximately 2.52% of the market value
of MuniYield Insured&#146;s portfolio was  invested in short term municipal obligations
and affiliated money market mutual  funds. The following table sets forth certain
information with respect to the  composition of MuniYield Insured&#146;s long term
municipal obligation investment  portfolio as of February 27, 2004.</font></td></tr></table>


<br>
<table border=0 cellspacing=0 cellpadding=0 width="600">
  <tr align="center">
    <td valign=bottom width=140><font size="1"><b>S&amp;P* </b></font>
      <hr size="1" noshade width="50%">
    </td>
    <td valign=bottom width=119><font size="1"><b>Moody&#146;s*</b></font>
      <hr size="1" noshade width="50%">
    </td>
    <td valign=bottom colspan="2"><font size="1"><b>Number of <br>
      Issues</b> </font>
      <hr size="1" noshade width="60%">
    </td>
    <td valign=bottom colspan="2"><font size="1"><b>Value<br>
      (in thousands)</b> </font>
      <hr size="1" noshade width="65%">
    </td>
    <td valign=bottom align="right" width=81><font size="1"><b>Percent&nbsp;</b></font>
      <hr size="1" noshade width="50%" align="right">
    </td>
    <td valign=bottom width=37>&nbsp;</td>
  </tr>
  <tr>
    <td valign=bottom align="center" width=140> <font size="2">AAA</font></td>
    <td valign=bottom align="center" width=119> <font size="2">Aaa</font></td>
    <td valign=bottom align="right" width=63> <font size="2">156</font></td>
    <td valign=bottom align="right" width=41>&nbsp;&nbsp;&nbsp;</td>
    <td valign=bottom align="right" width=89> <font size="2">$1,210,706</font></td>
    <td valign=bottom align="right" width=30>&nbsp;&nbsp;&nbsp;</td>
    <td valign=bottom align="right" width=81> <font size="2">86.56%</font></td>
    <td valign=bottom align="right" width=37>&nbsp;</td>
  </tr>
  <tr>
    <td valign=bottom align="center" width=140> <font size="2">A</font></td>
    <td valign=bottom align="center" width=119> <font size="2">Aa</font></td>
    <td valign=bottom align="right" width=63> <font size="2">10</font></td>
    <td valign=bottom align="right" width=41>&nbsp;</td>
    <td valign=bottom align="right" width=89> <font size="2">40,016</font></td>
    <td valign=bottom align="right" width=30>&nbsp;</td>
    <td valign=bottom align="right" width=81> <font size="2">2.86%</font></td>
    <td valign=bottom align="right" width=37>&nbsp;</td>
  </tr>
  <tr>
    <td valign=bottom align="center" width=140> <font size="2">A</font></td>
    <td valign=bottom align="center" width=119> <font size="2">A</font></td>
    <td valign=bottom align="right" width=63> <font size="2">10</font></td>
    <td valign=bottom align="right" width=41>&nbsp;</td>
    <td valign=bottom align="right" width=89> <font size="2">44,765</font></td>
    <td valign=bottom align="right" width=30>&nbsp;</td>
    <td valign=bottom align="right" width=81> <font size="2">3.20%</font></td>
    <td valign=bottom align="right" width=37>&nbsp;</td>
  </tr>
  <tr>
    <td valign=bottom align="center" width=140> <font size="2">BBB</font></td>
    <td valign=bottom align="center" width=119> <font size="2">Baa</font></td>
    <td valign=bottom align="right" width=63> <font size="2">14</font></td>
    <td valign=bottom align="right" width=41>&nbsp;</td>
    <td valign=bottom align="right" width=89> <font size="2">103,147</font></td>
    <td valign=bottom align="right" width=30>&nbsp;</td>
    <td valign=bottom align="right" width=81> <font size="2">7.38%</font></td>
    <td valign=bottom align="right" width=37>&nbsp;</td>
  </tr>
  <tr>
    <td valign=bottom align="center" width=140>&nbsp;</td>
    <td valign=bottom align="center" width=119>&nbsp;</td>
    <td valign=bottom align="right" width=63>
      <hr noshade size="1" width="30%" align="right">
    </td>
    <td valign=bottom align="right" width=41>&nbsp;</td>
    <td valign=bottom align="right" width=89>
      <hr noshade size="1" width="60%" align="right">
    </td>
    <td valign=bottom align="right" width=30>&nbsp;</td>
    <td valign=bottom align="right" width=81>
      <hr noshade size="1" width="45%" align="right">
    </td>
    <td valign=bottom align="right" width=37>&nbsp;</td>
  </tr>
  <tr>
    <td valign=bottom align="center" width=140>&nbsp; </td>
    <td valign=bottom align="center" width=119> <font size="2">Total</font></td>
    <td valign=bottom align="right" width=63> <font size="2">190</font></td>
    <td valign=bottom align="right" width=41>&nbsp;</td>
    <td valign=bottom align="right" width=89> <font size="2">$1,398,634</font></td>
    <td valign=bottom align="right" width=30>&nbsp;</td>
    <td valign=bottom align="right" width=81> <font size="2">100%</font></td>
    <td valign=bottom align="right" width=37>&nbsp;</td>
  </tr>
</table>
<table width=600><tr><td><hr size=1 noshade align=left  width=75></td></tr></table>

<table width=600><tr><td width=4% valign=top><font size="1">* </font></td><td width=2%><font size="1"></font></td><td width=94%><font size="1"> Ratings:
Using the higher of S&amp;P&#146;s or Moody&#146;s rating on the Fund&#146;s  municipal
obligations. S&amp;P&#146;s rating categories may be modified further by a  plus (+) or
minus (-) in AA, A and BBB ratings. Moody&#146;s rating categories  may be modified
further by a 1, 2 or 3 in Aa, A and Baa ratings. See  Exhibit IV &#151; &#147;Ratings of
Municipal Bonds and Commercial Paper.&#148;</font></td></tr></table>

<p><table width=600><tr><td><font size=2><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MuniInsured</i></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of February 27,
2004, approximately 96.50% of the market value of  MuniInsured&#146;s portfolio was
invested in long term municipal obligations and  approximately 3.50% of the market value
of MuniInsured&#146;s portfolio was invested  in short term municipal obligations. The
following table sets forth certain  information with respect to the composition of
MuniInsured&#146;s long term municipal  obligation investment portfolio as of February
27, 2004.</font></td></tr></table>





<br>
<table border=0 cellspacing=0 cellpadding=0 width="600">
  <tr align="center">
    <td valign=bottom width=140><font size="1"><b>S&amp;P* </b></font>
      <hr size="1" noshade width="50%">
    </td>
    <td valign=bottom width=119><font size="1"><b>Moody&#146;s*</b></font>
      <hr size="1" noshade width="50%">
    </td>
    <td valign=bottom colspan="2"><font size="1"><b>Number of <br>
      Issues</b> </font>
      <hr size="1" noshade width="60%">
    </td>
    <td valign=bottom colspan="2"><font size="1"><b>Value<br>
      (in thousands)</b> </font>
      <hr size="1" noshade width="65%">
    </td>
    <td valign=bottom align="right" width=81><font size="1"><b>Percent&nbsp;</b></font>
      <hr size="1" noshade width="50%" align="right">
    </td>
    <td valign=bottom width=37>&nbsp;</td>
  </tr>
  <tr>
    <td valign=bottom height="20" align="center" width=137> <font size="2">AAA</font></td>
    <td valign=bottom height="20" align="center" width=124> <font size="2">Aaa</font></td>
    <td valign=bottom height="20" align="right" width=62> <font size="2">48</font></td>
    <td valign=bottom height="20" align="right" width=41>&nbsp;&nbsp;&nbsp;</td>
    <td valign=bottom height="20" align="right" width=92> <font size="2">$67,952</font></td>
    <td valign=bottom height="20" align="right" width=29>&nbsp;&nbsp;&nbsp;</td>
    <td valign=bottom height="20" align="right" width=82> <font size="2">88.01%</font></td>
    <td valign=bottom height="20" align="right" width=33>&nbsp;</td>
  </tr>
  <tr>
    <td valign=bottom align="center" width=137> <font size="2">AA</font></td>
    <td valign=bottom align="center" width=124> <font size="2">Aa</font></td>
    <td valign=bottom align="right" width=62> <font size="2">2</font></td>
    <td valign=bottom align="right" width=41>&nbsp;</td>
    <td valign=bottom align="right" width=92> <font size="2">1,618</font></td>
    <td valign=bottom align="right" width=29>&nbsp;</td>
    <td valign=bottom align="right" width=82> <font size="2">2.09%</font></td>
    <td valign=bottom align="right" width=33>&nbsp;</td>
  </tr>
  <tr>
    <td valign=bottom align="center" width=137> <font size="2">BBB</font></td>
    <td valign=bottom align="center" width=124> <font size="2">Baa</font></td>
    <td valign=bottom align="right" width=62> <font size="2">6</font></td>
    <td valign=bottom align="right" width=41>&nbsp;</td>
    <td valign=bottom align="right" width=92> <font size="2">7,643</font></td>
    <td valign=bottom align="right" width=29>&nbsp;</td>
    <td valign=bottom align="right" width=82> <font size="2">9.90%</font></td>
    <td valign=bottom align="right" width=33>&nbsp;</td>
  </tr>
  <tr>
    <td valign=bottom align="center" width=137>&nbsp;</td>
    <td valign=bottom align="center" width=124>&nbsp;</td>
    <td valign=bottom align="right" width=62>
      <hr noshade size="1" width="30%" align="right">
    </td>
    <td valign=bottom align="right" width=41>&nbsp;</td>
    <td valign=bottom align="right" width=92>
      <hr noshade size="1" width="45%" align="right">
    </td>
    <td valign=bottom align="right" width=29>&nbsp;</td>
    <td valign=bottom align="right" width=82>
      <hr noshade size="1" width="50%" align="right">
    </td>
    <td valign=bottom align="right" width=33>&nbsp;</td>
  </tr>
  <tr>
    <td valign=bottom align="center" width=137>&nbsp; </td>
    <td valign=bottom align="center" width=124> <font size="2">Total</font></td>
    <td valign=bottom align="right" width=62> <font size="2">56</font></td>
    <td valign=bottom align="right" width=41>&nbsp;</td>
    <td valign=bottom align="right" width=92> <font size="2">$77,213</font></td>
    <td valign=bottom align="right" width=29>&nbsp;</td>
    <td valign=bottom align="right" width=82> <font size="2">100%</font></td>
    <td valign=bottom align="right" width=33>&nbsp;</td>
  </tr>
</table>
<table width=600><tr><td><hr size=1 noshade align=left  width=75></td></tr></table>

<table width=600><tr><td width=4% valign=top><font size="1">* </font></td><td width=2%><font size="1"></font></td><td width=94%><font size="1"> Ratings:
Using the higher of S&amp;P&#146;s or Moody&#146;s rating on the Fund&#146;s  municipal
obligations. S&amp;P&#146;s rating categories may be modified further by a  plus (+) or
minus (-) in AA, A and BBB ratings. Moody&#146;s rating categories  may be modified
further by a 1, 2 or 3 in Aa, A and Baa ratings. See  Exhibit IV &#151; &#147;Ratings of
Municipal Bonds and Commercial Paper.&#148;</font></td></tr></table>


<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 33</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<!-- MARKER PAGE="sheet: 34; page: 34" -->




<p><table width=600><tr><td><font size=2><B>Performance</B></font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The table below details for
      each Fund the yield and tax equivalent yield for the 30 days ended October
      31, 2003 and the average annual total return for the periods shown. The
      performance figures for MuniYield Insured reflect the effects of the voluntary
      fee waivers and expense reimbursements currently in effect for that Fund
      and would be lower if such waivers and reimbursements were not included.</font></td>
  </tr></table>


<br>
<table border=0 cellspacing=0 cellpadding=0 width="600">
  <tr valign="bottom" align="center">
    <td rowspan=2> <font size="1">&nbsp;</font></td>
    <td rowspan=2> <font size="1"><b>Yield-30 days<br>
      ended <br>
      October 31, 2003, </b></font>
      <hr size="1" noshade width="90%">
    </td>
    <td rowspan=2> <font size="1"><b>Tax Equivalent Yield<br>
      30 days ended<br>
      October 31, 2003&#134; </b></font>
      <hr size="1" noshade width="90%">
    </td>
    <td colspan=3> <font size="1"><b> Average Annual Total Return</b></font>
      <hr size="1" noshade>
    </td>
  </tr>
  <tr>
    <td align="center"> <font size="1"><b>One Year ended <br>
      October 31, 2003 </b></font>
      <hr size="1" noshade width="90%">
    </td>
    <td align="center"> <font size="1"><b>Five Years ended<br>
      October 31, 2003 </b></font>
      <hr size="1" noshade width="90%">
    </td>
    <td align="center"> <font size="1"><b>Ten Years Ended<br>
      October 31, 2003 </b></font>
      <hr size="1" noshade width="90%">
    </td>
  </tr>
  <tr valign="bottom" align="center">
    <td align="left"> <b><font size="2">MuniYield Insured</font></b></td>
    <td> <font size="2"> 6.06%</font></td>
    <td> <font size="2"> 8.36%</font></td>
    <td> <font size="2"> 8.19%</font></td>
    <td> <font size="2"> 5.11%</font></td>
    <td> <font size="2"> 6.48%</font></td>
  </tr>
  <tr valign="bottom" align="center">
    <td align="left"> <font size="2"><b>MuniInsured</b></font></td>
    <td> <font size="2"> 4.65%</font></td>
    <td> <font size="2"> 6.41%</font></td>
    <td> <font size="2"> 8.32%</font></td>
    <td> <font size="2"> 4.81%</font></td>
    <td> <font size="2"> 5.01%</font></td>
  </tr>
</table>
<table width=600><tr><td><hr size=1 noshade align=left  width=75></td></tr></table>

<table width=600><tr><td width=4% valign=top><font size="1">+ </font></td><td width=2%><font size="1"></font></td><td width=94%><font size="1"> Assumes
a 27.5% Federal income tax rate.</font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The higher yield, tax equivalent
      yield and average annual total return of MuniYield Insured during certain
      of the periods above are partially attributable to its leveraged capital
      structure.<br>
      <B><br>
      Portfolio Transactions</B></font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The procedures for
engaging in portfolio transactions are the same for each  Fund. Subject to policies
established by the Board of Directors of each Fund,  FAM is primarily responsible for the
execution of each Fund&#146;s portfolio  transactions. In executing such transactions,
FAM seeks to obtain the best  results for each Fund, taking into account such factors as
price (including the  applicable brokerage commission or dealer spread), size of order,
difficulty of  execution and operational facilities of the firm involved and the firm&#146;s
risk in  positioning a block of securities. While FAM generally seeks reasonably
competitive commission rates, the Funds do not necessarily pay the lowest  commission or
spread available.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Neither Fund has
any obligation to deal with any broker or dealer in the  execution of transactions in
portfolio securities. Subject to obtaining the best  price and execution, securities
firms that provide supplemental investment  research to FAM, including Merrill Lynch, may
receive orders for transactions by  a Fund. Information so received will be in addition
to, and not in lieu of, the  services required to be performed by FAM under its
investment advisory  agreements with the Funds, and the expenses of FAM will not
necessarily be  reduced as a result of the receipt of such supplemental information.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund invests
in securities that are primarily traded in the  over-the-counter markets, and each Fund
normally deals directly with the dealers  who make markets in the securities involved,
except in those circumstances where  better prices and execution are available elsewhere.
Under the Investment  Company Act, except as permitted by exemptive order, persons
affiliated with a  Fund are prohibited from dealing with that Fund as principals in the
purchase  and sale of securities. Since transactions in the over-the-counter markets
usually involve transactions with dealers acting as principals for their own  account,
the Funds do not deal with affiliated persons, including Merrill Lynch  and its
affiliates, in connection with such transactions, except that, pursuant  to an exemptive
order obtained by FAM, a Fund may engage in principal  transactions with Merrill Lynch in
high quality, short term, tax-exempt  securities. An affiliated person of a Fund may
serve as its broker in  over-the-counter transactions conducted on an agency basis.</font></td></tr></table>


<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 34</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<!-- MARKER PAGE="sheet: 35; page: 35" -->



<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Funds also may
purchase tax-exempt debt instruments in individually  negotiated transactions with the
issuers. Because an active trading market may  not exist for such securities, the prices
that the Funds may pay for these  securities or receive on their resale may be lower than
that for similar  securities with a more liquid market.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of
Directors of each Fund has considered the possibility of  recapturing for the benefit of
the Funds brokerage commissions, dealer spreads  and other expenses of possible portfolio
transactions, such as underwriting  commissions, by conducting portfolio transactions
through affiliated entities,  including Merrill Lynch. For example, brokerage commissions
received by Merrill  Lynch could be offset against the investment advisory fees paid by
the Fund to  FAM. After considering all factors deemed relevant, the Directors of each
Fund  made a determination not to seek such recapture. The Directors will reconsider
this matter from time to time.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Periodic auctions
are conducted for the AMPS of MuniYield Insured by the Fund&#146;s  Auction Agent. The
auctions require the participation of one or more  broker-dealers, each of whom enters
into an agreement with the Auction Agent.  After each auction, the Auction Agent pays a
service charge, from funds provided  by the MuniYield Insured, to each broker-dealer at
the annual rate of 0.25%,  calculated on the basis of the purchase price of shares of the
relevant AMPS  placed by such broker-dealer at such auction.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>Portfolio Turnover</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Generally, neither
Fund purchases securities for short term trading profits.  However, either Fund may
dispose of securities without regard to the time that  they have been held when such
action, for defensive or other reasons, appears  advisable to FAM. (The portfolio
turnover rate is calculated by dividing the  lesser of purchases or sales of portfolio
securities for the particular fiscal  year by the monthly average of the value of the
portfolio securities owned by a  Fund during the particular fiscal year. For purposes of
determining this rate,  all securities whose maturities at the time of acquisition are
one year or less  are excluded.) A high portfolio turnover rate results in greater
transaction  costs, which are borne directly by the Fund, and also has certain tax
consequences for stockholders. The portfolio turnover rate for each Fund for the  fiscal
periods indicated is set forth below:</font></td></tr></table>


<br>
<table border=0 cellspacing=0 cellpadding=0 width="600">
  <tr>
    <td width=331 valign=bottom>&nbsp;</td>
    <td width=230 valign=bottom align="center" colspan="2"><font size="1"><b>Year
      Ended<br>
      October 31, </b></font>
      <hr size="1" noshade width="85%">
    </td>
  </tr>
  <tr>
    <td width=331 valign=bottom>
      <p><font size="2"><b>&nbsp;</b></font></p>
    </td>
    <td width=115 valign=bottom align="center"> <font size="1"><b>2003</b></font>
      <hr size="1" noshade width="60%">
    </td>
    <td width=115 valign=bottom align="center"> <font size="1"><b>2002</b></font>
      <hr size="1" noshade width="60%">
    </td>
  </tr>
  <tr>
    <td width=331 valign=bottom>
      <p><font size="2"><b>&nbsp;</b></font></p>
    </td>
    <td width=115 valign=bottom>
      <p align=center>&nbsp;</p>
    </td>
    <td width=115 valign=bottom>
      <p align=center>&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td width=331 valign=bottom>
      <p><font size="2"><b>MuniYield Insured</b></font></p>
    </td>
    <td width=115 valign=bottom align="center">
      <p><font size="2">114.05%</font></p>
    </td>
    <td width=115 valign=bottom align="center">
      <p><font size="2">97.34%</font></p>
    </td>
  </tr>
</table>
<br>
<table border=0 cellspacing=0 cellpadding=0 width="600">
  <tr>
    <td width=331 valign=bottom>&nbsp;</td>
    <td width=230 valign=bottom align="center" colspan="2"><font size="1"><b>Year
      Ended<br>
      September 30, </b></font>
      <hr size="1" noshade width="80%">
    </td>
  </tr>
  <tr>
    <td width=331 valign=bottom>&nbsp;</td>
    <td width=115 valign=bottom align="center"><font size="1"><b>2003</b></font>
      <hr size="1" noshade width="60%">
    </td>
    <td width=115 valign=bottom align="center"><font size="1"><b>2002</b></font>
      <hr size="1" noshade width="60%">
    </td>
  </tr>
  <tr>
    <td width=331 valign=bottom>
      <p><font size="2"><b>MuniInsured</b></font></p>
    </td>
    <td width=115 valign=bottom align="center">
      <p><font size="2">92.60%</font></p>
    </td>
    <td width=115 valign=bottom align="center">
      <p><font size="2">50.88%</font></p>
    </td>
  </tr>
</table>
<br>
<table width=600><tr><td><font size=2><B>Net Asset Value</B></font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The net asset value per share
      of common stock of each Fund is determined as of the close of business of
      the NYSE (generally, 4:00 p.m., Eastern time) on the last business day in
      each week. For purposes of determining the net asset value of a share of
      common stock of each Fund, the value of the securities held by the Fund
      plus any cash or other assets (including interest accrued but not yet received)
      minus all liabilities (including accrued expenses) and - for MuniYield Insured
      - the aggregate liquidation value of the outstanding shares of AMPS, is
      divided by the total number of shares of common stock outstanding at such
      time. Expenses, including the fees payable to FAM, are accrued daily.<br>
      <br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Municipal Bonds in which each Fund invests
      are traded primarily in the over-the-counter markets. In determining net
      asset value, each Fund uses the valuations of portfolio securities furnished
      by a pricing service approved by the Board of Directors. The pricing service
      typically values portfolio securities at the bid price or the yield equivalent
      when quotations are readily available. Municipal Bonds for which quotations
      are not readily available are valued at fair market value on a consistent
      basis as determined by the pricing service using a matrix system to determine
      valuations. The procedures of the pricing service and its valuations are
      reviewed by the officers of each Fund under the general supervision of the
      Board of Directors. The Board of Directors of each Fund has determined in
      good faith that the use of a pricing service is a fair method of determining
      the valuation of portfolio securities. The value of interest rate swaps,
      caps and floors is determined in accordance with a formula and then confirmed
      periodically by obtaining a bank quotation. Positions in options are valued
      at the last sale price on the market where any such option is principally
      traded. Positions in futures contracts are valued at closing prices for
      such contracts established by the exchange or dealer market on which they
      are traded, or if market quotations are not readily available, are valued
      at fair value on a consistent basis using methods approved in good faith
      by each Fund&#146;s Board of Directors. Obligations with remaining maturities
      of 60 days or less are valued at amortized cost unless this method no longer
      produces fair valuations. Repurchase agreements are valued at cost plus
      accrued interest. </font></td>
  </tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 35</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<!-- MARKER PAGE="sheet: 36; page: 36" -->



<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund determines and makes
      available for publication weekly the net asset value of its common stock.
      Currently, the net asset values of shares of publicly traded closed-end
      investment companies investing in debt securities are published in <i>Barron&#146;s</i>,
      the Monday edition of <i>The Wall Street Journal</i>, and the Monday and
      Saturday editions of <i>The New York Times</i>.</font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2><B>Capital Stock</B></font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund has outstanding shares
      of common stock. MuniYield also has outstanding shares of AMPS. MuniYield
      Insured Common Stock is traded on the NYSE and MuniInsured Common Stock
      is traded on the AMEX. The shares of MuniYield Insured commenced trading
      on the NYSE on March 27, 1992. As of February 27, 2004, the net asset value
      per share of MuniYield Insured Common Stock was $____ and the market price
      per share was $_____. The shares of MuniInsured Common Stock commenced trading
      on the AMEX on October&nbsp;__, 1987. As of February 27, 2004, the net asset
      value per share of MuniInsured Common Stock was $_____ and the market price
      per share was $_____.</font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MuniYield Insured
is authorized to issue 200,000,000 shares of capital stock and  MuniInsured is authorized
to issue 150,000,000 shares of capital stock. All  shares of capital stock of each Fund
initially were classified as common stock.  The Board of Directors of each Fund is
authorized to classify or reclassify any  unissued shares of capital stock by setting or
changing the preferences,  conversion or other rights, voting powers, restrictions,
limitations as to  dividends, qualifications, or terms or conditions of redemption. In
connection  with MuniYield Insured&#146;s offering of shares of AMPS, MuniYield Insured
reclassified 17,600 shares of unissued capital stock as AMPS.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common Stock</i></font></td></tr></table>

<br>
<table width=600>
  <tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Holders of each Fund&#146;s
      common stock are entitled to share equally in dividends declared by the
      Fund&#146;s Board of Directors payable to holders of the Fund&#146;s common
      stock and in the net assets of the Fund available for distribution to holders
      of the Fund&#146;s common stock, in the case of MuniYield Insured after
      payment of the preferential amounts payable to holders of any outstanding
      preferred stock. See &#147;Voting Rights&#148; and &#147;Liquidation Rights
      of Holders of AMPS&#148; below. Holders of each Fund&#146;s common stock
      do not have preemptive or conversion rights and shares of each Fund&#146;s
      common stock are not redeemable. The outstanding shares of common stock
      of each Fund are fully paid and nonassessable. </font></td>
  </tr>
</table>
<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;So long as any
shares of MuniYield Insured&#146;s AMPS or any other preferred stock  are outstanding,
holders of MuniYield Insured&#146;s common stock will not be  entitled to receive any
dividends or other distributions from the Fund unless  all accumulated dividends on
outstanding shares of the Fund&#146;s AMPS and any other  preferred stock have been paid,
and unless asset coverage (as defined in the  Investment Company Act) with respect to
such AMPS and any other preferred stock  would be at least 200% after giving effect to
such distributions.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MuniYield
Insured Preferred Stock</i></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The AMPS of
MuniYield Insured are shares of preferred stock of the Fund that  entitle their holders
to receive dividends when, as and if declared by the Board  of Directors, out of funds
legally available therefor, at a rate per annum that  may vary for the successive
dividend periods. MuniYield Insured&#146;s AMPS have a  liquidation preference of $25,000
per share; and are not traded on any stock  exchange or over-the-counter. MuniYield
Insured&#146;s AMPS can be purchased at an  auction or through broker-dealers who
maintain a secondary market in the AMPS.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Auctions generally
have been held and will be held every seven or 28 days for  the AMPS of MuniYield
Insured, unless the Fund elects, subject to certain  limitations, to declare a special
dividend period. The following table provides  information about the dividend rates for
each series of AMPS of MuniYield  Insured as of a recent auction.</font></td></tr></table>


<br>
<table border=0 cellspacing=0 cellpadding=0 width="600">
  <tr align="center">
    <td valign=bottom height="20">&nbsp;</td>
    <td valign=bottom height="20"><b><font size="1">Auction Date</font></b>
      <hr size="1" noshade width="80%">
    </td>
    <td valign=bottom height="20"><b><font size="1">Series</font></b>
      <hr size="1" noshade width="80%">
    </td>
    <td valign=bottom height="20"><b><font size="1">Auction Schedule</font></b>
      <hr size="1" noshade width="80%">
    </td>
    <td valign=bottom height="20"><b><font size="1">Dividend Rate</font></b>
      <hr size="1" noshade width="80%">
    </td>
    <td valign=bottom height="20">&nbsp;</td>
  </tr>
  <tr align="center">
    <td valign=bottom height="20">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td valign=bottom height="20">&nbsp; </td>
    <td valign=bottom height="20"> <font size="2">A</font></td>
    <td valign=bottom height="20"> <font size="2">28 day</font></td>
    <td valign=bottom height="20">&nbsp; </td>
    <td valign=bottom height="20">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
  </tr>
  <tr align="center">
    <td valign=bottom>&nbsp;</td>
    <td valign=bottom>&nbsp;</td>
    <td valign=bottom> <font size="2">B</font></td>
    <td valign=bottom> <font size="2">28 day</font></td>
    <td valign=bottom>&nbsp;</td>
    <td valign=bottom>&nbsp;</td>
  </tr>
  <tr align="center">
    <td valign=bottom>&nbsp;</td>
    <td valign=bottom>&nbsp;</td>
    <td valign=bottom><font size="2">C</font></td>
    <td valign=bottom><font size="2">28 day</font></td>
    <td valign=bottom>&nbsp;</td>
    <td valign=bottom>&nbsp;</td>
  </tr>
  <tr align="center">
    <td valign=bottom>&nbsp;</td>
    <td valign=bottom>&nbsp;</td>
    <td valign=bottom><font size="2">D</font></td>
    <td valign=bottom><font size="2">28 day</font></td>
    <td valign=bottom>&nbsp;</td>
    <td valign=bottom>&nbsp;</td>
  </tr>
  <tr align="center">
    <td valign=bottom>&nbsp;</td>
    <td valign=bottom>&nbsp;</td>
    <td valign=bottom><font size="2"> E</font></td>
    <td valign=bottom><font size="2">7 day </font></td>
    <td valign=bottom>&nbsp;</td>
    <td valign=bottom>&nbsp;</td>
  </tr>
  <tr align="center">
    <td valign=bottom>&nbsp;</td>
    <td valign=bottom>&nbsp;</td>
    <td valign=bottom><font size="2"> F</font></td>
    <td valign=bottom><font size="2">28 day</font></td>
    <td valign=bottom>&nbsp;</td>
    <td valign=bottom>&nbsp;</td>
  </tr>
  <tr align="center">
    <td valign=bottom>&nbsp;</td>
    <td valign=bottom>&nbsp;</td>
    <td valign=bottom><font size="2">G</font></td>
    <td valign=bottom><font size="2">7 day </font></td>
    <td valign=bottom>&nbsp;</td>
    <td valign=bottom>&nbsp;</td>
  </tr>
</table>
<br>
<font size="2"> </font><br>
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 36</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<!-- MARKER PAGE="sheet: 37; page: 37" -->



<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the
Investment Company Act, MuniYield Insured is permitted to have  outstanding more than one
series of preferred stock as long as no single series  has priority over another series
as to the distribution of assets of the Fund or  the payment of dividends. Holders of
MuniYield Insured&#146;s preferred stock do not  have preemptive rights to purchase any
shares of AMPS or any other preferred  stock that might be issued. The net asset value
per share of MuniYield Insured&#146;s  AMPS equals its liquidation preference plus
accumulated dividends per share.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The redemption
provisions pertaining to the AMPS of MuniYield Insured are  substantially similar. It is
anticipated that shares of AMPS of MuniYield  Insured will generally be redeemable at the
option of the Fund at a price equal  to their liquidation preference of $25,000 plus
accumulated but unpaid dividends  (whether or not earned or declared) to the date of
redemption plus, under  certain circumstances, a redemption premium. Shares of AMPS will
also be subject  to mandatory redemption at a price equal to their liquidation preference
plus  accumulated but unpaid dividends to the date of redemption upon the occurrence  of
certain specified events, such as the failure of MuniYield Insured to  maintain the asset
coverage for the AMPS specified by Moody&#146;s and S&amp;P in  connection with their
issuance of ratings on the AMPS.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>Certain Provisions of the Charters</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund&#146;s
Charter includes provisions that could have the effect of limiting  the ability of other
entities or persons to acquire control of the Fund or to  change the composition of its
Board of Directors and could have the effect of  depriving holders of common stock of an
opportunity to sell their shares at a  premium over prevailing market prices by
discouraging a third party from seeking  to obtain control of the Fund. A Director may be
removed from office with or  without cause by vote of the holders of at least 66 2/3% of
the votes entitled  to be voted on the matter. A Director elected by all of the holders
of capital  stock may be removed only by action of such holders, and, with respect to
MuniYield Insured, a Director elected by the holders of AMPS and any other  preferred
stock may be removed only by action of the holders of AMPS and any  other preferred stock.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, the
Charter of each Fund requires the favorable vote of the holders  of at least 66 2/3% of
all of the Fund&#146;s shares of capital stock, then entitled  to be voted, voting as a
single class, to approve, adopt or authorize the  following:</font></td></tr></table>

<table width=600>
  <tr>
    <td width=3%></td>
    <td width=1% valign=top><font size=3>&#149;</font></td>
    <td width=3%></td>
    <td width=93%><font size=2>a
merger or consolidation or statutory share exchange of the Fund with any other
corporation or entity,</font></td></tr></table>

<table width=600>
  <tr>
    <td width=3%></td>
    <td width=1% valign=top><font size=3>&#149;</font></td>
    <td width=3%></td>
    <td width=93%><font size=2>a
sale of all or substantially all of the Fund&#146;s assets (other than in the regular
course of the Fund&#146;s investment  activities), or</font></td></tr></table>

<table width=600>
  <tr>
    <td width=3%></td>
    <td width=1% valign=top><font size=3>&#149;</font></td>
    <td width=3%></td>
    <td width=93%><font size=2>a
liquidation or dissolution of the Fund,</font></td></tr></table>

<P><table width=600><tr><td><font size=2>unless such action has been approved, adopted or
authorized by the affirmative  vote of at least two-thirds of the total number of
Directors fixed in accordance  with the by-laws, in which case the affirmative vote of a
majority of all of the  votes entitled to be cast by stockholders of the Fund, voting as
a single class,  is required. With respect to MuniYield Insured, such approval, adoption
or  authorization of the foregoing also would require the favorable vote of at least  a
majority of the Fund&#146;s shares of preferred stock then entitled to be voted  thereon,
including the AMPS, voting as a separate class.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition,
conversion of a Fund to an open-end investment company would  require an amendment to the
Fund&#146;s Charter. The amendment would have to be  declared advisable by the Board of
Directors prior to its submission to  stockholders. Such an amendment would require the
affirmative vote of the  holders of at least 66 2/3% of the Fund&#146;s outstanding
shares of capital stock  (including, with respect to MuniYield Insured, the AMPS and any
other preferred  stock) entitled to be voted on the matter, voting as a single class (or
a  majority of such shares if the amendment was </font></td></tr></table>


<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 37</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;






<!-- *************************************************************************** -->
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<P><table width=600><tr><td><font size=2>previously approved, adopted or  authorized by
at least two-thirds of the total number of Directors fixed in  accordance  with the
by-laws), and, with respect to MuniYield Insured, the  affirmative vote of at  least a
majority of the outstanding shares of preferred  stock of a Fund (including the  AMPS),
voting as a separate class. Such a vote  also would satisfy a separate requirement  in
the Investment Company Act that the  change be approved by the stockholders.
Stockholders of an open-end investment  company may require the company to redeem their
shares of common stock at any  time (except in certain circumstances as authorized by or
under the Investment  Company Act) at their net asset value, less such redemption charge,
if any, as  might be in effect at the time of a redemption. All redemptions will be made
in  cash. If a Fund is converted to an open-end investment company, it could be  required
to liquidate portfolio securities to meet requests for redemptions and  the Common Stock
no longer would be listed on a stock exchange. Conversion to an  open-end investment
company would also require (i) with respect to MuniYield  Insured, redemption of all
outstanding shares of preferred stock (including the  AMPS) and (ii) changes in certain
of each Fund&#146;s investment policies and  restrictions, such as those relating to the
issuance of senior securities, the  borrowing of money and the purchase of illiquid
securities.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of
Directors of each Fund has determined that the 66 2/3% voting  requirements described
above, which are greater than the minimum requirements  under Maryland law or the
Investment Company Act, are in the best interests of  stockholders generally. Reference
should be made to the Charter of each Fund on  file with the Commission for the full text
of these provisions.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>Management of the Funds</B></font></td></tr></table>

<p><table width=600><tr>
    <td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Directors and Officers.</I>
      The Boards of Directors (the &#147;Directors&#148;) of MuniInsured and MuniYield
      Insured currently consist of the same eight individuals, seven of whom are
      not &#147;interested persons &#147;of each Fund as defined in the Investment
      Company Act. The Directors of each Fund are responsible for the overall
      supervision of the operations of each Fund and perform the various duties
      imposed on the directors of investment companies by the Investment Company
      Act and under applicable Maryland law. The Funds also share the same officers.
      For further information regarding the Directors and officers of each Fund,
      see &#147;Item 1: Election of Directors of MuniInsured Fund &#147;and Exhibit
      I &#151;&#147;Information Pertaining to Each Fund.&#148;</FONT></td>
  </tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Management and
Advisory Arrangements</I>. FAM provides each Fund with the same investment advisory and
management services. FAM is a limited partnership, the partners of which are ML &amp; Co.,
a financial services holding company and the parent of Merrill Lynch, and Princeton
Services, Inc. (&#147;Princeton Services&#148;). ML &amp; Co. and Princeton Services are
&#147;controlling persons&#148; of FAM as defined under the Investment Company Act
because of their ownership of its voting securities or their power to exercise a
controlling influence over its management or policies. FAM serves as the investment
adviser for each Fund pursuant to separate investment advisory agreements (each, an
&#147;Investment Advisory Agreement&#148;) that are substantially similar.</FONT></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FAM and its affiliates, including
      MLIM, act as the investment adviser to more than 100 registered investment
      companies and offer services to individuals and institutional accounts.
      As of February 2004, FAM and its affiliates had a total of approximately
      $______ billion in investment company and other portfolio assets under management.
      FAM was organized as an investment adviser in 1977 and offers investment
      advisory services to more than 50 registered investment companies. The principal
      business address of FAM is 800 Scudders Mill Road, Plainsboro, New Jersey
      08536.</font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund &#145;s
Investment Advisory Agreement with FAM provides that, subject to  the supervision of the
Board of Directors of the Fund, FAM is responsible for  the actual management of the Fund&#146;s
portfolio. The responsibility for making  decisions to buy, sell or hold a particular
security for each Fund rests with  FAM, subject to review by the Board of Directors of
that Fund.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FAM provides the
portfolio management for each Fund. Such portfolio management  considers analyses from
various sources (including brokerage firms with which  each Fund does business), makes the
necessary investment decisions, and places  orders for transactions accordingly. FAM also
is responsible for the performance  of certain administrative and management services for
each Fund.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the services
provided by FAM under each Fund&#146;s Investment Advisory  Agreement, each Fund pays a
monthly fee at an annual rate of 0.50% of its  average weekly net assets plus the
proceeds of any outstanding borrowings used </font></td></tr></table>



<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 38</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<P><table width=600><tr><td><font size=2>for leverage (&#147;average weekly net assets&#148; means
the average weekly value of the  total assets of the Fund, including the amount obtained
from leverage and, with  respect to MuniYield Insured, any proceeds from the issuance of
preferred stock,  minus the sum of (i) accrued liabilities of the Fund, (ii) any accrued
and  unpaid interest on outstanding borrowings and (iii) accumulated dividends on  shares
of preferred stock). For purposes of this calculation, average weekly net  assets are
determined at the end of each month on the basis of the average net  assets of each Fund
for each week during the month. The assets for each weekly  period are determined by
averaging the net assets at the last business day of a  week with the net assets at the
last business day of the prior week.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;After the
Reorganization, the Combined Fund will pay FAM a monthly fee at the  annual rate of 0.50%
of its average weekly net assets (including proceeds from  the issuance of AMPS) plus the
proceeds of any outstanding borrowings used for  leverage as described above.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund&#146;s
investment advisory agreement obligates FAM to provide investment  advisory services and
to pay all compensation of and furnish office space for  officers and employees of the
Fund connected with investment and economic  research, trading and investment management
of the Fund, as well as the  compensation of all Directors of the Fund who are affiliated
persons of FAM or  any of its affiliates. Each Fund pays all other expenses incurred in
the  operation of the Fund, including, among other things, expenses for legal and
auditing services, listing fees, taxes, costs of printing proxies, stock  certificates
and stockholder reports, charges of the custodian and the transfer  agent, dividend
disbursing agent and registrar, fees and expenses with respect  to the issuance of AMPS
(for MuniYield Insured), Commission fees, fees and  expenses of unaffiliated Directors,
accounting and pricing costs, insurance,  interest, brokerage costs, litigation and other
extraordinary or non-recurring  expenses, mailing and other expenses properly payable by
the Fund. FAM provides  certain accounting services to each Fund, and each Fund
reimburses FAM for its  respective costs in connection with such services.</font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the fiscal years ended
      October 31, 2003, 2002 and 2001, the fees paid by MuniYield Insured to FAM
      pursuant to its Investment Advisory Agreement were $7,001,333, $6,842,401,
      and $6,777,547, respectively (such fees based on average weekly net assets
      of approximately $1.4 billion, $1.4 billion and $1.4 billion, respectively).
      MuniYield Insured was reimbursed $33,171 and $18,726 in 2003 and 2002 in
      connection with certain investment advisory fees paid for its investments
      in affiliated money market funds. For the fiscal years ended September 30,
      2003, 2002 and 2001, the fees paid by MuniInsured to FAM pursuant to its
      Investment Advisory Agreement were $397,725, $392,838 and $386,415, respectively
      (such fees based on average weekly net assets of approximately $79.6 million,
      $78.5 million and $77.4 million, respectively).</font></td>
  </tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless earlier terminated as
      described below, the investment advisory agreement between each Fund and
      FAM will continue from year to year if approved annually (a) by the Board
      of Directors of the Fund or by a majority of the outstanding shares of the
      Fund&#146;s common stock and AMPS, voting together as a single class, and
      (b) by a majority of the Directors of the Fund who are not parties to such
      contract or &#147;interested persons,&#148; as defined in the Investment
      Company Act, of any such party. The contract is not assignable and it may
      be terminated without penalty on 60 days&#146; written notice at the option
      of either party thereto or by the vote of the stockholders of the Fund.</font></td>
  </tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i>Accounting Services.</i>
      Each Fund entered into a separate agreement with State Street, pursuant
      to which State Street provides certain accounting services to each Fund.
      Each Fund pays a fee for these services. FAM also provides certain accounting
      services to each Fund and each Fund reimburses FAM for these services. </font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The table below
shows the amounts paid by each Fund to State Street and to FAM  for accounting services
the periods indicated.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MuniYield
Insured</i></font></td></tr></table>

<br>
<table border=0 cellspacing=0 cellpadding=0 width="600">
  <tr valign="bottom" align="center">
    <td align="left" width=285> <font size="1"><b>Fiscal Year ended October 31,</b></font>
      <hr size="1" noshade align="left" width="50%">
    </td>
    <td colspan="2"> <font size="1"><b>Paid to State Street</b></font>
      <hr size="1" noshade align="center" width="50%">
    </td>
    <td width=121> <font size="1"><b>Paid to FAM</b></font>
      <hr size="1" noshade align="center" width="65%">
    </td>
  </tr>
  <tr valign="bottom">
    <td height="16" width=285> <font size="2">2003 </font></td>
    <td align="right" height="16" width=122> <font size="2">$314,092</font></td>
    <td height="16" width=72>&nbsp;</td>
    <td align="center" height="16" width=121> <font size="2">$32,712</font></td>
  </tr>
  <tr valign="bottom">
    <td width=285> <font size="2">2002 </font></td>
    <td align="right" width=122> <font size="2">$321,681</font></td>
    <td width=72>&nbsp;</td>
    <td align="center" width=121> <font size="2">$37,893</font></td>
  </tr>
  <tr valign="bottom">
    <td width=285> <font size="2">2001 </font></td>
    <td align="right" width=122> <font size="2">$313,440</font></td>
    <td width=72><font size="2"><sup>*</sup></font></td>
    <td align="center" width=121> <font size="2">$70,199</font></td>
  </tr>
</table>
<br>
<br>
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 39</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<p><table width=600><tr><td><font size=2><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MuniInsured</i></font></td></tr></table>

<br>
<table border=0 cellspacing=0 cellpadding=0 width="600">
  <tr valign="bottom" align="center">
    <td align="left" width=297> <b><font size="1">Fiscal Year Ended September
      30,</font></b>
      <hr size="1" noshade align="left" width="50%">
    </td>
    <td colspan="2"> <b><font size="1">Paid to State Street</font></b>
      <hr size="1" noshade align="center" width="50%">
    </td>
    <td width=116> <b><font size="1">Paid to FAM</font></b>
      <hr size="1" noshade align="center" width="65%">
    </td>
  </tr>
  <tr valign="bottom">
    <td width=297> <font size="2">2003 </font></td>
    <td align="right" width=114> <font size="2">$40,493</font></td>
    <td width=73>&nbsp;</td>
    <td align="center" width=116> <font size="2">$&nbsp;&nbsp;1,730</font></td>
  </tr>
  <tr valign="bottom">
    <td width=297> <font size="2">2002 </font></td>
    <td align="right" width=114> <font size="2">$40,223</font></td>
    <td width=73>&nbsp;</td>
    <td align="center" width=116> <font size="2">$&nbsp;&nbsp;4.405</font></td>
  </tr>
  <tr valign="bottom">
    <td width=297> <font size="2">2001 </font></td>
    <td align="right" width=114> <font size="2">$37,497</font></td>
    <td width=73><font size="2"><sup>*</sup></font></td>
    <td align="center" width=116> <font size="2">$26,115</font></td>
  </tr>
</table>
<br>
<table width=600>
  <tr>
    <td width=4% align=right valign=top><font size="1">* </font></td>
    <td width=2%><font size="1"></font></td>
    <td width=94%><font size="1">Represents payments pursuant to the agreement
      with State Street commencing January 1, 2001. </font></td>
  </tr>
</table>
<p><table width=600><tr><td><font size=2><B>Code of Ethics</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of
Directors of each Fund has approved the same Code of Ethics under  Rule 17j-l of the
Investment Company Act that covers the Funds and FAM. The Code  of Ethics establishes
procedures for personal investing and restricts certain  transactions. Employees subject
to the Code of Ethics may invest in securities  for their personal investment accounts,
including securities that may be  purchased or held by each Fund.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>Voting Rights</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Voting rights are
identical for the holders of shares of each Fund&#146;s common  stock. Holders of each
Fund&#146;s common stock are entitled to one vote for each  share held. MuniYield Insured
common stockholders will vote with the holders of  any outstanding shares of the Fund&#146;s
AMPS or other preferred stock on each  matter submitted to a vote of holders of common
stock, except as set forth  below.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as
otherwise indicated below, and except as otherwise required by  applicable law, holders
of shares of MuniYield Insured&#146;s AMPS will be entitled  to one vote per share on
each matter submitted to a vote of the Fund&#146;s  stockholders and will vote together
with the holders of shares of the Fund&#146;s  common stock as a single class.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The shares of each
Fund&#146;s common stock, MuniYield Insured&#146;s AMPS and any other  preferred stock do
not have cumulative voting rights, which means that the  holders of more than 50% of the
shares of a Fund&#146;s common stock, MuniYield  Insured&#146;s AMPS and any other
preferred stock voting for the election of  Directors can elect all of the Directors
standing for election by such holders,  and, in such event, the holders of the remaining
shares of a Fund&#146;s common  stock, AMPS and any other preferred stock, as applicable,
will not be able to  elect any of such Directors.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with
the election of MuniYield Insured&#146;s Directors, holders of  shares of the Fund&#146;s
AMPS, voting separately as a class, shall be entitled at  all times to elect two of the
Fund&#146;s Directors, and the remaining Directors will  be elected by holders of shares
of the Fund&#146;s common stock and shares of the  Fund&#146;s AMPS and any other
preferred stock, voting together as a single class. In  addition, if at any time
dividends on outstanding shares of MuniYield Insured&#146;s  AMPS shall be unpaid in an
amount equal to at least two full years&#146; dividends  thereon or if at any time
holders of any shares of the Fund&#146;s preferred stock  are entitled, together with the
holders of shares of the Fund&#146;s AMPS, to elect a  majority of the Directors of the
Fund under the Investment Company Act, then the  number of Directors constituting the
Board of Directors automatically shall be  increased by the smallest number that, when
added to the two Directors elected  exclusively by the holders of shares of AMPS and any
other preferred stock as  described above, would constitute a majority of the Board of
Directors as so  increased by such smallest number, and at a special meeting of
stockholders  which will be called and held as soon as practicable, and at all subsequent
meetings at which Directors are to be elected, the holders of shares of  MuniYield Insured&#146;s
AMPS and any other preferred stock, voting separately as a  class, will be entitled to
elect the smallest number of additional Directors  that, together with the two Directors
which such holders in any event will be  entitled to elect, constitutes a majority of the
total number of Directors of  MuniYield Insured as so increased. The terms of office of
the persons who are  Directors at the time of that election will continue. If MuniYield
Insured  thereafter shall pay, or declare and set apart for payment in full, all
dividends payable on all outstanding shares of AMPS and any other preferred  stock for
all past dividend periods, the additional voting rights of the holders  of shares of AMPS
and any other preferred stock as described above shall cease,  and the terms of office of
all of the additional Directors elected by the  holders of shares of AMPS and any other
preferred stock (but not of the  Directors with respect to whose election the holders of
shares of common stock  were entitled to vote or the two Directors the holders of shares
of AMPS and any  other preferred stock have the right to elect in any event) will
terminate  automatically.</font></td></tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 40</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The affirmative
vote of the holders of a majority of the outstanding shares of  MuniYield Insured&#146;s
AMPS, voting as a separate class, will be required to (i)  authorize, create or issue, or
increase the authorized or issued amount of, any  class or series of stock ranking prior
to any series of preferred stock with  respect to payment of dividends or the
distribution of assets on liquidation,  (ii) amend, alter or repeal the provisions of the
Charter, whether by merger,  consolidation or otherwise, so as to adversely affect any of
the contract rights  expressly set forth in the Charter of holders of preferred stock,
(iii) approve  any plan of reorganization adversely affecting such AMPS or (iv) take any
action  to change a Fund&#146;s investment policies requiring a vote of stockholders
under  Section 13(a) of the Investment Company Act. Additionally, holders of each  series
of MuniYield Insured&#146;s AMPS will be required to vote in order for  MuniYield Insured
to issue any stock ranking on a parity with such series of  AMPS.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>Stockholder Inquiries</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stockholder
inquiries with respect to either Fund may be addressed to such Fund  by telephone at
(609) 282-2800 or at the address set forth on the cover page of  this Proxy Statement and
Prospectus.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>Dividends and Distributions</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Funds&#146; current
policies with respect to dividends and distributions relating  to shares of their common
stock are substantially similar. Each Fund intends to  distribute dividends equal to all
or a portion of its net investment income  monthly to holders of a Fund&#146;s common
stock. Monthly distributions to holders of  MuniInsured&#146;s common stock normally
consist of all or a portion of its net  investment income. Monthly distributions to
holders of MuniYield Insured&#146;s  common stock normally consist of all or a portion of
its net investment income  remaining after the payment of dividends (and any Additional
Distribution) on  the Fund&#146;s AMPS. Each Fund may at times pay out less than the
entire amount of  net investment income earned in any particular period and may at times
pay out  such accumulated undistributed income in addition to net investment income
earned in other periods in order to permit the Fund to maintain a more stable  level of
dividends to holders of common stock. As a result, the dividend paid by  a Fund to
holders of its common stock for any particular period may be more or  less than the
amount of net investment income earned by the Fund during such  period. For Federal tax
purposes, each Fund is required to distribute  substantially all of its net investment
income for each year. All net realized  long term or short term capital gains, if any,
are distributed pro rata at least  annually to holders of shares of a Fund&#146;s common
stock and, for MuniYield  Insured, AMPS. While any shares of MuniYield Insured&#146;s
AMPS are outstanding, the  Fund may not declare any cash dividend or other distribution
on the Fund&#146;s  common stock, unless at the time of such declaration (1) all
accumulated  dividends on the Fund&#146;s AMPS, including any Additional Distribution,
have been  paid, and (2) the net asset value of the Fund&#146;s portfolio (determined
after  deducting the amount of such dividend or other distribution) is at least 200% of
the liquidation value of the Fund&#146;s outstanding shares of AMPS. If a Fund&#146;s
ability to make distributions on its common stock is limited, such limitation  could
under certain circumstances impair the ability of the Fund to maintain its  qualification
under Federal income tax law for taxation as a regulated  investment company, which would
have adverse tax consequences for stockholders.  See &#147;Comparison of the Funds &#151; Tax
Rules Applicable to the Funds and their  Stockholders.&#148;</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The holders of
shares of MuniYield Insured&#146;s AMPS are entitled to receive, when,  as and if
declared by the Board of Directors of the Fund, out of funds legally  available therefor,
cumulative cash dividends on their shares. Dividends on  MuniYield Insured&#146;s AMPS so
declared and payable shall be paid (i) in preference  to and in priority over any
dividends so declared and payable on the Fund&#146;s  common stock, and (ii) to the
extent permitted under the Code and to the extent  available, out of net tax-exempt
income earned on the Fund&#146;s investments.  Dividends for MuniYield Insured&#146;s
AMPS are paid through The Depository Trust  Company (&#147;DTC&#148;) (or a successor
securities depository) on each dividend payment  date. DTC&#146;s normal procedures now
provide for it to distribute dividends in  same-day funds to agent members, who in turn
are expected to distribute such  dividends to the person for whom they are acting as
agent in accordance with the  instructions of such person. Prior to each dividend payment
date, MuniYield  Insured is required to deposit with the Auction Agent sufficient funds
for the  payment of such declared dividends. MuniYield Insured intends to establish any
reserves for the payment of dividends, and no interest will be payable in  respect of any
dividend payment or payment on the shares of the Fund&#146;s AMPS  which may be in
arrears.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dividends paid by
each Fund, to the extent paid from tax-exempt income earned on  Municipal Bonds, are
exempt from Federal income taxes, subject to the possible  application of the Federal
alternative minimum tax. However, MuniYield Insured  is required to allocate net capital
gains and other income subject to regular  Federal income taxes, </font></td></tr></table>


<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 41</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<P><table width=600><tr><td><font size=2>if any, proportionately  among shares of its
common stock  and shares of each series of its AMPS in accordance  with the current
position of  the IRS described herein. See &#147;Tax Rules Applicable to  the Funds and
their  Stockholders&#148; below. MuniYield Insured notifies the Auction  Agent of the
amount  of any net capital gains or other taxable income to be included in  any dividend
on shares of a series of AMPS prior to the auction establishing the  applicable  rate for
such dividend. The Auction Agent in turn notifies each broker-dealer  whenever it
receives any such notice from the Fund, and each broker-dealer then  notifies  its
customers who are holders of that series of the Fund&#146;s AMPS.  MuniYield Insured
also may include such income in a dividend on shares of its  AMPS without giving advance
notice thereof if it increases the dividend by an  additional amount to offset the tax
effect thereof. The amount of taxable income  allocable to shares of MuniYield Insured&#146;s
AMPS will depend upon the amount of  such income realized by the Fund and other factors,
but generally is not  expected to be significant.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For information
concerning the manner in which dividends and distributions to  holders of each Fund&#146;s
common stock may be reinvested automatically in shares of  the Fund&#146;s common stock,
see &#147;Automatic Dividend Reinvestment Plan&#148; below.  Dividends and distributions
will be subject to the tax treatment discussed  below, whether they are reinvested in
shares of a Fund or received in cash.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If MuniYield
Insured retroactively allocates any net capital gains or other  income subject to regular
Federal income taxes to shares of its AMPS without  having given advance notice thereof
as described above, which only may happen  when such allocation is made as a result of
the redemption of all or a portion  of its outstanding AMPS or the liquidation of the
Fund, the Fund will make  certain payments to holders of its AMPS to which such
allocation was made to  offset substantially the tax effect thereof. In no other
instances will the Fund  be required to make payments to holders of its AMPS to offset
the tax effect of  any reallocation of net capital gains or other taxable income.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>Automatic Dividend Reinvestment Plan</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to each
Fund&#146;s Automatic Dividend Reinvestment Plan (each, a &#147;Plan&#148;),  unless a
holder of a Fund&#146;s common stock elects otherwise, all dividend and  capital gains
distributions are automatically reinvested by Equiserve, as agent  for each Fund&#146;s
common stockholders, in additional shares of a Fund&#146;s common  stock. Equiserve will
continue to be the Plan Agent for the Combined Fund after  the Reorganization. Holders of
a Fund&#146;s common stock who elect not to  participate in the Plan receive all
distributions in cash paid by check mailed  directly to the stockholder of record (or, if
the shares are held in street or  other nominee name, then to such nominee) by Equiserve,
as dividend paying  agent. Such stockholders may elect not to participate in a Plan and
to receive  all distributions of dividends and capital gains in cash by sending written
instructions to Equiserve, as dividend paying agent, at the address set forth  below.
Participation in each Plan is completely voluntary and may be terminated  or resumed at
any time without penalty by written notice if received by the Plan  Agent not less than
ten days prior to any dividend record date; otherwise, such  termination or resumption
will be effective with respect to any subsequently  declared dividend or capital gains
distribution.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Whenever a Fund
declares any dividend payable either in shares or in cash,  non-participants in a Plan
receive cash, and participants in the Plan receive  the equivalent in shares of the Fund&#146;s
common stock. The shares are acquired by  the Plan Agent for the participant&#146;s
account, depending upon the circumstances  described below, either (i) through receipt of
additional unissued but  authorized shares of the Fund&#146;s common stock from the Fund (&#147;newly
issued  shares&#148;) or (ii) by purchase of outstanding shares of the Fund&#146;s common
stock in  the open market (&#147;open-market purchases&#148;), on the NYSE, AMEX or
elsewhere. If on  the payment date for the dividend the net asset value per share of the
Fund&#146;s  common stock is equal to or less than the market price per share of the Fund&#146;s
common stock plus estimated brokerage commissions (such condition being referred  to
herein as &#147;market premium&#148;), the Plan Agent invests the dividend amount in
newly issued shares on behalf of the participant. The number of newly issued  shares of
the Fund&#146;s common stock to be credited to the participant&#146;s account is
determined by dividing the dollar amount of the dividend by the net asset value  per
share on the date the shares are issued, provided that the maximum discount  from the
then-current market price per share on the date of issuance may not  exceed 5%. If on the
dividend payment date, the net asset value per share is  greater than the market value
(such condition being referred to herein as  &#147;market discount&#148;), the Plan Agent
invests the dividend amount in shares  acquired on behalf of the participant in
open-market purchases.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event of a
market discount on the dividend payment date, the Plan Agent  has until the last business
day before the next date on which the shares trade  on an &#147;ex-dividend&#148; basis
or in no event more than 30 days after the </font></td></tr></table>


<p>&nbsp;
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    <td width=480 align=center><font size="2"> 42</font></td>
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<P><table width=600><tr><td><font size=2>dividend  payment date (the &#147;last  purchase
date&#148;) to invest the dividend amount in shares  acquired in open-market  purchases.
Each Fund intends to pay monthly income  dividends. Therefore, the period  during which
open-market purchases can be made  exists only from the payment date on the  dividend
through the date before the  next &#147;ex-dividend&#148; date, which typically  is
approximately ten days. If, before  the Plan Agent has completed its open-market
purchases, the market price of a  share of a Fund&#146;s common stock exceeds the net
asset value per share, the  average per share purchase price paid by the Plan Agent may
exceed the net asset  value of the Fund&#146;s shares, resulting in the acquisition of
fewer shares than if  the dividend had been paid in newly issued shares on the dividend
payment date.  Because of the foregoing difficulty with respect to open-market purchases,
each  Plan provides that if the Plan Agent is unable to invest the full dividend  amount
in open-market purchases during the purchase period or if the market  discount shifts to
a market premium during the purchase period, the Plan Agent  ceases making open-market
purchases and invests the uninvested portion of the  dividend amount in newly issued
shares at the close of business on the last  purchase date.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Plan Agent
maintains all stockholders&#146; accounts in a Plan and furnishes  written confirmation
of all transactions in the account, including information  needed by stockholders for tax
records. Shares in the account of each Plan  participant are held by the Plan Agent in
non-certificated form in the name of  the participant, and each stockholder&#146;s proxy
includes those shares purchased or  received pursuant to a Plan. The Plan Agent will
forward all proxy solicitation  materials to participants and vote proxies for shares
held pursuant to a Plan in  accordance with the instructions of the participants.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the case of
stockholders such as banks, brokers or nominees which hold shares  for others who are the
beneficial owners, the Plan Agent will administer a Plan  on the basis of the number of
shares certified from time to time by the record  stockholders as representing the total
amount registered in the record  stockholder&#146;s name and held for the account of
beneficial owners who are to  participate in that Plan.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There are no
brokerage charges with respect to shares issued directly by either  Fund as a result of
dividends or capital gains distributions payable either in  shares or in cash. However,
each participant pays a pro rata share of brokerage  commissions incurred with respect to
the Plan Agent&#146;s open-market purchases in  connection with the reinvestment of
dividends.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The automatic
reinvestment of dividends and distributions does not relieve  participants of any
Federal, state or local income tax that may be payable (or  required to be withheld) on
such dividends. See &#147;Comparison of the Funds &#151; Tax  Rules Applicable to the
Funds and their Stockholders.&#148;</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stockholders
participating in a Plan may receive benefits not available to  stockholders not
participating in a Plan. If the market price (plus commissions)  of a Fund&#146;s shares
of common stock is higher than the net asset value of such  shares, participants in a
Plan receive shares of the Fund&#146;s common stock at less  than they otherwise could
purchase them and have shares with a cash value  greater than the value of any cash
distribution they would have received on  their shares. If the market price plus
commissions is lower than the net asset  value of such shares, participants receive
distributions of shares with a net  asset value greater than the value of any cash
distribution they would have  received on their shares. However, there may be
insufficient shares available in  the market to make distributions of shares at prices
below the net asset value.  Also, since the Funds normally do not redeem their shares,
the price on resale  may be more or less than the net asset value. See &#147;Comparison
of the Funds &#151; Tax Rules Applicable to the Funds and their Stockholders&#148; for a
discussion of  certain tax consequences of each fund&#146;s Plan.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund reserves
the right to amend or terminate its Plan. There is no direct  service charge to
participants in a Plan; however, each Fund reserves the right  to amend its Plan to
include a service charge payable by the participants.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;After the
Reorganization, a holder of shares of MuniInsured who has elected to  receive dividends
in cash will continue to receive dividends in cash; all other  holders will have their
dividends automatically reinvested in shares of the  Combined Fund. However, if a
stockholder owns shares in MuniInsured and in  MuniYield Insured, after the
Reorganization, the stockholder&#146;s election with  respect to the dividends of
MuniYield Insured will control unless the  stockholder specifically elects a different
option at that time. Following the  Reorganization, all correspondence should be directed
to the Plan Agent of  MuniYield Insured, Equiserve Trust Company, I.A., at P.O. Box
43011, Providence,  Rhode Island 02940-3011.</font></td></tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 43</font></td>
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<p><table width=600><tr><td><font size=2><B>Mutual Fund Investment Option</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A holder of common
stock of either Fund, who purchased his or her shares through  Merrill Lynch in either
Fund&#146;s initial public offering, has the right to  reinvest the net proceeds from a
sale of such shares in Class I shares of  certain Merrill Lynch-sponsored open-end funds
without the imposition of an  initial sales charge, if certain conditions are satisfied.
A holder of  MuniInsured Common Stock who qualifies for this option will have the same
option  with respect to the shares of MuniYield Insured Common Stock received in the
Reorganization.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>Liquidation Rights of Holders of AMPS</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon any
liquidation, dissolution or winding up of MuniYield Insured, whether  voluntary or
involuntary, the holders of MuniYield Insured AMPS will be entitled  to receive, out of
the assets of the Fund available for distribution to  stockholders, before any
distribution or payment is made upon any shares of the  Fund&#146;s common stock or any
other capital stock of the Fund ranking junior in  right of payment upon liquidation to
AMPS, $25,000 per share together with the  amount of any dividends accumulated but unpaid
(whether or not earned or  declared) thereon to the date of distribution, and after such
payment the  holders of AMPS will be entitled to no other payments except for any
additional  dividends. If such assets of MuniYield Insured shall be insufficient to make
the  full liquidation payment on the AMPS and liquidation payments on any other
outstanding class or series of preferred stock of the Fund ranking on a parity  with the
AMPS as to payment upon liquidation, then such assets will be  distributed among the
holders of shares of AMPS and the holders of shares of  such other class or series
ratably in proportion to the respective preferential  amounts to which they are entitled.
After payment of the full amount of  liquidation distribution to which they are entitled,
the holders of shares of  MuniYield Insured&#146;s AMPS will not be entitled to any
further participation in  any distribution of assets by the Fund except for any
additional dividends. A  consolidation, merger or share exchange of MuniYield Insured
with or into any  other entity or entities or a sale, whether for cash, shares of stock,
securities or properties, of all or substantially all or any part of the assets  of the
Fund shall not be deemed or construed to be a liquidation, dissolution or  winding up of
the Fund for this purpose.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>Tax Rules Applicable to the Funds and their
Stockholders</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The tax
consequences of investing in shares of common stock of each Fund are  identical. The
Funds have elected and qualified since inception for the special  tax treatment afforded
RICs under the Code. MuniYield Insured intends to  continue to so qualify after the
Reorganization. As a result, in any taxable  year in which they distribute an amount
equal to at least 90% of taxable net  income and 90% of tax-exempt net income (see
below), the Funds (but not their  stockholders) are not subject to Federal income tax to
the extent that they  distribute their net investment income and net realized capital
gains. In all  taxable years through the taxable year of the Reorganization, each Fund
has  distributed substantially all of its income. MuniYield Insured intends to  continue
to distribute substantially all of its income following the  Reorganization. If, in any
taxable year, a Fund were to fail to qualify as a RIC  under the Code, such Fund would be
taxed in the same manner as an ordinary  corporation and all distributions from earnings
and profits to its shareholders  would be taxable as ordinary income, whether or not
derived from interest on  tax-exempt obligations.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund is
qualified to pay &#147;exempt-interest dividends&#148; as defined in Section  852(b)(5)
of the Code. Under such section, if, at the close of each quarter of  its taxable year,
at least 50% of the value of a Fund&#146;s total assets consists of  obligations exempt
from Federal income tax (&#147;tax-exempt obligations&#148;) under  Section 103(a) of the
Code (relating generally to obligations of a state or  local governmental unit), the Fund
is qualified to pay exempt-interest dividends  to its stockholders. Exempt-interest
dividends are dividends or any part thereof  paid by a Fund which are attributable to
interest on tax-exempt obligations and  designated by a Fund as exempt-interest dividends
in a written notice mailed to  stockholders within 60 days after the close of its taxable
year. To the extent  that the dividends distributed to a Fund&#146;s stockholders are
derived from  interest income exempt from Federal income tax under Code Section 103(a)
and are  properly designated as exempt-interest dividends, they are excludable from a
stockholder&#146;s gross income for Federal income tax purposes. Exempt-interest
dividends are included, however, in determining the portion, if any, of a  person&#146;s
social security benefits and railroad retirement benefits subject to  Federal income
taxes. A tax adviser should be consulted with respect to whether  exempt-interest
dividends retain the exclusion under Code Section 103(a) if a  stockholder would be
treated as a &#147;substantial user&#148; or &#147;related person&#148; under  Code
Section 147(a) with respect to property financed with the proceeds from an  issue of
&#147;industrial development bonds&#148; or &#147;private activity bonds,&#148; if any,
held by a Fund.</font></td></tr></table>


<p>&nbsp;
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<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The IRS, in a
revenue ruling, held that certain AMPS would be treated as stock  for Federal income tax
purposes. The terms of the currently outstanding series  of AMPS of MuniYield Insured are
substantially similar, but not identical, to  the AMPS discussed in the revenue ruling.
In the opinion of Sidley Austin Brown  &amp; Wood LLP, counsel to each Fund, the shares
of MuniYield Insured&#146;s currently  outstanding AMPS constitute stock, and
distributions with respect to shares of  such AMPS (other than distributions in
redemption of shares of AMPS subject to  Section 302(b) of the Code) will constitute
dividends to the extent of current  and accumulated earnings and profits as calculated
for Federal income tax  purposes. Nevertheless, the IRS could take a contrary position,
asserting, for  example, that the shares of AMPS constitute debt. If this position were
upheld,  the discussion of the treatment of distributions below would not apply to
holders of shares of AMPS. Instead, distributions by MuniYield Insured to  holders of
shares of its AMPS would constitute interest, whether or not they  exceed the earnings
and profits of the Fund, would be included in full in the  income of the recipient and
taxed as ordinary income. Counsel believes that such  a position, if asserted by the IRS,
would be unlikely to prevail.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To the extent that
a Fund&#146;s distributions are derived from interest on its  taxable investments or from
an excess of net short term capital gains over net  long term capital losses (&#147;ordinary
income dividends&#148;), such distributions are  considered taxable ordinary income for
Federal income tax purposes.  Distributions, if any, from an excess of net long term
capital gains over net  short term capital losses derived from the sale of securities or
from certain  transactions in futures or options (&#147;capital gain dividends&#148;) are
taxable as  long term capital gains for Federal income tax purposes, regardless of the
length of time the stockholder has owned Fund shares. Recently enacted  legislation
reduces the tax rate on certain dividend income and long-term  capital gain applicable to
individuals. However, to the extent a Fund&#146;s  distributions are derived from income
on debt securities and short term capital  gain, the Fund&#146;s distributions will not
be eligible for this reduced dividend  tax rate. Distributions by a Fund, whether from
exempt-interest income, ordinary  income or capital gains, are not eligible for the
dividends received deduction  for corporations under the Code. Generally not later than
60 days after the  close of its taxable year, each Fund provides its stockholders with a
written  notice designating the amounts of any exempt-interest dividends and capital gain
dividends.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A loss realized on
a sale or exchange of shares of a Fund is disallowed if  other Fund shares are acquired
(whether under a Fund&#146;s Plan or otherwise) within  a 61-day period beginning 30 days
before and ending 30 days after the date that  the shares are disposed of. In such a
case, the basis of the shares acquired  will be adjusted to reflect the disallowed loss.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All or a portion
of a Fund&#146;s gain from the sale or redemption of tax-exempt  obligations purchased at
a market discount will be treated as ordinary income  rather than capital gain. This rule
may increase the amount of ordinary income  dividends received by stockholders. Any loss
upon the sale or exchange of Fund  shares held for six months or less is treated as long
term capital loss to the  extent of capital gain dividends received by the stockholder.
In addition, such  loss is disallowed to the extent of any exempt-interest dividends
received by  the stockholder. Distributions in excess of a Fund&#146;s earnings and
profits first  will reduce the adjusted tax basis of a holder&#146;s shares and, after
such adjusted  tax basis is reduced to zero, will constitute capital gains to such holder
(assuming the shares are held as a capital asset). If a Fund pays a dividend in  January
which was declared in the previous October, November or December to  stockholders of
record on a specified date in one of such months, then such  dividend is treated for tax
purposes as paid by the Fund and received by its  stockholders on December 31 of the year
in which such dividend was declared.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The IRS has taken
the position in a revenue ruling that if a RIC has two or more  classes of shares it may
designate distributions made to each class in any year  as consisting of no more than
such class&#146; proportionate share of particular  types of income, including
exempt-interest dividends and capital gain dividends.  A class&#146;s proportionate share
of a particular type of income is determined  according to the percentage of total
dividends paid by the RIC during such year  that was paid to such class. Consequently,
when common stock and one or more  series of AMPS are outstanding, MuniYield Insured
intends to designate  distributions made to the classes as consisting of particular types
of income in  accordance with each class&#146;s proportionate share of such income. After
the  Reorganization, MuniYield Insured will, likewise, so designate distributions  with
respect to its common stock and its series of AMPS. MuniYield Insured may  notify the
Auction Agent of the amount of any net capital gains and other  taxable income to be
included in any dividend on shares of a series of its AMPS  prior to the auction
establishing the applicable rate for such dividend. Except  for the portion of any
dividend that MuniYield Insured informs the Auction Agent  will be treated as capital
gains or other taxable income, the dividends paid on  the shares of AMPS </font></td></tr></table>


<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 45</font></td>
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<P><table width=600><tr><td><font size=2>constitute  exempt-interest dividends.
Alternatively,  MuniYield Insured may include such income in a  dividend on shares of its
AMPS  without giving advance notice thereof if it increases the  dividend by an
additional amount to offset the tax effect thereof. The amount of net  capital  gains and
ordinary income allocable to shares of MuniYield Insured&#146;s AMPS  (the  &#147;taxable
distribution&#148;) depends upon the amount of such gains and income  realized by the
Fund and the total dividends paid by the Fund on shares of its  common  stock and shares
of its AMPS during a taxable year, but the taxable  distribution  generally is not
significant.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the opinion of
Sidley Austin Brown &amp; Wood LLP, counsel to each Fund, under  current law the manner
in which MuniYield Insured allocates items of tax-exempt  income, net capital gains, and
other taxable income, if any, among shares of  common stock and outstanding AMPS will be
respected for Federal income tax  purposes. However, the tax treatment of additional
dividends may affect  MuniYield Insured&#146;s calculation of each class&#146; allocable
share of capital gains  and other taxable income. In addition, there is currently no
direct guidance  from the IRS or other sources specifically addressing whether MuniYield
Insured&#146;s method for allocating tax-exempt income, net capital gains and other
taxable income among shares of common stock and the outstanding series of AMPS  will be
respected for Federal income tax purposes, and it is possible that the  IRS could
disagree with counsel&#146;s opinion and attempt to reallocate the Fund&#146;s  net
capital gains or other taxable income. In the event of a reallocation, some  of the
dividends identified by MuniYield Insured as exempt-interest dividends to  holders of
shares of its AMPS could be recharacterized as additional capital  gains or other taxable
income. In the event of such recharacterization,  MuniYield Insured is not required to
make payments to the affected stockholders  to offset the tax effect of such
reallocation. In addition, a reallocation could  cause MuniYield Insured to be liable for
income tax and excise tax on all  reallocated taxable income. Sidley Austin Brown &amp; Wood
LLP has advised MuniYield  Insured that, in its opinion, if the IRS were to challenge in
court the Fund&#146;s  allocations of income and gain, the IRS would be unlikely to
prevail. The  opinion of Sidley Austin Brown &amp; Wood LLP, however, represents only its
best  legal judgment and is not binding on the IRS or the courts.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Code requires
a RIC to pay a nondeductible 4% excise tax to the extent it  does not distribute during
each calendar year 98% of its ordinary income,  determined on a calendar year basis, and
98% of its capital gains, determined in  general, on an October 31 year-end, plus certain
undistributed amounts from  previous years. The required distributions, however, are
based only on the  taxable income of a RIC. The excise tax, therefore, generally does not
apply to  the tax-exempt income of RICs, such as the Funds, that pay exempt-interest
dividends.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Code subjects
interest received on certain otherwise tax-exempt securities  to a Federal alternative
minimum tax. The alternative minimum tax applies to  interest received on &#147;private
activity bonds&#148; issued after August 7, 1986.  &#147;Private activity bonds&#148; are
bonds which, although tax-exempt, are used for  purposes other than those generally
performed by governmental units and which  benefit non-governmental entities (e.g., bonds
used for industrial development  or housing purposes). Income received on such bonds is
classified as an item of  &#147;tax preference&#148; which could subject investors in
such bonds, including  stockholders of the Funds, to an increased Federal alternative
minimum tax. Each  Fund purchases such &#147;private activity bonds&#148; and reports to
stockholders within  60 days after calendar year-end the portion of its dividends
declared during the  year which constitutes an item of tax preference for alternative
minimum tax  purposes. The Code further provides that corporations are subject to a
Federal  alternative minimum tax based, in part, on certain differences between taxable
income as adjusted for other tax preferences and the corporation&#146;s &#147;adjusted
current earnings&#148; which more closely reflect a corporation&#146;s economic income.
Because an exempt-interest dividend paid by a Fund is included in adjusted  current
earnings, a corporate stockholder may be required to pay a Federal  alternative minimum
tax on exempt-interest dividends paid by such Fund.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Funds may
invest in instruments the return on which includes nontraditional  features such as
indexed principal or interest payments (&#147;nontraditional  instruments&#148;). These
instruments may be subject to special tax rules under which  a Fund may be required to
accrue and distribute income before amounts due under  the obligations are paid. In
addition, it is possible that all or a portion of  the interest payments on such
nontraditional instruments could be  recharacterized as taxable ordinary income.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If at any time
when shares of MuniYield Insured AMPS are outstanding, the Fund  does not meet the asset
coverage requirements of the Investment Company Act, the  Fund will be required to
suspend distributions to holders of common stock until  the asset coverage is restored.
See &#147;Dividends and Distributions.&#148; This may  prevent MuniYield Insured from
distributing at least 90% of its net investment  income and may, therefore, jeopardize
the Fund&#146;s </font></td></tr></table>


<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 46</font></td>
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<P><table width=600><tr><td><font size=2>qualification for taxation as a  RIC. If
MuniYield Insured were to fail  to qualify as a RIC, some or all of the  distributions
paid by the Fund would be fully  taxable to stockholders for  Federal income tax
purposes. Upon any failure to meet the  asset coverage  requirements of the Investment
Company Act, MuniYield Insured, in its  sole  discretion, may redeem shares of AMPS in
order to maintain or restore the  requisite asset coverage and avoid the adverse
consequences to the Fund and its  stockholders of failing to qualify as a RIC. No
assurance can be given, however,  that  any such action would achieve such objectives.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As noted above,
each Fund must distribute annually at least 90% of its net  taxable and tax-exempt
interest income. A distribution will only be counted for  this purpose if it qualifies
for the dividends paid deduction under the Code.  Some types of preferred stock that
MuniYield Insured has issued and that the  Combined Fund may issue may raise a question
as to whether distributions on such  preferred stock are &#147;preferential&#148; under
the Code and, therefore, not eligible  for the dividends paid deduction. Counsel has
advised MuniYield Insured that the  outstanding preferred stock issued by MuniYield
Insured will not result in the  payment of a preferential dividend. If MuniYield Insured
ultimately relies  solely on a legal opinion when it issues such preferred stock, no
assurance can  be given that the IRS would agree that dividends on the preferred stock
are not  preferential. If the IRS successfully disallowed the dividends paid deduction
for dividends MuniYield Insured paid on the preferred stock, the Fund could be
disqualified as RICs. In this case, dividends paid by MuniYield Insured on the  common
stock and the AMPS would not be exempt from Federal income tax.  Additionally, MuniYield
Insured would be subject to a Federal alternative  minimum tax.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under certain
circumstances when MuniYield Insured is required to allocate  taxable income to the AMPS,
it will pay Additional Distributions to holders of  shares of AMPS. The Federal income
tax consequences of Additional Distributions  under existing law are uncertain. MuniYield
Insured treats and intends to  continue to treat a holder as receiving a dividend
distribution in the amount of  any Additional Distribution only as and when such
Additional Distribution is  paid. An Additional Distribution generally is designated by
MuniYield Insured as  an exempt-interest dividend except as otherwise required by
applicable law.  However, the IRS may assert that all or part of an Additional
Distribution is a  taxable dividend either in the taxable year for which the allocation
of taxable  income is made or in the taxable year in which the Additional Distribution is
paid.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The value of
shares acquired pursuant to each Fund&#146;s Plan is generally excluded  from gross
income to the extent that the cash amount reinvested would be  excluded from gross
income. If, when a Fund&#146;s shares are trading at a premium  over net asset value, the
Fund issues shares pursuant to the Plan that have a  greater fair market value than the
amount of cash reinvested, it is possible  that all or a portion of such discount (which
may not exceed 5% of the fair  market value of the Fund&#146;s shares) could be viewed as
a taxable distribution. If  the discount is viewed as a taxable distribution, it is also
possible that the  taxable character of this discount would be allocable to all of the
stockholders, including stockholders who do not participate in the Fund&#146;s Plan.
Thus, stockholders who do not participate in a Fund&#146;s Plan, as well as Plan
participants, might be required to report as ordinary income a portion of their
distributions equal to the allocable share of the discount.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under certain
provisions of the Code, some stockholders may be subject to a  withholding tax on certain
ordinary income dividends and on capital gain  dividends and redemption payments (&#147;backup
withholding&#148;). Generally,  stockholders subject to backup withholding will be those
for whom no taxpayer  identification number is on file with a Fund or who, to the Fund&#146;s
knowledge,  have furnished an incorrect number. When establishing an account, an investor
must certify under penalty of perjury that such number is correct and that such
stockholder is not otherwise subject to backup withholding.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ordinary income
dividends paid to stockholders who are nonresident aliens or  foreign entities are
subject to a 30% United States withholding tax under  existing provisions of the Code
applicable to foreign individuals and entities  unless a reduced rate of withholding or a
withholding exemption is provided  under applicable treaty law. Nonresident stockholders
are urged to consult their  own tax advisers concerning the applicability of the United
States withholding  tax.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Code provides
that every stockholder required to file a tax return must  include for information
purposes on such return the amount of exempt-interest  dividends received from all
sources (including the Funds) during the taxable  year.</font></td></tr></table>


<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 47</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The transactions
of the Funds are subject to special tax rules of the Code that  may, among other things,
(a) affect the character of gains and losses realized  (with capital gains generally
subject to tax at lower rates than ordinary  income), (b) disallow, suspend or otherwise
limit the allowance of certain  losses or deductions, and (c) accelerate the recognition
of income without a  corresponding receipt of cash (with which to make the necessary
distributions to  satisfy distribution requirements applicable to RICs). Operation of
these rules  could, therefore, affect the character, amount and timing of distributions
to  shareholders. Special tax rules also will require a Fund to mark to market  certain
types of positions in its portfolio (i.e., treat them as sold on the  last day of the
taxable year), and may result in the recognition of income  without a corresponding
receipt of cash. The Funds intend to monitor their  transactions, make appropriate tax
elections and make appropriate entries in  their books and records to lessen the effect
of these tax rules and avoid any  possible disqualification for the special treatment
afforded RIC&#146;s under the  Code.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The foregoing is a
general and abbreviated summary of the applicable provisions  of the Code and Treasury
regulations presently in effect. For the complete  provisions, reference should be made
to the pertinent Code sections, the  Treasury regulations promulgated thereunder. The
Code and the Treasury  regulation are subject to change by legislative, judicial or
administrative  action either prospectively or retroactively.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stockholders are
urged to consult their tax advisers regarding specific  questions as to Federal, foreign,
state or local tax consequences of an  investment in a Fund.</font></td></tr></table>

<p><table width=600><tr><td  align=center><font size=2><B>AGREEMENT AND PLAN OF
REORGANIZATION</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>General</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the
Agreement and Plan (attached hereto as Exhibit II), MuniYield Insured  will acquire
substantially all of the assets, and will assume substantially all  of the liabilities,
of MuniInsured, in exchange solely for shares of MuniYield  Insured Common Stock. The
shares of MuniYield Insured Common Stock issued to  MuniInsured will have an aggregate
net asset value equal to the aggregate net  asset value of the outstanding shares of
MuniInsured Common Stock (except that  cash will be paid in lieu of any fractional
shares) at the close of business on  the business day immediately prior to the date on
which the Reorganization  occurs. Upon receipt by MuniInsured of such shares, MuniInsured
will distribute  pro rata the shares of MuniYield Insured Common Stock (and cash in lieu
of  fractional shares, as applicable) to the holders of MuniInsured Common Stock in
exchange for their shares of MuniInsured Common Stock. As soon as practicable  after the
effective date of the Reorganization (the &#147;Closing Date&#148;), MuniInsured  will
file Articles of Dissolution with the State Department of Assessments and  Taxation of
Maryland (the &#147;Maryland Department&#148;) to effect the formal  dissolution of such
Fund, and will dissolve. Accordingly, as a result of the  Reorganization, each holder of
MuniInsured Common Stock will own shares of  MuniYield Insured Common Stock that (except
for cash payments received in lieu  of fractional shares) would have an aggregate net
asset value immediately after  the Closing Date equal to the aggregate net asset value of
that stockholder&#146;s  MuniInsured Common Stock immediately prior to the Closing Date.
Since MuniYield  Insured Common Stock would be issued at net asset value and the shares
of  MuniInsured Common Stock would be valued at net asset value for the purposes of  the
exchange, the holders of common stock of neither Fund will be diluted as a  result of the
Reorganization. However, as a result of the Reorganization, a  stockholder of either Fund
likely will hold a reduced percentage of ownership in  the Combined Fund after the
Reorganization than he or she did in either of the  constituent Funds.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>Procedure</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At meetings of the
Board of Directors of each Fund, the Directors of each Fund,  including all the Directors
who are not &#147;interested persons,&#148; as defined in the  Investment Company Act, of
each Fund, unanimously approved the Agreement and  Plan. The Board of MuniInsured also
approved the submission of the Agreement and  Plan to the stockholders of MuniInsured for
approval as described herein. In  addition, the Board of MuniYield Insured approved the
issuance of additional  shares of MuniYield Insured Common Stock in connection with the
Reorganization.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Boards of
Directors of the Funds considered numerous factors in arriving at  their determination to
approve the Agreement and Plan. Among these factors,  which are discussed in greater
detail elsewhere in this Proxy Statement </font></td></tr></table>


<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 48</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<P><table width=600><tr><td><font size=2>and  Prospectus, were the similarity of
investment objectives and policies of the  Funds, their use of substantially the same
management personnel, the size of the  Funds, the effect the Reorganization would have on
each Fund&#146;s operating  expenses (including and excluding leverage) and stockholder
services, whether or  not stockholders would be diluted as a result of the
Reorganization, the  expenses of the Reorganization that would be borne by the Funds and
the tax  consequences to stockholders including the fact that the Reorganization is
structured as a tax-free reorganization. The Boards of Directors also considered  the
possible risks of combining the Funds, and examined the relative mix of  type, purpose
and yield of the Fund&#146;s portfolios. The Boards also considered the  relative tax
positions of each Fund&#146;s portfolio.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of
such Board approvals, the Funds have jointly filed this Proxy  Statement and Prospectus
with the Commission soliciting the vote of the  stockholders of MuniInsured to approve
the Reorganization. If stockholders of  MuniInsured approve the Reorganization, the
Reorganization will take place as  soon as practicable after such approval, provided that
the Funds have obtained  prior to that time an opinion of counsel concerning the tax
consequences of the  Reorganization as set forth in the Agreement and Plan.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>The Board of  Directors of MuniInsured
recommends that the stockholders of MuniInsured approve the  Agreement and Plan.</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>Terms of the Agreement and Plan of
Reorganization</B></font></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>The following is a
summary of the significant terms of the Agreement and Plan. This summary is qualified in
its entirety by reference to the Agreement and Plan, attached hereto as Exhibit II.</I></FONT></td></tr></table>

<p><table width=600><tr>
    <td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Valuation of Assets and
      Liabilities</I>. The respective assets of each Fund will be valued the same
      way for both Funds: the net asset value per share of the common stock of
      each Fund will be determined as of the close of business on the NYSE (generally,
      4:00 p.m., Eastern time) on the business day prior to the Closing Date (the
      &#147;Valuation Time&#148;). For the purpose of determining the net asset
      value of a share of common stock of each Fund, the value of the securities
      held by the Fund plus any cash or other assets (including interest accrued
      but not yet received) minus all liabilities (including accrued expenses),
      and for MuniYield Insured the aggregate liquidation value of outstanding
      shares of AMPS, of the Fund is divided by the total number of shares of
      common stock of the Fund outstanding at such time. Daily expenses, including
      the fees payable to FAM, will accrue at the Valuation Time.</FONT></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Municipal
Bonds in which each Fund invests are traded primarily in the  over-the-counter markets.
In determining net asset value at the Valuation Time,  each Fund will use the valuations
of portfolio securities furnished by a pricing  service approved by the Boards of
Directors of each Fund. The pricing service  typically values portfolio securities at the
bid price or the yield equivalent  when quotations are readily available. Municipal Bonds
for which quotations are  not readily available will be valued at fair market value on a
consistent basis  as determined by the pricing service using a matrix system to determine
valuations. The Boards of Directors of the Funds have determined in good faith  that the
use of a pricing service is a fair method of determining the valuation  of portfolio
securities. Positions in financial futures contracts will be valued  at the Valuation
Time at closing prices for such contracts established by the  exchange on which they are
traded, or if market quotations are not readily  available, will be valued at fair value
on a consistent basis using methods  determined in good faith by the Board of Directors.
See &#147;Nest Asset Value&#148;.</font></td></tr></table>

<p><table width=600><tr>
    <td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Distribution of MuniYield
      Insured Common Stock</I>. On the Closing Date, MuniYield Insured will issue
      to MuniInsured a number of shares of MuniYield Insured Common Stock the
      aggregate net asset value of which will equal the aggregate net asset value
      of shares of common stock of MuniInsured at the Valuation Time. Each holder
      of MuniInsured Common Stock will receive the number of shares of MuniYield
      Insured Common Stock corresponding to his or her proportionate interest
      in the aggregate net asset value of the MuniInsured Common Stock plus cash
      in lieu of fractional shares.</FONT></td>
  </tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The distribution of shares
      described in the preceding paragraph will be accomplished by opening new
      accounts on the books of MuniYield Insured in the names of the holders of
      MuniInsured Common Stock and transferring to those stockholder accounts
      the MuniYield Insured Common Stock representing such stockholders&#146;
      interests in MuniInsured. Each newly-opened account on the books of MuniYield
      Insured for the previous holders of MuniInsured Common Stock would represent
      the respective pro rata number of shares of MuniYield Insured Common Stock
      (rounded down, in the case of fractional shares, to the next largest number
      of whole shares) due such holder of common stock. </font></td>
  </tr></table>


<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 49</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<P><table width=600><tr>
    <td><font size=2>No fractional shares of MuniYield Insured Common Stock will
      be issued. In lieu thereof, MuniYield Insured&#146;s transfer agent, EquiServe,
      will aggregate all fractional shares of MuniYield Insured Common Stock and
      sell the resulting whole shares on the NYSE for the account of all holders
      of fractional interests, and each such holder will be entitled to the pro
      rata share of the proceeds from such sale upon surrender of the common stock
      certificates of MuniInsured. See &#147;Surrender and Exchange of Stock Certificates&#148;
      below for a description of the procedures to be followed by the stockholders
      of MuniInsured to obtain their shares of MuniYield Insured Common Stock
      (and cash in lieu of fractional shares, if any).</font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No sales charge or
fee of any kind will be charged to stockholders of  MuniInsured in connection with their
receipt of MuniYield Insured Common Stock  in the Reorganization.</font></td></tr></table>

<p><table width=600><tr>
    <td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Expenses</I>. The expenses
      of the Reorganization that are directly attributable to MuniInsured are
      expected to include the expenses incurred in preparing, printing and mailing
      the proxy materials to be used in connection with the annual meeting of
      the stockholders of MuniInsured to consider the Reorganization, the expenses
      related to the solicitation of proxies to be voted at that meeting and a
      portion of the expenses incurred in printing the Proxy Statement and Prospectus
      contained in the N-14 Registration Statement. The expenses of the Reorganization
      that are directly attributable to MuniYield Insured will be paid by FAM.
      These expenses are expected to include the expenses incurred in printing
      sufficient copies of MuniYield Insured&#146;s Annual Report that will accompany
      the mailing of the Proxy Statement and Prospectus. Certain other expenses
      of the Reorganization, including expenses in connection with obtaining an
      opinion of counsel as to certain tax matters, the preparation of the Agreement
      and Plan, Commission fees, stock exchange fees, rating agency fees, transfer
      agent fees, legal fees and audit fees, will be borne equally by MuniInsured
      and FAM. The expenses of the Reorganization attributable to MuniInsured
      are currently estimated to be $146,000. The expenses of the Reorganization
      attributable to MuniYield Insured are currently estimated to be $117,000.</FONT></td>
  </tr></table>

<p><table width=600><tr>
    <td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Required Approvals.</I>
      Under the Articles of Incorporation of each Fund (as amended to date), relevant
      Maryland law and the rules of the NYSE or AMEX, as applicable, stockholder
      approval of the Agreement and Plan requires the affirmative vote of the
      holders of a majority of the shares of MuniInsured Common Stock issued and
      outstanding and entitled to vote thereon; no vote of the stockholders of
      MuniYield Insured is required.</FONT></td>
  </tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Deregistration and
Dissolution</I>. Following the transfer of substantially all of the assets and substantially
all of the liabilities of MuniInsured to MuniYield Insured and the distribution of
shares of MuniYield Insured Common Stock to stockholders of MuniInsured, in accordance
with the foregoing, MuniInsured will terminate its registration under the Investment
Company Act, will be dissolved under Maryland law and will withdraw its authority to do
business in any state where it is required to do so.</FONT></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Amendments and
Conditions</I>. The Agreement and Plan may be amended, modified, superseded, canceled,
renewed or extended, and the terms or covenants thereof may be waived, at any time prior
to the Closing Date with respect to any of the terms therein by written agreement of
MuniYield Insured and MuniInsured. The obligations of each Fund pursuant to the
Agreement and Plan are subject to various conditions, including a registration statement
on Form N-14 being declared effective by the Commission, approval by the stockholders of
MuniInsured as described herein, an opinion of counsel being received with respect to
certain tax matters, an opinion of counsel being received as to securities matters and
the continuing accuracy of various representations and warranties of the Funds being
confirmed by the respective parties.</FONT></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Postponement,
Termination.</I> Under the Agreement and Plan, the Board of Directors of either Fund may
cause the Reorganization to be postponed or abandoned under certain circumstances should
such Board determine that it is in the best interests of the stockholders of its
respective Fund to do so. The Agreement and Plan may be terminated, and the
Reorganization abandoned at any time (whether before or after adoption thereof by the
stockholders of either Fund) prior to the Closing Date, or the Closing Date may be
postponed: (i) by mutual consent of the Boards of Directors of both Funds and (ii) by
the Board of Directors of either Fund if any condition to that Fund &#145;s obligations
set forth in the Agreement and Plan has not been fulfilled or waived by such Board.</FONT></td></tr></table>


<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 50</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<p><table width=600><tr><td><font size=2><B>Potential Benefits to Stockholders of the
Funds as a Result of the Reorganization</B></font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In approving the Reorganization,
      the Board of Directors of MuniInsured identified certain potential benefits
      for stockholders of that Fund that are likely to result from the Reorganization,
      including lower aggregate operating expenses per share for stockholders
      of MuniInsured (excluding the expenses resulting from MuniYield Insured&#146;s
      AMPS), greater efficiency and flexibility in portfolio management and a
      more liquid trading market for the common stock of the Pro Forma MuniYield
      Insured Combined Fund. Following the Reorganization, MuniInsured stockholders
      will remain invested in a closed-end fund that has investment objectives
      and policies substantially similar to those of MuniInsured that, unlike
      MuniInsured, may use leverage to enhance the yield to the common stock.
      Although the total operating expense ratio attributable to shares of common
      stock of the Pro Forma MuniYield Insured Combined Fund is expected to be
      higher than MuniInsured&#146;s current total operating expense ratio, this
      is solely as a result of the Pro Forma MuniYield Insured Combined Fund&#146;s
      leverage through AMPS. The Directors of MuniInsured determined that the
      potential benefits to common stockholders of the Combined Fund from the
      ability to use leverage to enhance yield outweighed the potentially higher
      overall operating expense ratio.</font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In their
deliberations, the Board of Directors of MuniYield Insured observed  that although
MuniYield Insured stockholders are not expected to experience a  significant decrease in
its total operating expense ratio after the  Reorganization, the Board concluded that
MuniYield Insured stockholders will not  be adversely affected by the Reorganization and
the Fund may otherwise benefit  from an increase in the Pro Forma MuniYield Insured
Combined Fund&#146;s level of net  assets. See &#147;Risk Factors and Special
Considerations &#151;Net Asset Value; Interest  Rate Sensitivity; Credit Quality and
Other Market Conditions.&#148;</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Pro Forma
MuniYield Insured Combined Fund that would result from the  Reorganization would have a
larger asset base than either Fund has currently.  FAM estimates that the Pro Forma
MuniYield Insured Combined Fund will have net  assets of approximately $1.5 billion upon
completion of the Reorganization. A  larger asset base should provide benefits in
portfolio management. For example,  after the Reorganization the Pro Forma MuniYield
Insured Combined Fund may be  able to purchase larger amounts of Municipal Bonds at more
favorable prices than  could either Fund separately and, with this greater purchasing
power, request  improvements in the terms of the Municipal Bonds (e.g., added indenture
provisions covering call protection, sinking funds and audits for the benefit of  large
holders) prior to purchase. In addition, based on data presented by FAM,  the Board of
each Fund believes that administrative expenses for a larger Pro  Forma MuniYield Insured
Combined Fund are likely to be less than the aggregate  expenses for each Fund, resulting
in a lower expense ratio for common  stockholders of the Pro Forma MuniYield Insured
Combined Fund and higher  earnings per common share. In particular, certain fixed costs,
such as costs of  printing stockholder reports and proxy statements, legal expenses,
audit fees,  mailing costs and other expenses will be spread across a larger asset base,
thereby lowering the expense ratio for the Pro Forma MuniYield Insured Combined  Fund.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To illustrate the
potential economies of scale, the table below sets forth the  total annualized operating
expense ratio of each Fund and the Pro Forma  MuniYield Insured Combined Fund, both
including and excluding AMPS leverage,  based on their average net assets as of October
31, 2003.</font></td></tr></table>



<br>
<table border=0 cellspacing=0 cellpadding=0 width="600">
  <tr valign="bottom">
    <td width=164>&nbsp;</td>
    <td align="center" width=110>
      <p><font size="1"><b>Approximate<br>
        Average <br>
        Net Assets <br>
        (excluding Assets <br>
        Attributable to AMPS) <br>
        as of October 31, 2003 </b></font>
      <hr size="1" noshade width="90%">
    </td>
    <td align="center" colspan="2"><font size="1"><b>Total Annualized<br>
      Operating Expense<br>
      Ratio (excluding <br>
      Assets Attributable <br>
      to AMPS) </b> </font>
      <hr size="1" noshade>
    </td>
    <td align="center" width=138><font size="1"><b>Approximate Average <br>
      Net Assets (including<br>
      Assets Attributable<br>
      to AMPS)</b> </font> <font size="1"><b> as of <br>
      October 31, 2003</b> </font>
      <hr size="1" noshade width="80%">
    </td>
    <td align="center" colspan="2"><font size="1"><b>Total Annualized <br>
      Operating Expense <br>
      Ratio (including <br>
      Assets Attributable<br>
      to AMPS)</b> </font>
      <hr size="1" noshade>
    </td>
  </tr>
  <tr valign="bottom">
    <td width=164> <font size="2">MuniInsured</font></td>
    <td align="center" width=110> <font size="2">$79.6 million</font></td>
    <td align="right" width=67> <font size="2">0.79%</font></td>
    <td width=24>&nbsp;</td>
    <td align="center" width=138> <font size="2">$79.6 million</font></td>
    <td align="right" width=69> <font size="2">0.79%</font></td>
    <td width=28>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td width=164> <font size="2">MuniYield Insured</font></td>
    <td align="center" width=110> <font size="2">$952.3 million</font></td>
    <td align="right" width=67> <font size="2">0.95%</font></td>
    <td width=24><font size="2">*</font></td>
    <td align="center" width=138> <font size="2">$1.4 billion</font></td>
    <td align="right" width=69> <font size="2">0.65%</font></td>
    <td width=28><font size="2">**</font></td>
  </tr>
  <tr valign="bottom">
    <td height="14" width=164> <font size="2">Combined Fund</font></td>
    <td height="14" align="center" width=110> <font size="2">$1.0 billion</font></td>
    <td align="right" height="14" width=67> <font size="2">0.92%</font></td>
    <td height="14" width=24><font size="2">*</font></td>
    <td height="14" align="center" width=138> <font size="2">$1.5 billion</font></td>
    <td align="right" height="14" width=69> <font size="2">0.64%</font></td>
    <td height="14" width=28><font size="2">**</font></td>
  </tr>
</table>
<table width=600><tr><td><hr size=1 noshade align=left  width=75></td></tr></table>

<table width=600><tr><td width=4% align=right valign=top><font size="1">* </font></td><td width=2%><font size="1"></font></td><td width=94%><font size="1"> Including
any fee waiver and/or expense reimbursements, the total  annualized operating expense
ratio for MuniYield Insured and the Pro  Forma MuniYield Insured Combined Fund would have
been 0.94%, and 0.91%,  respectively.</font></td></tr></table>

<table width=600><tr><td width=4% align=right valign=top><font size="1">** </font></td><td width=2%><font size="1"></font></td>
    <td width=94%><font size="1"> Including any fee waiver and/or expense reimbursements,
      the total annualized operating expense ratio for MuniYield Insured and the
      Pro Forma MuniYield Insured Combined Fund would have been 0.64%, and 0.64%,
      respectively.</font></td>
  </tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 51</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<!-- MARKER PAGE="sheet: 52; page: 52" -->



<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;After the Reorganization, on
      a pro forma basis, the total annualized operating expenses of the Pro Forma
      MuniYield Insured Combined Fund as a percent of average net assets as of
      October 31, 2003 would be: (a) 0.13% higher than MuniInsured&#146;s total
      annualized operating expense ratio excluding assets attributable to AMPS
      and 0.15% lower than MuniInsured&#146;s total annualized operating expense ratio
      including assets attributable to AMPS; and (b) 0.03% lower than MuniYield
      Insured&#146;s total annualized operating expense ratio excluding assets
      attributable to AMPS and 0.01% lower than MuniYield Insured&#146;s total annualized
      operating expense ratio including assets attributable to AMPS.</font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In approving the
Reorganization, the Board of Directors of each Fund determined  that the Reorganization
is in the best interests of the stockholders of that  Fund because the Reorganization
presents no significant risks or costs  (including legal, accounting and administrative
costs) that would outweigh the  potential benefits discussed above and because the
interests of existing  stockholders of that Fund would not be diluted with respect to net
asset value  as a result of the Reorganization.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;It is not
anticipated that the Reorganization directly would benefit the holders  of shares of AMPS
of MuniYield Insured; however, the Reorganization will not  adversely affect the holders
of shares of AMPS of MuniYield Insured and the  expenses of the Reorganization will not
be borne by the holders of shares of  AMPS of MuniYield Insured.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>Surrender and Exchange of Stock Certificates</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;After the Closing
Date, each holder of an outstanding certificate or  certificates formerly representing
shares of MuniInsured Common Stock will be  entitled to receive, upon surrender of his or
her certificate or certificates, a  certificate or certificates representing the number
of shares of MuniYield  Insured Common Stock distributable with respect to such holder&#146;s
shares of  MuniInsured Common Stock, together with cash in lieu of any fractional shares
of  MuniYield Insured Common Stock. Promptly after the Closing Date, the transfer  agent
for the MuniYield Insured Common Stock will mail to each holder of  certificates formerly
representing shares of MuniInsured Common Stock a letter  of transmittal for use in
effecting this exchange.</font></td></tr></table>

<br>
<table width="600" border="0" cellpadding="0" cellspacing="0">
  <tr>
    <td><b><font size="1">If prior to the Reorganization you held: </font></b>
      <hr size="1" width="60%" align="left" noshade>
    </td>
    <td><b><font size="1">After the Reorganization, you will hold:</font></b>
      <hr size="1" width="60%" align="left" noshade>
    </td>
  </tr>
  <tr>
    <td><font size="2">MuniInsured Common Stock</font></td>
    <td><font size="2"> MuniYield Insured Common Stock</font></td>
  </tr>
  <tr>
    <td><font size="2">MuniYield Insured Common Stock</font></td>
    <td><font size="2">MuniYield Insured Common Stock </font> </td>
  </tr>
</table>
<p><table width=600><tr>
    <td> <font size=3><b><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Please do
      not send in any stock certificates at this time. Upon consummation of the
      Reorganization, holders of MuniInsured Common Stock will be furnished with
      instructions for exchanging their stock certificates for MuniYield Insured
      stock certificates and, if applicable, cash in lieu of fractional shares
      of MuniYield Insured Common Stock.</font></B></font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;From and after the
Closing Date, certificates formerly representing shares of  MuniInsured Common Stock will
be deemed for all purposes to evidence ownership  of the number of full shares of
MuniYield Insured Common Stock distributable  with respect to the shares of MuniInsured
Common Stock held before the  Reorganization as described above and as shown in the table
above, provided  that, until such stock certificates have been so surrendered, no
dividends  payable to the holders of record of MuniInsured Common Stock as of any date
subsequent to the Closing Date will be paid to the holders of such outstanding  stock
certificates. Dividends payable to holders of record of shares of  MuniYield Insured
Common Stock, as of any date after the Closing Date and prior  to the exchange of
certificates by any holder of MuniInsured Common Stock, will  be paid to such
stockholder, without interest, at the time such stockholder  surrenders his or her stock
certificates for exchange.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;From and after the
Closing Date, there will be no transfers on the stock  transfer books of MuniInsured. If,
after the Closing Date, certificates  representing shares of MuniInsured Common Stock are
presented to MuniYield  Insured, they will be canceled and exchanged for certificates
representing  MuniYield Insured Common Stock and cash in lieu of fractional shares of
MuniYield Insured Common Stock, if any, distributable with respect to such  MuniInsured
Common Stock in the Reorganization.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>Tax Consequences of the Reorganization</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Summary. MuniYield
Insured and MuniInsured will receive an opinion of counsel  with respect to the
Reorganization to the effect that, among other things,  neither Fund will recognize any
gain or loss on the transaction, and no  stockholder of MuniInsured will recognize any
gain or loss upon the receipt of  shares of MuniYield Insured </font></td></tr></table>


<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 52</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<!-- MARKER PAGE="sheet: 53; page: 53" -->




<P><table width=600><tr><td><font size=2>in the Reorganization  (except to the extent a
holder  of MuniInsured Common Stock receives cash representing an  interest in fractional
shares of MuniYield Insured Common Stock in the Reorganization).</font></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>General.</I> The
Reorganization has been structured with the intention that it qualify for Federal income
tax purposes as a tax-free reorganization under Section 368(a)(1)(C) of the Code.
MuniInsured and MuniYield Insured have elected and qualified for the special tax
treatment afforded &#147;regulated investment companies&#148; under the Code, and
MuniYield Insured intends to continue to so qualify after the Reorganization.
MuniInsured and MuniYield Insured have requested an opinion of Sidley Austin Brown &amp;Wood
LLP, counsel to MuniYield Insured and MuniInsured, to the effect that for Federal income
tax purposes: (i) the transfer of all of the assets of MuniInsured to MuniYield Insured
in return solely for shares of MuniYield Insured as provided in the Agreement and Plan
will constitute a reorganization within the meaning of Section 368(a)(1)(C) of the Code,
and MuniInsured and MuniYield Insured will each be deemed to be a &#147;party&#148; to a
reorganization within the meaning of Section 368(b) of the Code; (ii) in accordance with
Section 361(a) of the Code, no gain or loss will be recognized to MuniInsured as a result
of the asset transfer or on the distribution of shares of MuniYield Insured to
MuniInsured stockholders under Section 361(c)(1) of the Code; (iii) under Section 1032
of the Code, no gain or loss will be recognized to MuniYield Insured as a result of the
Reorganization; (iv) in accordance with Section 354(a)(1) of the Code, no gain or loss
will be recognized to the stockholders of MuniInsured on the receipt of shares of
MuniYield Insured in return for their shares of MuniInsured (except to the extent that
holders of MuniInsured Common Stock receive cash representing an interest in fractional
shares of MuniYield Insured Common Stock in the Reorganization); (v) in accordance with
Section 362(b) of the Code, the tax basis of MuniInsured&#146;s assets in the hands of
MuniYield Insured will be the same as the tax basis of such assets in the hands of
MuniInsured immediately prior to the consummation of the Reorganization; (vi) in
accordance with Section 358 of the Code, immediately after the Reorganization, the tax
basis of the shares of MuniYield Insured received by the stockholders of MuniInsured in
the Reorganization will be equal to the tax basis of the shares of MuniInsured
surrendered; (vii) in accordance with Section 1223 of the Code, a stockholder&#146;s
holding period for the shares of MuniYield Insured will be determined by including the
period for which such stockholder held the shares of MuniInsured exchanged therefor
provided that such MuniInsured shares were held as a capital asset; (viii) in accordance
with Section 1223 of the Code, MuniYield Insured&#146;s holding period with respect to
the MuniInsured assets transferred will include the period for which such assets were
held by MuniInsured; (ix) the payment of cash to holders of MuniInsured Common Stock in
lieu of fractional shares of MuniYield Insured Common Stock will be treated as though
the fractional shares were distributed as part of the Reorganization and then redeemed,
with the result that each such stockholder will have short-or long term capital gain or
loss to the extent that the cash distribution differs from his or her basis allocable to
the MuniYield Insured fractional shares; and (x) the taxable year of MuniInsured will
end on the effective date of the Reorganization, and pursuant to Section 381(a) of the
Code and regulations thereunder, MuniYield Insured will succeed to and take into account
certain tax attributes of MuniInsured, such as earnings and profits, capital loss
carryovers and method of accounting.</FONT></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under Section 381(a) of the
      Code, MuniYield Insured will succeed to and take into account certain tax
      attributes of MuniInsured, including, but not limited to, earnings and profits,
      any capital loss carryovers and method of accounting. The Code, however,
      contains special limitations with regard to the use of capital losses and
      other similar items in the context of certain reorganizations, including
      tax-free reorganizations pursuant to Section 368(a)(1)(C) of the Code, which
      could reduce the benefit of these attributes to MuniYield Insured. As of
      September 30, 2003, MuniInsured had net realized capital losses and both
      Funds had unrealized appreciation. As a result of the Reorganization, and
      subject to certain limitations, the stockholders of each Fund may benefit
      from the ability of the Combined Fund to use the capital losses of MuniInsured
      to offset any realized capital gain.</font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stockholders
should consult their tax advisers regarding the effect of the  Reorganization in light of
their individual circumstances. As the foregoing  relates only to Federal income tax
consequences, stockholders also should  consult their tax advisers as to the foreign,
state and local tax consequences  of the Reorganization.</font></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Regulated
Investment Company Status</I>. The Funds have elected and qualified since inception for
taxation as RICs under Sections 851-855 of the Code, and, after the Reorganization,
MuniYield Insured intends to continue to so qualify.</FONT></td></tr></table>


<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 53</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT>
<p>&nbsp; <!-- *************************************************************************** -->
  <!-- MARKER PAGE="sheet: 54; page: 54" -->
<p><br>
<table width=600>
  <tr>
    <td><font size=2><b>Capitalization </b></font></td>
  </tr>
</table>
<font size="2"></font>
<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following
table sets forth as of ________________ (i) the capitalization of  MuniYield Insured,
(ii) the capitalization of MuniInsured and (iii) the  capitalization of the MuniYield
Insured Pro Forma Combined Fund, as adjusted to  give effect to the Reorganization.</font></td></tr></table>

<p><table width=600><tr><td  align=center><font size=2><B>Capitalization of MuniYield
Insured, MuniInsured<BR>and the MuniYield Insured Pro Forma Combined Fund as of _________
(unaudited)</B></font></td></tr></table>


<br>
<table border=0 cellspacing=0 cellpadding=0 width="600">
  <tr valign="bottom" align="center">
    <td width="261"> <b><font size="1">&nbsp;</font></b></td>
    <td width="96"> <b><font size="1">&nbsp;MuniYield Insured</font></b>
      <hr width="90%" size="1" noshade>
    </td>
    <td width="74"> <b><font size="1">&nbsp;MuniInsured</font></b>
      <hr width="80%" size="1" noshade>
    </td>
    <td width="77"> <b><font size="1">Pro Forma <br>
      Adjustment </font></b>
      <hr width="80%" size="1" noshade>
    </td>
    <td width="92"> <b><font size="1">Combined Fund<br>
      as Adjusted </font></b>
      <hr width="80%" size="1" noshade>
    </td>
  </tr>
  <tr valign="bottom">
    <td width="261">
      <p><font size="2">Net Assets:</font></p>
    </td>
    <td width="96">
      <p><font size="2">&nbsp;</font></p>
    </td>
    <td width="74">
      <p><font size="2">&nbsp;</font></p>
    </td>
    <td width="77">
      <p><font size="2">&nbsp;</font></p>
    </td>
    <td width="92">
      <p><font size="2">&nbsp;</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td width="261">
      <p><font size="2"> Net Assets Attributable to Common Stock</font></p>
    </td>
    <td width="96">
      <p><font size="2">&nbsp;</font></p>
    </td>
    <td width="74">
      <p><font size="2">&nbsp;</font></p>
    </td>
    <td width="77">
      <p><font size="2">&nbsp;</font></p>
    </td>
    <td width="92">
      <p><font size="2">&nbsp;</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td width="261">
      <p><font size="2">Shares of Common Stock Outstanding</font></p>
    </td>
    <td width="96">
      <p><font size="2">&nbsp;</font></p>
    </td>
    <td width="74">
      <p><font size="2">&nbsp;</font></p>
    </td>
    <td width="77">
      <p><font size="2">&nbsp;</font></p>
    </td>
    <td width="92">
      <p><font size="2">&nbsp;</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td width="261">
      <p><font size="2">Net Asset Value Per Share:</font></p>
    </td>
    <td width="96">
      <p><font size="2">&nbsp;</font></p>
    </td>
    <td width="74">
      <p><font size="2">&nbsp;</font></p>
    </td>
    <td width="77">
      <p><font size="2">&nbsp;</font></p>
    </td>
    <td width="92">
      <p><font size="2">&nbsp;</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td width="261">
      <p><font size="2"> Common Stock.</font></p>
    </td>
    <td width="96">
      <p><font size="2">&nbsp;</font></p>
    </td>
    <td width="74">
      <p><font size="2">&nbsp;</font></p>
    </td>
    <td width="77">
      <p><font size="2">&nbsp;</font></p>
    </td>
    <td width="92">
      <p><font size="2">&nbsp;</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td width="261"><font size="2">Net Assets Attributable to AMPS</font></td>
    <td width="96">&nbsp;</td>
    <td width="74">&nbsp;</td>
    <td width="77">&nbsp;</td>
    <td width="92">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td width="261"><font size="2">Share of AMPS Outstanding</font></td>
    <td width="96">&nbsp;</td>
    <td width="74">&nbsp;</td>
    <td width="77">&nbsp;</td>
    <td width="92">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td width="261"><font size="2">Liquidation Preference Per Share: AMPS</font></td>
    <td width="96">&nbsp;</td>
    <td width="74">&nbsp;</td>
    <td width="77">&nbsp;</td>
    <td width="92">&nbsp;</td>
  </tr>
</table>
<br>
<p><table width=600><tr><td  align=center><font size=2><B>INFORMATION CONCERNING THE
MEETING</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>Date, Time and Place of the Meeting</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Meeting will
be held on Wednesday, May 12, 2004 at the offices of FAM, 800  Scudders Mill Road,
Plainsboro, New Jersey at 9:00 a.m. Eastern time.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>Solicitation, Revocation and Use of Proxies</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A stockholder
executing and returning a proxy has the power to revoke it at any  time prior to its
exercise (unless the proxy states that it is irrevocable and  it is coupled with an
interest) by executing a superseding proxy, by giving  written notice of the revocation
to the Secretary of the appropriate Fund or by  voting in person at the Meeting. Although
mere attendance at the Meeting will  not revoke a proxy, a stockholder present at the
Meeting may withdraw his or her  proxy and vote in person.</font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All shares represented by properly
      executed proxies, unless such proxies previously have been revoked, will
      be voted at the Meeting in accordance with the directions on the proxies;
      if no direction is indicated on a properly executed proxy, such shares will
      be voted &#147;FOR&#148; (i) Item 1, the election of the Class III Directors
      of MuniInsured and (ii) Item 2, the approval of the Agreement and Plan.
      It is not anticipated that any other matters will be brought before the
      Meeting. If, however, any other business properly is brought before the
      Meeting, proxies will be voted in accordance with the judgment of the persons
      designated on such proxies.</font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2><B>Record Date and Outstanding Shares</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Only stockholders
of record of shares of MuniInsured at the close of business on the Record Date are
entitled to vote at the Meeting  or any adjournment thereof. At the close of business on
the Record Date, ________ shares of MuniInsured Common Stock were outstanding.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>Security Ownership of Certain Beneficial
Owners and Management</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To the knowledge
of the Funds, at the Record Date, no person or entity owns  beneficially or of record 5%
or more of the shares of the common stock of either  Fund.</font></td></tr></table>


<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 54</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<!-- MARKER PAGE="sheet: 61; page: 61" -->



<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of the Record
Date, the Directors and officers of MuniInsured as a group  owned an aggregate of less
than 1% of the outstanding shares of MuniInsured  Common Stock.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of the Record
Date, the Directors and officers of MuniYield Insured as a  group owned an aggregate of
less than 1% of the outstanding shares of MuniYield  Insured Common Stock.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On the Record
Date, Mr. Glenn, a Director and an officer of each Fund, and the  other officers of each
Fund, owned an aggregate of less than 1% of the  outstanding shares of common stock of ML
&amp; Co.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>Voting Rights and Required Vote</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of
this Proxy Statement and Prospectus, each share of MuniInsured  Common Stock is entitled
to one vote.</font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Assuming the required quorum
      is present at the Meeting, the election of the Class III Directors of MuniInsured
      will require the affirmative vote of a majority of all votes cast by the
      holders of MuniInsured Common Stock.</font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Assuming the
required quorum is present at the Meeting, approval of the  Agreement and Plan requires
the affirmative vote of stockholders representing a  majority of the outstanding shares
of MuniInsured Common Stock entitled to vote  thereon.</font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of the Meeting,
      a quorum consists of a majority of stockholders present in person or by
      proxy entitled to vote at the meeting. If, by the time scheduled for the
      Meeting, a quorum of the stockholders of MuniInsured is not present, or
      if a quorum is present but sufficient votes to take action with respect
      to any Item are not received from the stockholders of the applicable Fund,
      the persons named as proxies may propose one or more adjournments of the
      Meeting with respect to that Item to permit further solicitation of proxies
      from stockholders. Any such adjournment will require the affirmative vote
      of a majority of the shares of MuniInsured present in person or by proxy
      and entitled to vote at the session of the Meeting to be adjourned. The
      persons named as proxies will vote in favor of any such adjournment if they
      determine that adjournment and additional solicitation are reasonable and
      in the interests of MuniInsured&#146;s stockholders.</font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2><B>Appraisal Rights</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under Maryland
law, stockholders of a company whose shares are listed on a  national securities
exchange, such as the common stock of MuniInsured, are not  entitled to demand the fair
value of their shares upon a transfer of assets;  therefore, the holders of MuniInsured
Common Stock will be bound by the terms of  the Reorganization, if approved at the
Meeting. However, any holder of  MuniInsured Common Stock may sell his or her shares of
MuniInsured Common Stock  at any time prior to the Reorganization on the AMEX. As
stockholders of the  corporation acquiring the assets of MuniInsured, stockholders of
MuniYield  Insured are not entitled to appraisal rights under Maryland law.</font></td></tr></table>

<p><table width=600><tr><td  align=center><font size=2><B>ADDITIONAL INFORMATION</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The expenses of
preparing, printing and mailing the proxy materials to be used  in connection with the
Meeting, and the expenses related to the solicitation of  proxies to be voted at the
Meeting, will be paid by MuniInsured. See &#147;Agreement  and Plan of Reorganization
&#151;Terms of the Agreement and Plan of Reorganization  &#151;Expenses.&#148;</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MuniInsured will
reimburse banks, brokers and others for their reasonable  expenses in forwarding proxy
solicitation materials to the beneficial owners of  shares of the Fund and certain
persons that the Fund may employ for their  reasonable expenses in assisting in the
solicitation of proxies from such  beneficial owners of shares of capital stock of the
Funds.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In order to obtain
the necessary quorum at the Meeting, supplementary  solicitation may be made by mail,
telephone, telegraph or personal interview by  officers of MuniInsured. MuniInsured has
retained Georgeson Shareholder, 17  State Street, New York, New York 10004,to aid in the
solicitation of proxies, at  a cost to be borne by MuniInsured of approximately $3,500,
plus out-of-pocket  expenses estimated to be approximately $_______.</font></td></tr></table>


<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 55</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<!-- MARKER PAGE="sheet: 62; page: 62" -->



<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Broker-dealer firms, including
      Merrill Lynch, holding MuniInsured shares in &#147;street name&#148; for
      the benefit of their customers and clients will request the instructions
      of such customers and clients on how to vote their shares on each proposal
      before the Meeting. MuniInsured understands that under the rules of the
      AMEX, such broker- dealer firms may, without instructions from their customers
      and clients, grant authority to the proxies designated to vote on the election
      of Directors (Item 1) if no instructions have been received prior to the
      date specified in the broker-dealer firm&#146;s request for voting instructions.
      With respect to shares of MuniInsured Common Stock, broker-dealer firms,
      including Merrill Lynch, will not be permitted to grant voting authority
      without instructions with respect to the approval of the Agreement and Plan
      (Item 2). MuniInsured will include shares held of record by broker-dealers
      as to which such authority has been granted in its tabulation of the total
      number of shares present for purposes of determining whether the necessary
      quorum of stockholders of MuniInsured exists. Proxies that are returned
      to the Fund but that are marked &#147;abstain&#148; or on which a broker-dealer
      has declined to vote on any non-routine proposal (&#147;broker non-votes&#148;)
      will be counted as present for the purposes of determining a quorum.</font></td>
  </tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Merrill Lynch has advised MuniInsured
      that if it votes shares held in its name for which no instructions are received,
      except as limited by agreement or applicable law, on the election of Directors
      it will do so in the same proportion as the votes received from beneficial
      owners of those shares for which instructions have been received, whether
      or not held in nominee name. Abstentions and broker non-votes are not counted
      as votes cast. Therefore, abstentions and broker non-votes will have no
      effect on the election of the Class III Directors of MuniInsured (Item 1).
      However, an abstention or broker non-vote will have the same effect as a
      vote against approval of the Agreement and Plan (Item 2).</font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Proxy
Statement and Prospectus does not contain all of the information set  forth in the
registration statement and the exhibits relating thereto that  MuniYield Insured has
filed with the Commission under the Securities Act of  1933, as amended, and the
Investment Company Act, to which reference is hereby  made.</font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Funds are subject to the
      informational requirements of the Exchange Act and the Investment Company
      Act and in accordance therewith are required to file reports, proxy statements
      and other information with the Commission. Any such reports, proxy statements
      and other information can be inspected and copied at the public reference
      facilities of the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street,
      N.W., Washington, D.C. 20549, and at the following regional offices of the
      Commission: Pacific Regional Office, at 5670 Wilshire Boulevard, 11th Floor,
      Los Angeles, California 90036; and Midwest Regional Office, at Citicorp
      Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511.
      Copies of such materials can be obtained from the public reference section
      of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
      prescribed rates. The Commission maintains a Web site at http://www.sec.gov
      containing reports, proxy and information statements and other information
      regarding registrants, including the Funds, that file electronically with
      the Commission. Reports, proxy statements and other information concerning
      MuniYield Insured can also be inspected at the offices of the NYSE, 20 Broad
      Street, New York, New York 10005 and concerning MuniInsured can also be
      inspected at the offices of the AMEX at 9801 Washington Boulevard, Gaithersburg,
      Maryland 20878.</font></td>
  </tr></table>

<p><table width=600><tr><td  align=center><font size=2><B>CUSTODIAN</B></font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;State Street acts as the custodian
      for the cash and securities of MuniInsured and MuniYield Insured. The principal
      business address of State Street in such capacity is One Heritage Drive,
      P2N, North Quincy, Massachusetts 02171. It is anticipated that State Street
      will continue to act as custodian for the Combined Fund.</font></td>
  </tr></table>

<p><table width=600><tr><td  align=center><font size=2><B>TRANSFER AGENT, DIVIDEND
DISBURSING AGENT AND REGISTRAR</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EquiServe serves
as the transfer agent, dividend disbursing agent and registrar  with respect to each
Fund. The principal business address of EquiServe in such  capacity is 150 Royall Street,
Canton, Massachusetts 02021. It is anticipated  that EquiServe will continue to provide
these services to the Combined Fund  after the Reorganization.</font></td></tr></table>


<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 56</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<!-- MARKER PAGE="sheet: 63; page: 63" -->




<p><table width=600><tr><td  align=center><font size=2><B>ACCOUNTING SERVICES PROVIDER</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;State Street
provides certain accounting services for MuniYield Insured and  MuniInsured and will
provide the same services to the Combined Fund after the  Reorganization. The principal
business address of State Street in such capacity  is 500 College Road East, Princeton,
New Jersey 08540.</font></td></tr></table>

<p><table width=600><tr><td  align=center><font size=2><B>LEGAL PROCEEDINGS</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There are no
material legal proceedings to which either Fund is a party.</font></td></tr></table>

<p><table width=600><tr><td  align=center><font size=2><B>LEGAL OPINIONS</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain legal
matters in connection with the Reorganization will be passed upon  for each Fund by
Sidley Austin Brown &amp;Wood LLP, New York, New York.</font></td></tr></table>

<p><table width=600><tr><td  align=center><font size=2><B>EXPERTS</B></font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;_____________, independent
      auditors, have audited the financial statements and financial highlights
      of MuniYield Insured, as of ___________, as set forth in their report which
      appears in this Proxy Statement and Prospectus. _____________, independent
      auditors, have audited the financial statements and financial highlights
      of MuniInsured, as of ___________, as set forth in their report which appears
      in this Proxy Statement and Prospectus. The audited financial statements
      and financial highlights of the Funds are included in reliance upon these
      reports, given on ___ and the authority of _____________ as experts in accounting
      and auditing.</font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;_________________,
will serve as the independent auditors for the Combined Fund after the Reorganization.
The principal business  address of _________________ is
_______________________________________________.</font></td></tr></table>

<p><table width=600><tr><td  align=center><font size=2><B>STOCKHOLDER PROPOSALS</B></font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MuniInsured (if the Reorganization
      is not approved) expects to hold its next Annual Meeting of Stockholders
      in April 2005. Proposals of stockholders intended to be presented at the
      Meeting must be received by MuniInsured by __________ for inclusion in the
      Fund&#146;s Proxy Statement and form of Proxy for that Meeting. The persons
      named as proxies in the proxy materials for the 2005 Annual Meeting of Stockholders
      for MuniInsured may exercise discretionary authority with respect to any
      stockholder proposal presented at such meeting if written notice of such
      proposal has not been received by MuniInsured by February __, 2005. Written
      proposals and notices should be sent to the Secretary of the Fund, 800 Scudders
      Mill Road, Plainsboro, New Jersey 08536.</font></td>
  </tr></table>

<br>
<table width=600>
  <tr>
    <td width=339>&nbsp;</td>
    <td width=249><font size=2>By Order of the Boards of Directors</font></td>
  </tr></table>

<br>
<table width=600>
  <tr>
    <td width=340>&nbsp;</td>
    <td width=248><FONT SIZE="2">Phillip S. Gillespie<BR>
      Secretary<BR><I>MuniInsured Fund, Inc.</I></FONT></td></tr></table>


<P><table width=600><tr><td><font size=2>Plainsboro, New Jersey<BR>Dated:</font></td></tr></table>



<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 57</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<!-- MARKER PAGE="sheet: 64; page: 64" -->





<p><table width=600><tr><td  align=center><font size=2><B>INDEX TO FINANCIAL STATEMENTS</B></font></td></tr></table>

<br>
<table width="600" border="0" cellpadding="0" cellspacing="0">
  <tr valign="bottom">
    <td width="547"><font size="2">Audited Financial Statements for MuniInsured
      Fund, Inc. for the Period from __________________<br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(commencement of operations) to _____________
      </font></td>
    <td width="14">&nbsp;</td>
    <td align="right" width="39"> <font size="1"><b>Page</b></font>
      <hr size="1" noshade align="right" width="90%">
    </td>
  </tr>
  <tr valign="bottom">
    <td width="547">&nbsp;</td>
    <td width="14">&nbsp;</td>
    <td width="39">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td width="547"><font size="2">Audited Financial Statements for MuniYield
      Insured, Inc. for the Period from _____________<br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (commencement of operations) to ________________</font></td>
    <td width="14">&nbsp;</td>
    <td width="39">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td width="547">&nbsp;</td>
    <td width="14">&nbsp;</td>
    <td width="39">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td width="547"><font size="2">Pro Forma Unaudited Financial Statements for
      the Combined Fund as of _________________</font></td>
    <td width="14">&nbsp;</td>
    <td width="39">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td width="547">&nbsp;</td>
    <td width="14">&nbsp;</td>
    <td width="39">&nbsp;</td>
  </tr>
</table>
<br>
<table width=600>
  <tr>
    <td width=60 align=left><font size=1>&nbsp;</font></td>
    <td width=480 align=center><font size="2"> 58</font></td>
    <td width=60 align=right><font size="1">&nbsp;</font></td>
  </tr>
</table>
<p>&nbsp;
<hr size=5 noshade width=600 align=LEFT>





<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 1; page: 1" -->

<p><table width=600><tr>
    <td align=right><font size=2><b>EXHIBIT I</b> </font></td>
  </tr></table>

<p><table width=600><tr><td  align=center><font size=2><B>INFORMATION PERTAINING TO
MUNIYIELD INSURED</B> </font></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Set forth below is
certain biographical and other information relating to the Director nominee who is an
&#147;interested person,&#148; as defined in the Investment Company Act, of the Fund:</B> </font></td></tr></table>


<br>
<table border=0 cellspacing=0 cellpadding=0 width="600">
  <tr align="center" valign="bottom">
    <td> <font size="1"><b>Name, Address and<br>
      Age of Director</b> </font>
      <hr noshade size="1" width="95%">
    </td>
    <td> <font size="1"><b> Position(s) Held <br>
      with the Fund</b> </font>
      <hr noshade size="1" width="95%">
    </td>
    <td> <font size="1"><b> Term of Office <br>
      and Length of<br>
      Time Served</b> </font>
      <hr noshade size="1" width="95%">
    </td>
    <td> <font size="1"><b> Principal Occupation <br>
      During Past Five Years</b> </font>
      <hr noshade size="1" width="95%">
    </td>
    <td> <font size="1"><b> Number of <br>
      MLIM/FAM-<br>
      Advised Funds <br>
      Overseen</b> </font>
      <hr noshade size="1" width="95%">
    </td>
    <td> <font size="1"><b> Public <br>
      Directorships</b> </font>
      <hr noshade size="1" width="95%">
    </td>
  </tr>
</table>
<table width=600><tr><td><font size=2>To be supplied by subsequent amendment </font></td></tr></table>

<table width=600><tr><td><hr size=1 noshade align=left  width=75></td></tr></table>

<table width=600><tr><td width=4% align=right valign=top><font size="1">* </font></td><td width=2%><font size="1"> </font></td><td width=94%><font size="1"> </font></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Set forth below is
certain biographical and other information relating to each non-interested Director
nominee of the Fund:</B> </font></td></tr></table>


<p>
<table border=0 cellspacing=0 cellpadding=0 width="600">
  <tr align="center" valign="bottom">
    <td> <font size="1"><b>Name, Address and<br>
      Age of Director</b> </font>
      <hr noshade size="1" width="95%">
    </td>
    <td> <font size="1"><b> Position(s) Held <br>
      with the Fund</b> </font>
      <hr noshade size="1" width="95%">
    </td>
    <td> <font size="1"><b> Term of Office <br>
      and Length of<br>
      Time Served</b> </font>
      <hr noshade size="1" width="95%">
    </td>
    <td> <font size="1"><b> Principal Occupation <br>
      During Past Five Years</b> </font>
      <hr noshade size="1" width="95%">
    </td>
    <td> <font size="1"><b> Number of <br>
      MLIM/FAM-<br>
      Advised Funds <br>
      Overseen</b> </font>
      <hr noshade size="1" width="95%">
    </td>
    <td> <font size="1"><b> Public <br>
      Directorships</b> </font>
      <hr noshade size="1" width="95%">
    </td>
  </tr>
</table>
<table width=600><tr><td><font size=2>To be supplied by subsequent amendment </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Information
relating to the share ownership by  the Directors as of the Record  Date is set forth in
the chart below: </font></td></tr></table>


<p><br>
<table border=0 cellspacing=0 cellpadding=0 width="600">
  <tr valign="bottom">
    <td> <font size="1"><b><br>
      <br>
      <br>
      Director</b> </font>
      <hr noshade size="1" width="25%" align="left">
    </td>
    <td align="center">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td align="center"> <font size="1"><b><br>
      Dollar Range of <br>
      Equity Securities in<br>
      MuniYield Insured Fund</b> </font>
      <hr noshade size="1" width="80%">
    </td>
    <td align="center">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td align="center"> <font size="1"><b>Aggregate Dollar Range of <br>
      Equity Securities in All <br>
      Registered Funds Overseen by <br>
      Director in MLIM/FAM-advised Funds</b> </font>
      <hr noshade size="1" width="80%">
    </td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
  </tr>
</table>
<table width=600><tr><td><font size=2>To be supplied by subsequent amendment </font></td></tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp; </font></td><td width=480 align=center><font size="2">
I-1 </font></td><td width=60 align=right><font size="1">&nbsp; </font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 2; page: 2" -->

<p><table width=600><tr><td  align=center><font size=2><B>INFORMATION PERTAINING TO
MUNIINSURED FUND</B> </font></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Set forth below is
certain biographical and other information relating to the Director nominee who is an
&#147;interested person,&#148; as defined in the Investment Company Act, of the Fund:</B> </font></td></tr></table>


<p>
<table border=0 cellspacing=0 cellpadding=0 width="600">
  <tr align="center" valign="bottom">
    <td> <font size="1"><b>Name, Address and<br>
      Age of Director</b> </font>
      <hr noshade size="1" width="95%">
    </td>
    <td> <font size="1"><b> Position(s) Held <br>
      with the Fund</b> </font>
      <hr noshade size="1" width="95%">
    </td>
    <td> <font size="1"><b> Term of Office <br>
      and Length of<br>
      Time Served</b> </font>
      <hr noshade size="1" width="95%">
    </td>
    <td> <font size="1"><b> Principal Occupation <br>
      During Past Five Years</b> </font>
      <hr noshade size="1" width="95%">
    </td>
    <td> <font size="1"><b> Number of <br>
      MLIM/FAM-<br>
      Advised Funds <br>
      Overseen</b> </font>
      <hr noshade size="1" width="95%">
    </td>
    <td> <font size="1"><b> Public <br>
      Directorships</b> </font>
      <hr noshade size="1" width="95%">
    </td>
  </tr>
</table>
<table width=600><tr><td><font size=2>To be supplied by subsequent amendment </font></td></tr></table>

<table width=600><tr><td><hr size=1 noshade align=left  width=75></td></tr></table>

<table width=600><tr><td width=4% align=right valign=top><font size="1">* </font></td><td width=2%><font size="1"> </font></td><td width=94%><font size="1"> </font></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Set forth below is
certain biographical and other information relating to each non-interested Director
nominee of the Fund:</B> </font></td></tr></table>


<p>
<table border=0 cellspacing=0 cellpadding=0 width="600">
  <tr align="center" valign="bottom">
    <td> <font size="1"><b>Name, Address and<br>
      Age of Director</b> </font>
      <hr noshade size="1" width="95%">
    </td>
    <td> <font size="1"><b> Position(s) Held <br>
      with the Fund</b> </font>
      <hr noshade size="1" width="95%">
    </td>
    <td> <font size="1"><b> Term of Office <br>
      and Length of<br>
      Time Served</b> </font>
      <hr noshade size="1" width="95%">
    </td>
    <td> <font size="1"><b> Principal Occupation <br>
      During Past Five Years</b> </font>
      <hr noshade size="1" width="95%">
    </td>
    <td> <font size="1"><b> Number of <br>
      MLIM/FAM-<br>
      Advised Funds <br>
      Overseen</b> </font>
      <hr noshade size="1" width="95%">
    </td>
    <td> <font size="1"><b> Public <br>
      Directorships</b> </font>
      <hr noshade size="1" width="95%">
    </td>
  </tr>
</table>
<table width=600><tr><td><font size=2>To be supplied by subsequent amendment </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Information
relating to the share ownership by the Directors as of the Record  Date is set forth in
the chart below: </font></td></tr></table>


<br>
<table border=0 cellspacing=0 cellpadding=0 width="600">
  <tr valign="bottom">
    <td> <font size="1"><b><br>
      <br>
      <br>
      Director</b> </font>
      <hr noshade size="1" width="25%" align="left">
    </td>
    <td align="center">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td align="center"> <font size="1"><b><br>
      Dollar Range of <br>
      Equity Securities in<br>
      MuniInsured Fund</b> </font>
      <hr noshade size="1" width="80%">
    </td>
    <td align="center">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td align="center"> <font size="1"><b>Aggregate Dollar Range of <br>
      Equity Securities in All <br>
      Registered Funds Overseen by <br>
      Director in MLIM/FAM-advised Funds</b> </font>
      <hr noshade size="1" width="80%">
    </td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
  </tr>
</table>
<table width=600><tr><td><font size=2>To be supplied by subsequent amendment </font></td></tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp; </font></td><td width=480 align=center><font size="2">
I-2 </font></td><td width=60 align=right><font size="1">&nbsp; </font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<!-- MARKER PAGE="sheet: 3; page: 3" -->

<p><table width=600><tr>
    <td align=right><font size=2><b>Exhibit II </b> </font></td>
  </tr></table>

<p><table width=600><tr><td  align=center><font size=2><B>AGREEMENT AND PLAN OF
REORGANIZATION</B> </font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THIS AGREEMENT AND PLAN OF
      REORGANIZATION (&#147;Agreement&#148;) is made as of the &nbsp;&nbsp;&nbsp;&nbsp;
      day of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
      2004, by and between MuniYield Insured Fund, Inc., a Maryland corporation
      (&#147;MuniYield Insured&#148;), and MuniInsured Fund, Inc., a Maryland
      corporation (&#147;MuniInsured&#148;). </font></td>
  </tr></table>

<p><table width=600><tr><td  align=center><font size=2><B>PLAN OF REORGANIZATION</B> </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The reorganization
is comprised of the following transactions: (1) MuniYield Insured will acquire
substantially all of the assets and assume substantially all of the liabilities of
MuniInsured in exchange solely for an equal aggregate value of newly issued shares of
common stock, with a par value of $.10 per share, of MuniYield Insured and (2) the
subsequent distribution of Corresponding Shares (defined in the following paragraph) of
MuniYield Insured to MuniInsured stockholders in exchange for their shares of common
stock, with a par value of $.10 per share, of MuniInsured, including shares of common
stock of MuniInsured representing the Dividend Reinvestment Plan (&#147;DRIP&#148;) shares
held in book deposit accounts of the holders of common stock of MuniInsured
(&#147;MuniInsured Common Stock&#148;). The transactions described in this paragraph are
collectively referred to as the &#147;Reorganization.&#148; MuniYield Insured together
with MuniInsured are collectively referred to as the &#147;Funds&#148;. The Boards of
Directors of MuniInsured and MuniYield Insured are referred to collectively herein as the
&#147;Boards&#148; or singularly as the &#147;Board&#148; where applicable. </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the course of
the Reorganization, shares of MuniYield Insured will be distributed to stockholders of
MuniInsured as follows: stockholders of MuniInsured as of the Valuation Time (as defined
in Section 3(c) of this Agreement) will be entitled to receive shares of common stock of
MuniYield Insured (&#147;Corresponding Shares&#148;). The aggregate net asset value of the
Corresponding Shares of MuniYield Insured to be received by each stockholder of
MuniInsured will equal the aggregate net asset value of the shares of MuniInsured owned by
such stockholder as of the Valuation Time. In consideration therefor, on the Closing Date
(as defined in Section 7 of this Agreement), MuniYield Insured shall acquire substantially
all of the assets of MuniInsured and assume substantially all of MuniInsured&#146;s
liabilities then existing, whether absolute, accrued, contingent or otherwise. It is
intended that the Reorganization described in this Agreement shall be a reorganization
within the meaning of Section 368(a)(1)(C) of the Internal Revenue Code of 1986, as
amended (the &#147;Code&#148;), and any successor provision. </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior to the
Closing Date, MuniInsured shall declare a dividend or dividends which, together with all
such previous dividends, shall have the effect of distributing to its stockholders all of
its net investment company taxable income to and including the Closing Date, if any
(computed without regard to any deduction for dividends paid) and all of its net capital
gain, if any, realized to and including the Closing Date. </font></td></tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp; </font></td><td width=480 align=center><font size="2">
II-1 </font></td><td width=60 align=right><font size="1">&nbsp; </font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<!-- MARKER PAGE="sheet: 4; page: 4" -->

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As promptly as
practicable after the consummation of the Reorganization, the Board of MuniInsured shall
take or shall cause such officers of MuniInsured to take such action as may be necessary
to dissolve MuniInsured in accordance with the laws of the State of Maryland and to
terminate MuniInsured&#146;s registration under the Investment Company Act of 1940, as
amended (the &#147;1940 Act&#148;). </font></td></tr></table>

<p><table width=600><tr><td  align=center><font size=2><B>AGREEMENT</B> </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In order to
consummate the Reorganization and in consideration of the premises and the covenants and
agreements hereinafter set forth, and intending to be legally bound, MuniYield Insured and
MuniInsured hereby agree as follows: </font></td></tr></table>

<p><table width=600><tr>
    <td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.<I>&nbsp;&nbsp;Representations
      and Warranties of MuniInsured.</I> </font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MuniInsured
represents and warrants to, and agrees with MuniYield Insured that: </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
MuniInsured is a corporation duly organized, validly existing and in  good standing in
conformity with the laws of the State of Maryland, and  has the power to own all of its
assets, to transfer the assets and  liabilities of MuniInsured to MuniYield Insured and
to carry out this  Agreement. MuniInsured has all necessary Federal, state and local
authorizations to carry on its business as it is now being conducted  and to carry out
this Agreement. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
MuniInsured is duly registered under the 1940 Act, as a closed-end  management investment
company (File No. 811-5190), and such  registration has not been revoked or rescinded and
is in full force and  effect. MuniInsured has elected and qualified at all times since
its  inception for the special tax treatment afforded regulated investment  companies
(&#147;RICs&#148;) under Sections 851-855 of the Code and intends to  continue to so
qualify through its taxable year ending on the Closing  Date. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
    <td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) As used in this Agreement,
      the term &#147;MuniInsured Investments&#148; shall mean (i) the investments
      of MuniInsured shown on the schedule of its investments as of the Valuation
      Time (as defined in Section 3(c) of this Agreement) furnished to MuniYield
      Insured pursuant to Section 9(b); and (ii) all other assets owned by MuniInsured
      or liabilities incurred by MuniInsured existing as of the Valuation Time.
      </font></td>
  </tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)
MuniInsured has full power and authority to enter into and perform its  obligations under
this Agreement. The execution, delivery and  performance of this Agreement has been duly
authorized by all necessary  action of its Board, and this Agreement constitutes a valid
and binding  contract enforceable in accordance with its terms, subject to the  effects
of bankruptcy, insolvency, moratorium, fraudulent conveyance  and similar laws relating
to or affecting creditors&#146; rights generally  and court decisions with respect thereto. </font></td></tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp; </font></td><td width=480 align=center><font size="2">
II-2 </font></td><td width=60 align=right><font size="1">&nbsp; </font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<!-- MARKER PAGE="sheet: 5; page: 5" -->

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)
MuniYield Insured has been furnished with MuniInsured&#146;s Annual Report  to Stockholders
for the year ended September 30, 2003. The financial  statements appearing in such
report, having been examined by Deloitte &amp; Touche, <font size=1>LLP </font>, independent public
accountants, fairly present the  financial position of MuniInsured as of the respective
dates indicated,  in conformity with accounting principles generally accepted in the
United States of America. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)
An unaudited statement of assets, liabilities and capital and an  unaudited schedule of
investments of MuniInsured, each as of the  Valuation Time, will be furnished to
MuniYield Insured at or prior to  the Closing Date for the purpose of determining the
number of shares of  MuniYield Insured to be issued pursuant to Section 4 of this
Agreement;  and each will fairly present the financial position of MuniInsured as  of the
Valuation Time in conformity with accounting principles  generally accepted in the United
States of America. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)
There are no material legal, administrative or other proceedings  pending or, to the
knowledge of MuniInsured, threatened against it  which assert liability on the part of
MuniInsured, which materially  affect its financial condition or its ability to
consummate the  Reorganization. MuniInsured is neither charged with nor, to the best of
the knowledge of MuniInsured, threatened with any violation or  investigation of any
possible violation of any provisions of any  Federal, state or local law or regulation or
administrative ruling  relating to any aspect of its business. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)
There are no material contracts outstanding to which MuniInsured is a  party that have
not been disclosed in the N-14 Registration Statement  (as defined in subsection (n)
below) or will not otherwise be disclosed  to MuniYield Insured prior to the Valuation
Time. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)
MuniInsured is not obligated under any provision of its Articles of  Incorporation, as
amended, restated and supplemented, or its by-laws,  as amended, or a party to any
contract or other commitment or  obligation, and is not subject to any order or decree,
which would be  violated by its execution of or performance under this Agreement,  except
insofar as the Funds have mutually agreed to amend such contract  or other commitment or
obligation to cure any potential violation as a  condition precedent to the
Reorganization. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)
MuniInsured has no known liabilities of a material amount, contingent  or otherwise,
other than those shown on its statements of assets,  liabilities and capital referred to
above, those incurred in the  ordinary course of its business as an investment company
since the date  of its most recent Annual or Semi-Annual Report, and those incurred in
connection with the Reorganization. As of the Valuation Time,  MuniInsured will advise
MuniYield Insured in writing of all known  liabilities, contingent or otherwise, whether
or not incurred in the  ordinary course of business, existing or accrued as of such time
with  respect to MuniInsured. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)
MuniInsured has filed, or has obtained extensions to file, all Federal, state and local
tax returns that  are required to be filed by it, and has paid or has obtained extensions  </font></td></tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp; </font></td><td width=480 align=center><font size="2">
II-3 </font></td><td width=60 align=right><font size="1">&nbsp; </font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<!-- MARKER PAGE="sheet: 6; page: 6" -->

<p><table width=600><tr><td width=30>&nbsp;</td><td width=570><font size=2>to pay, all
Federal, state and  local taxes shown on said returns to be due and owing and all
assessments received by it, up to and  including the taxable year in which the Closing
Date occurs. All tax liabilities of MuniInsured have  been adequately provided for on its
books, and no tax deficiency or liability of MuniInsured has been  asserted and no
question with respect thereto has been raised by the Internal Revenue Service or by any
state or local tax authority for taxes in excess of those already paid, up to and
including the taxable  year in which the Closing Date occurs. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)
At both the Valuation Time and the Closing Date, MuniInsured will have full right, power
and authority  to sell, assign, transfer and deliver the MuniInsured Investments.  At the
Closing Date, subject only to  the delivery of the MuniInsured Investments as
contemplated by this Agreement, MuniInsured will have  good and marketable title to all
of the MuniInsured Investments, and MuniYield Insured will acquire all  of the
MuniInsured Investments free and clear of any encumbrances, liens or security interests
and  without any restrictions upon the transfer thereof (except those imposed by the
Federal or state  securities laws and those imperfections of title or encumbrances as do
not materially detract from the  value or use of the MuniInsured Investments or
materially affect title thereto). </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)
No consent, approval, authorization or order of any court or  governmental authority is
required for the consummation by MuniInsured  of the Reorganization, except such as may
be required under the  Securities Act of 1933, as amended (the &#147;1933 Act&#148;), the
Securities  Exchange Act of 1934, as amended (the &#147;1934 Act&#148;), and the 1940 Act
or  state securities laws (which term as used herein shall include the laws  of the
District of Columbia and Puerto Rico). </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)
The registration statement filed by MuniYield Insured on Form N-14 relating to the shares
of MuniYield  Insured to be issued pursuant to this Agreement, which includes the proxy
statement of MuniInsured with  respect to the transactions contemplated herein and the
prospectus of MuniYield Insured (together, the  &#147;Proxy Statement and
Prospectus&#148;), and any supplement or amendment thereto or to the documents therein
(as amended, collectively the &#147;N-14 Registration Statement&#148;), on its effective
date, at the time of the  stockholders meeting referred to in Section 6(a) of this
Agreement and on the Closing Date, insofar as  it relates to MuniInsured (i) complied or
will comply in all material respects with the provisions of  the 1933 Act, the 1934 Act
and the 1940 Act and the rules and regulations thereunder, and (ii) did not  or will not
contain any untrue statement of a material fact or omit to state any material fact
required  to be stated therein or necessary to make the statements therein not
misleading; and the Proxy Statement  and Prospectus included therein did not or will not
contain any untrue statement of a material fact or  omit to state any material fact
necessary to make the statements therein, in the light of the  circumstances under which
they were made, not misleading; provided, however, that the representations  and
warranties in this subsection shall apply only to statements in or omissions from the
N-14  Registration Statement made in reliance upon and in conformity with information
furnished by MuniInsured  for use in the N-14 Registration Statement as provided in
Section 6(d) of this Agreement. </font></td></tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp; </font></td><td width=480 align=center><font size="2">
II-4 </font></td><td width=60 align=right><font size="1">&nbsp; </font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<!-- MARKER PAGE="sheet: 7; page: 7" -->

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)
MuniInsured is authorized to issue 150,000,000 shares of common stock,  par value $0.10
per share, each outstanding share of which is fully  paid and nonassessable and has full
voting rights. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p)
All of the issued and outstanding shares of MuniInsured Common Stock  were offered for
sale and sold in conformity with all applicable  Federal and state securities laws. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q)
The books and records of MuniInsured made available to MuniYield  Insured and/or its
counsel are substantially true and correct and  contain no material misstatements or
omissions with respect to the  operations of MuniInsured. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r)
MuniInsured will not sell or otherwise dispose of any of the  Corresponding Shares of
MuniYield Insured to be received in the  Reorganization, except in distribution to its
stockholders as provided  herein. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s)
MuniInsured has no plan or intention to sell or otherwise dispose of  its assets to be
acquired in the Reorganization, except for  dispositions made in the ordinary course of
business. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t)
At or prior to the Closing Date, MuniInsured will have obtained any and  all regulatory,
Board, stockholder and other approvals necessary to  effect the Reorganization as set
forth herein. </font></td></tr></table>

<p><table width=600><tr>
    <td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.<I>&nbsp;&nbsp;Representations
      and Warranties of MuniYield Insured.</I> </font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MuniYield Insured
represents and warrants to, and agrees with, MuniInsured that: </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
MuniYield Insured is a corporation duly organized, validly existing and  in good standing
in conformity with the laws of the State of Maryland,  and has the power to own all of
its assets and to carry out this  Agreement. MuniYield Insured has all necessary Federal,
state and local  authorizations to carry on its business as it is now being conducted
and to carry out this Agreement. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
MuniYield Insured is duly registered under the 1940 Act as a closed-end  management
investment company (File No. 811-6540), and such  registration has not been revoked or
rescinded and is in full force and  effect. MuniYield Insured has elected and qualified
for the special tax  treatment afforded RICs under Sections 851-855 of the Code at all
times  since its inception and intends to continue to so qualify both until  consummation
of the Reorganization and thereafter. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
MuniInsured has been furnished with MuniYield Insured&#146;s Annual Report  to Stockholders
for the year ended October 31, 2003. The financial  statements appearing therein, having
been examined by Ernst &amp; Young,  <font size=1>LLP </font>, independent public accountants, fairly present
the financial  position of MuniYield Insured as of the dates indicated, in conformity
with accounting principles generally accepted in the United States of  America. </font></td></tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp; </font></td><td width=480 align=center><font size="2">
II-5 </font></td><td width=60 align=right><font size="1">&nbsp; </font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<!-- MARKER PAGE="sheet: 8; page: 8" -->

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)
An unaudited statement of assets, liabilities and capital of MuniYield  Insured and an
unaudited schedule of investments of MuniYield Insured,  each as of the Valuation Time,
will be furnished to MuniInsured at or  prior to the Closing Date for the purpose of
determining the number of  shares of MuniYield Insured to be issued pursuant to Section 4
of this  Agreement; and each will fairly present the financial position of  MuniYield
Insured as of the Valuation Time in conformity with generally  accepted accounting
principles applied on a consistent basis. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)
MuniYield Insured has full power and authority to enter into and  perform its obligations
under this Agreement. Stockholders of MuniYield  Insured are not required to approve the
Reorganization. The execution,  delivery and performance of this Agreement has been duly
authorized by  all necessary action of its Board and this Agreement constitutes a  valid
and binding contract enforceable in accordance with its terms,  subject to the effects of
bankruptcy, insolvency, moratorium,  fraudulent conveyance and similar laws relating to
or affecting  creditors&#146; rights generally and court decisions with respect thereto. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)
There are no material legal, administrative or other proceedings  pending or, to the
knowledge of MuniYield Insured, threatened against  it which assert liability on the part
of MuniYield Insured or which  materially affect its financial condition or its ability
to consummate  the Reorganization. MuniYield Insured is not charged with or, to the  best
of its knowledge, threatened with any violation or investigation  of any possible
violation of any provisions of any Federal, state or  local law or regulation or
administrative ruling relating to any aspect  of its business. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)
There are no material contracts outstanding to which MuniYield Insured  is a party that
have not been disclosed in the N-14 Registration  Statement or will not otherwise be
disclosed to MuniInsured prior to  the Valuation Time. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)
MuniYield Insured is not obligated under any provision of its Articles  of Incorporation,
as amended, restated and supplemented, or its  by-laws, as amended, or a party to any
contract or other commitment or  obligation, and is not subject to any order or decree
which would be  violated by its execution of or performance under this Agreement,  except
insofar as the Funds have mutually agreed to amend such contract  or other commitment or
obligation to cure any potential violation as a  condition precedent to the
Reorganization. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)
MuniYield Insured has no known liabilities of a material amount,  contingent or
otherwise, other than those shown on its statements of  assets, liabilities and capital
referred to above, those incurred in  the ordinary course of its business as an
investment company since the  date of its most recent Annual or Semi-Annual Report and
those incurred  in connection with the Reorganization. As of the Valuation Time,
MuniYield Insured will advise MuniInsured in writing of all known  liabilities,
contingent or otherwise, whether or not incurred in the  ordinary course of business,
existing or accrued as of such time with  respect to MuniYield Insured. </font></td></tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp; </font></td><td width=480 align=center><font size="2">
II-6 </font></td><td width=60 align=right><font size="1">&nbsp; </font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 9; page: 9" -->

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)
No consent, approval, authorization or order of any court or  governmental authority is
required for the consummation by MuniYield  Insured of the Reorganization, except such as
may be required under the  1933 Act, the 1934 Act, the 1940 Act or state securities laws. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)
The N-14 Registration Statement, on its effective date, at the time of the stockholders
meeting referred  to in Section 6(a) of this Agreement and on the Closing Date, insofar
as it relates to MuniYield Insured  (i) complied or will comply in all material respects
with the provisions of the 1933 Act, the 1934 Act  and the 1940 Act and the rules and
regulations thereunder and (ii) did not or will not contain any  untrue statement of a
material fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; and the Proxy Statement and
Prospectus included  therein did not or will not contain any untrue statement of a
material fact or omit to state any  material fact necessary to make the statements
therein, in the light of the circumstances under which  they were made, not misleading;
provided, however, that the representations and warranties in this  subsection only shall
apply to statements in or omissions from the N-14 Registration Statement made in
reliance upon and in conformity with information furnished by MuniYield Insured for use
in the N-14  Registration Statement as provided in Section 6(d) of this Agreement. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)
MuniYield Insured is authorized to issue 200,000,000 shares of capital  stock, of which
2,200 shares have been designated as Series A Auction  Market Preferred Stock
(&#147;AMPS&#148;), 2,200 shares have been designated as  Series B AMPS, 2,200 shares
have been designated as Series C AMPS,  2,200 shares have been designated as Series D
AMPS, 4,000 shares have  been designated as Series E AMPS, 2,400 shares have been
designated as  Series F AMPS and 2,400 shares have been designated as Series G AMPS,  and
199,982,400 shares have been designated as common stock, par value  $0.10 per share, each
outstanding share of which is fully paid,  nonassessable and has full voting rights. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)
The MuniYield Insured shares to be issued to MuniInsured and  distributed to stockholders
of MuniInsured pursuant to this Agreement  will have been duly authorized and, when
issued and delivered pursuant  to this Agreement, will be legally and validly issued and
will be fully  paid and nonassessable and will have full voting rights, and no
stockholder of MuniYield Insured will have any preemptive right of  subscription or
purchase in respect thereof. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)
At or prior to the Closing Date, the MuniYield Insured shares to be  issued to
MuniInsured and distributed to stockholders of MuniInsured on  the Closing Date will be
duly qualified for offer and sale to the  public in all states of the United States in
which the sale of shares  of MuniInsured presently are qualified, and there shall be a
sufficient  number of such shares registered under the 1933 Act and, as may be
necessary, with each pertinent state securities commission to permit  the transfers
contemplated by this Agreement to be consummated. </font></td></tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp; </font></td><td width=480 align=center><font size="2">
II-7 </font></td><td width=60 align=right><font size="1">&nbsp; </font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)
At or prior to the Closing Date, MuniYield Insured will have obtained  any and all
regulatory, Board and other approvals, necessary to issue  the Corresponding Shares of
MuniYield Insured to MuniInsured for  distribution to the stockholders of MuniInsured. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p)
The books and records of MuniYield Insured made available to  MuniInsured and/or its
counsel are substantially true and correct and  contain no material misstatements or
omissions with respect to the  operations of MuniYield Insured. </font></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.  <I>The
Reorganization.</I> </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
Subject to receiving the requisite approval of the stockholders of MuniInsured, and to
the other terms  and conditions contained herein, MuniInsured agrees to convey, transfer
and deliver to MuniYield  Insured, and MuniYield Insured agrees to acquire from
MuniInsured, on the Closing Date all of the  MuniInsured Investments (including interest
accrued as of the Valuation Time on debt instruments), and  assume substantially all of
the liabilities of MuniInsured, in exchange solely for that number of shares  of
MuniYield Insured calculated in accordance with Section 4 of this Agreement. Pursuant to
this  Agreement, on the Closing Date or as soon as practicable thereafter, MuniInsured
will distribute all  Corresponding Shares of MuniYield Insured received by it to its
stockholders in exchange for their  corresponding shares of MuniInsured.  Such
distribution shall be accomplished by the opening of  stockholder accounts on the stock
ledger records of MuniYield Insured in the amounts due the  stockholders of MuniInsured
based on their respective holdings in MuniInsured as of the Valuation Time. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
Prior to the Closing Date, MuniInsured shall declare a dividend or  dividends which,
together with all such previous dividends, shall have  the effect of distributing to its
stockholders all of its net  investment company taxable income to and including the
Closing Date, if  any (computed without regard to any deduction for dividends paid) and
all of its net capital gain, if any, realized to and including the  Closing Date. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
MuniInsured will pay or cause to be paid to MuniYield Insured any  interest or dividends
it receives on or after the Closing Date with  respect to the MuniInsured Investments
transferred to MuniYield Insured  hereunder. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)
The Valuation Time shall be 4:00 p.m. New York time, on [ ], 2004, or  such earlier or
later day and time as may be mutually agreed upon in  writing (the &#147;Valuation
Time&#148;). </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)
MuniYield Insured will acquire substantially all of the assets of, and  will assume
substantially all of the liabilities of, MuniInsured. The  known liabilities of
MuniInsured as of the Valuation Time shall be  confirmed in writing to MuniYield Insured
by MuniInsured pursuant to  Section 1(j) of this Agreement. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)
MuniYield Insured and MuniInsured, will jointly file any and all such  other instruments,
including Articles of Transfer, as may be required  by the State Department of
Assessments and Taxation of Maryland to  effect the transfer of the MuniInsured
Investments to MuniYield  Insured. </font></td></tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp; </font></td><td width=480 align=center><font size="2">
II-8 </font></td><td width=60 align=right><font size="1">&nbsp; </font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)
Following the distribution referred to in subparagraph 3(a) above,  MuniInsured shall be
dissolved by such action as may be necessary in  accordance with the laws of the State of
Maryland and will terminate  its registration under the 1940 Act by filing a Form N-8F
application  for an order under Section 8(f) of the 1940 Act. </font></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.  <I>Issuance and
Valuation of MuniYield Insured Shares in the Reorganization</I>. </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Full shares of
MuniYield Insured, plus cash in lieu of  fractional shares of common stock, of an
aggregate net asset value  equal (to the nearest one ten thousandth of one cent) to the
value of  the assets of MuniInsured acquired, determined as hereinafter provided,
reduced by the amount of liabilities of MuniInsured assumed by  MuniYield Insured, shall
be issued by MuniYield Insured in exchange for  such assets of MuniInsured. The net asset
value of MuniInsured and  MuniYield Insured shall be determined as of the Valuation Time
in  accordance with the procedures described in the Proxy Statement and  Prospectus and
no formula will be used to adjust the net asset value so  determined of any Fund to take
into account differences in realized and  unrealized gains and losses. Such valuation and
determination shall be  made by MuniYield Insured in cooperation with MuniInsured and
shall be  confirmed in writing by MuniYield Insured to MuniInsured. For purposes  of
determining the net asset value of a share of common stock of each  Fund, the value of
the securities held by the Fund plus any cash or  other assets (including interest
accrued but not yet received) minus  all liabilities (including accrued expenses) of that
Fund and for  MuniYield Insured the aggregate liquidation value of outstanding shares  of
AMPS is divided by the total number of shares of common stock of  that Fund outstanding
at such time. </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MuniYield Insured
shall issue its shares of common stock to  MuniInsured by the opening of a stockholder
account on the stock ledger  records of MuniYield Insured registered in the name of
MuniInsured.  MuniInsured shall distribute Corresponding Shares of MuniYield Insured  to
its stockholders by indicating the registration of such shares in  the name of
MuniInsured&#146;s stockholders in the amounts due such  stockholders based on their
respective holdings in MuniInsured as of  the Valuation Time. </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MuniYield Insured
shall issue to MuniInsured separate  certificates or share deposit receipts for the
MuniYield Insured common  stock, registered in the name of MuniInsured. MuniInsured then
shall  distribute the MuniYield Insured common stock to the holders of  MuniInsured
Common Stock by redelivering the certificates or share  deposit receipts evidencing
ownership of MuniYield Insured common stock  to EquiServe Trust Company I.A., as the
transfer agent and registrar  for the MuniYield Insured common stock, for distribution to
the holders  of MuniInsured Common Stock on the basis of such holder&#146;s proportionate
interest in the aggregate net asset value of the common stock of  MuniInsured. With
respect to any MuniInsured stockholder holding  certificates evidencing ownership of
MuniInsured Common Stock as of the  Closing Date and subject to MuniYield Insured being
informed thereof in  writing by MuniInsured, MuniYield Insured will not permit such
stockholder to receive new certificates  </font></td></tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp; </font></td><td width=480 align=center><font size="2">
II-9 </font></td><td width=60 align=right><font size="1">&nbsp; </font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<p><table width=600><tr><td><font size=2>evidencing ownership to  MuniYield Insured
common stock, exchange MuniYield Insured common stock  credited to such stockholder&#146;s
account for share of other investment  companies managed by FAM or any of its affiliates
or pledge to redeem  such MuniYield Insured common stock in any case, until notified by
MuniInsured or its agent that such stockholder has surrendered his or  her outstanding
certificates evidencing ownership of MuniInsured Common  Stock or, in the event of lost
certificates, posted adequate bond.  MuniInsured, at its own expense, will request its
stockholders to  surrender their outstanding certificates evidencing ownership of
MuniInsured Common Stock or post adequate bond therefor. </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dividends payable
to holders of record of shares of MuniYield  Insured common stock, as of any date after
the Closing Date and prior  to exchange of certificates by any stockholder of MuniInsured
shall be  payable to such stockholder without interest; however, such dividends  shall
not be paid unless until such stockholder surrenders the stock  certificates representing
shares of common stock of MuniInsured for  exchange. </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No fractional
shares of MuniYield Insured common stock will be  issued to holders of MuniInsured Common
Stock. In lieu thereof,  MuniYield Insured&#146;s transfer agent, EquiServe Trust Company
I.A., will  aggregate all fractional shares of MuniYield Insured common stock and  sell
the resulting full shares on the New York Stock Exchange at the  current market price for
shares of MuniYield Insured common stock for  the account of all holders of fractional
interests, and each such  holder will receive such holder&#146;s pro rata share of the
proceeds of  such sale upon surrender of such holder&#146;s certificates representing
MuniInsured Common Stock. </font></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.  <I>Payment of
Expenses.</I> </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
The expenses of the Reorganization that are directly attributable to MuniInsured will be
deducted from  the assets of MuniInsured as of the Valuation Time.  These expenses are
expected to include the expenses  incurred in preparing, printing and mailing the proxy
materials to be used in connection with the  meeting of stockholders of MuniInsured to
consider the Reorganization and the expenses related to the  solicitation of proxies to
be voted at that meeting. The expenses directly attributable to MuniYield  Insured are
expected to include the expenses incurred in printing sufficient copies of MuniYield
Insured&#146;s Annual Report that will accompany the mailing of the Proxy Statement and
Prospectus.  The  expenses of the Reorganization that are directly attributable to
MuniYield Insured will be borne by its  investment adviser, Fund Asset Management, L.P.
(&#147;FAM&#148;).  Certain other expenses of the Reorganization,  including expenses in
connection with obtaining the opinion of counsel with respect to certain tax  matters,
the preparation of this Agreement, legal, transfer agent and audit fees, will be borne
equally  by MuniInsured and FAM. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
If for any reason the Reorganization is not consummated, no party shall  be liable to any
other party for any damages resulting therefrom,  including, without limitation,
consequential damages. </font></td></tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp; </font></td><td width=480 align=center><font size="2">
II-10 </font></td><td width=60 align=right><font size="1">&nbsp; </font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.  <I>Covenants of
the Funds</I>. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
MuniInsured agrees to call a special meeting of its stockholders to be  held as soon as
is practicable after the effective date of the N-14  Registration Statement for the
purpose of considering the approval of  this Agreement, and it shall be a condition to
the obligations of  MuniYield Insured and MuniInsured that the holders of a majority of
the  shares of MuniInsured issued and outstanding and entitled to vote  thereon, shall
have approved this Agreement at such special meeting at  or prior to the Valuation Time. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
Each Fund covenants to operate its respective business as presently  conducted between
the date hereof and the Closing Date. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
(i) MuniInsured agrees that following the Closing Date it will take  such action as may
be necessary to dissolve in accordance with the laws  of the State of Maryland and will
file an application pursuant to  Section 8(f) of the 1940 Act for an order declaring that
MuniInsured  has ceased to be a registered investment company, and (ii) MuniInsured  will
not make any distributions of any Corresponding Shares of  MuniYield Insured other than
to its stockholders and without first  paying or adequately providing for the payment of
all of its  liabilities not assumed by MuniYield Insured, if any, and on and after  the
Closing Date shall not conduct any business except in connection  with its termination. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)
MuniYield Insured will file the N-14 Registration Statement with the  Securities and
Exchange Commission (the &#147;Commission&#148;) and will use its  best efforts to
provide that the N-14 Registration Statement becomes  effective as promptly as
practicable. MuniInsured and MuniYield Insured  agree to cooperate fully with each other,
and each will furnish to the  other the information relating to itself to be set forth in
the N-14  Registration Statement as required by the 1933 Act, the 1934 Act, the  1940
Act, and the rules and regulations thereunder and the state  securities laws. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)
MuniInsured and MuniYield Insured each agree that by the Closing Date all of their
Federal and other tax  returns and reports required to be filed on or before such date
shall have been filed and all taxes  shown as due on said returns either have been paid
or adequate liability reserves have been provided for  the payment of such taxes.  In
connection with this covenant, MuniYield Insured and MuniInsured agree to  cooperate with
each other in filing any tax return, amended return or claim for refund, determining a
liability for taxes or a right to a refund of taxes or participating in or conducting any
audit or other  proceeding in respect of taxes. MuniYield Insured agrees to retain for a
period of ten (10) years  following the Closing Date all returns, schedules and work
papers and all material records or other  documents relating to tax matters of
MuniInsured for its taxable period first ending after the Closing  Date and for all prior
taxable periods.  Any information obtained under this subsection shall be kept
confidential except as otherwise may be necessary in connection with the filing of
returns or claims for  refund or in conducting an audit or other proceeding.  After the
Closing Date, MuniInsured shall  prepare, or cause its agents to prepare, any Federal,
state or local tax returns, including any Forms  1099, required to be filed by or with
respect to MuniInsured with respect to its final taxable year  ending with its complete
liquidation and for any prior periods or taxable years and further shall cause  such tax
returns and Forms 1099 to be duly filed with the appropriate taxing authorities.
Notwithstanding the aforementioned provisions of this subsection, MuniInsured shall bear
any expenses  incurred by it (other than for  </font></td></tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp; </font></td><td width=480 align=center><font size="2">
II-11 </font></td><td width=60 align=right><font size="1">&nbsp; </font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<p><table width=600><tr><td width=30>&nbsp;</td><td width=570><font size=2>payment of
taxes) in connection with the preparation and filing of said  tax returns and Forms 1099
after the Closing Date to the extent that MuniInsured accrued such expenses  in the
ordinary course without regard to the Reorganization; any excess expenses shall be borne
by FAM  at the time such tax returns and Forms 1099 are prepared. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)
MuniInsured agrees to mail to its stockholders of record entitled to  vote at the special
meeting of stockholders at which action is to be  considered regarding this Agreement, in
sufficient time to comply with  applicable notice requirements, a combined Proxy
Statement and  Prospectus which complies in all material respects with the applicable
provisions of Section 14(a) of the 1934 Act and Section 20(a) of the  1940 Act, and the
rules and regulations, respectively, thereunder. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)
Following the consummation of the Reorganization, MuniYield Insured  expects to stay in
existence and continue its business as a closed-end  management investment company
registered under the 1940 Act. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)
MuniYield Insured agrees to comply with the record keeping requirements  of Rule
17a-8(a)(5) under the 1940 Act after the Reorganization. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)
MuniYield Insured has no plan or intention to sell or otherwise dispose  of the
MuniInsured Investments, except for dispositions made in the  ordinary course of business. </font></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.  <I>Closing Date</I>. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
Delivery of the assets of MuniInsured to be transferred, together with any other
MuniInsured  Investments, and the Corresponding Shares of MuniYield Insured to be issued
to MuniInsured, shall be  made at the offices of Sidley Austin Brown &amp; Wood <font size=1>LLP </font>, 787
Seventh Avenue, New York, New York 10019, at  10:00 A.M. on the next full business day
following the Valuation Time, or at such other place, time and  date agreed to by
MuniInsured and MuniYield Insured, the date and time upon which such delivery is to  take
place being referred to herein as the &#147;Closing Date.&#148; To the extent that any
MuniInsured  Investments, for any reason, are not transferable on the Closing Date,
MuniInsured shall cause such  MuniInsured Investments to be transferred to MuniYield
Insured&#146;s account with State Street Bank and  Trust Company at the earliest practicable
date thereafter. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
MuniInsured will deliver to MuniYield Insured on the Closing Date  confirmations or other
adequate evidence as to the tax basis of each of  the MuniInsured Investments delivered
to MuniYield Insured hereunder. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
As soon as practicable after the close of business on the Closing Date,  MuniInsured
shall deliver to MuniYield Insured a list of the names and  addresses of all of the
stockholders of record of MuniInsured on the  Closing Date and the number of shares of
common stock of MuniInsured  owned by each such stockholder, certified to the best of its
knowledge  and belief by the transfer agent for MuniInsured or by its President. </font></td></tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp; </font></td><td width=480 align=center><font size="2">
II-12 </font></td><td width=60 align=right><font size="1">&nbsp; </font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.  <I>Conditions of
MuniInsured.</I> </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The obligations of
MuniInsured hereunder shall be subject to the following conditions: </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
That this Agreement shall have been adopted, and the Reorganization  shall have been
approved, by (i) the affirmative vote of the holders of  a majority of the shares of
common stock of MuniInsured issued,  outstanding and entitled to vote thereon, and (ii)
the Boards of  Directors of MuniYield Insured and MuniInsured, including in each case  a
majority of the independent Directors; and that MuniYield Insured  shall have delivered
to MuniInsured a copy of the resolution approving  this Agreement adopted by MuniYield
Insured&#146;s Board, certified by the  Secretary of MuniYield Insured. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
That MuniYield Insured shall have furnished to MuniInsured a statement of MuniYield
Insured&#146;s assets,  liabilities and capital, with values determined as provided in Section
4 of this Agreement, together  with a schedule of its investments, all as of the
Valuation Time, certified on MuniYield Insured&#146;s  behalf by its President (or any Vice
President) and its Treasurer, and a certificate signed by MuniYield  Insured&#146;s President
(or any Vice President) and its Treasurer, dated as of the Closing Date, certifying  that
as of the Valuation Time and as of the Closing Date there has been no material adverse
change in  the financial position of MuniYield Insured since the date of MuniYield
Insured&#146;s most recent Annual or  Semi-Annual Report as applicable, other than changes in
its portfolio securities since that date or  changes in the market value of its portfolio
securities. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
That MuniYield Insured shall have furnished to MuniInsured a  certificate signed by
MuniYield Insured&#146;s President (or any Vice  President) and its Treasurer, dated as of the
Closing Date, certifying  that, as of the Valuation Time and as of the Closing Date, all
representations and warranties of MuniYield Insured made in this  Agreement are true and
correct in all material respects with the same  effect as if made at and as of such
dates, and that MuniYield Insured  has complied with all of the agreements and satisfied
all of the  conditions on its part to be performed or satisfied at or prior to each  of
such dates. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)
That there shall not be any material litigation pending with respect to  the matters
contemplated by this Agreement. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)
That MuniInsured shall have received an opinion or opinions of Sidley Austin Brown &amp; Wood
<font size=1>LLP </font>, as  counsel to MuniInsured and MuniYield Insured, in form and substance satisfactory
to MuniInsured and  dated the Closing Date, to the effect that (i) MuniYield Insured and
MuniInsured are each corporations  duly incorporated, validly existing and in good
standing in conformity with the laws of the State of  Maryland; (ii) the Corresponding
Shares of MuniYield Insured to be issued pursuant to this Agreement are  duly authorized
and, when issued and delivered pursuant to this Agreement against payment of the
consideration set forth in the Agreement, will be validly issued and fully paid and
nonassessable by  MuniYield Insured, and no stockholder of MuniYield Insured has any
preemptive right to subscription or  purchase in respect thereof (pursuant to the
Articles of Incorporation, as amended and supplemented, of  MuniYield Insured, or the
by-laws, as amended, of MuniYield Insured or, to the best of such counsel&#146;s  knowledge,
otherwise); (iii) this Agreement has been duly authorized, executed and delivered by
MuniYield Insured and MuniInsured, and represents a valid and binding contract, </font></td></tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp; </font></td><td width=480 align=center><font size="2">
II-13 </font></td><td width=60 align=right><font size="1">&nbsp; </font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<p><table width=600><tr><td width=30>&nbsp;</td><td width=570><font size=2>enforceable in
accordance with its terms, except as enforceability may be limited by bankruptcy,
insolvency,  reorganization or other similar laws pertaining to the enforcement of
creditors&#146; rights generally and  court decisions with respect thereto; provided, such
counsel shall express no opinion with respect to  the application of equitable principles
in any proceeding, whether at law or in equity; (iv) the  execution and delivery of this
Agreement does not, and the consummation of the Reorganization will not,  violate (A) any
material provisions of the Articles of Incorporation, as amended and supplemented, of
MuniYield Insured or of MuniInsured, the by-laws, as amended, of MuniYield Insured or of
MuniInsured, or  to the best of such counsel&#146;s knowledge, Maryland law; or (B) any
material provision of agreement (known  to such counsel) to which either MuniYield
Insured or MuniInsured is a party or by which either  MuniYield Insured or MuniInsured is
bound, except insofar as the parties have agreed to amend such  provision as a condition
precedent to the Reorganization; (v) MuniInsured has the power to sell, assign,  transfer
and deliver the assets transferred by it hereunder and, upon consummation of the
Reorganization  in accordance with the terms of this Agreement, MuniInsured will have
duly transferred such assets and  liabilities in accordance with this Agreement; (vi) to
the best of such counsel&#146;s knowledge, no consent,  approval, authorization or order of
any United States federal court, Maryland state court or  governmental authority is
required for the consummation by MuniYield Insured or MuniInsured of the  Reorganization,
except such as have been obtained under the 1933 Act, the 1934 Act and the 1940 Act and
the published rules and regulations of the Commission thereunder and under Maryland law
and such as may  be required under state securities laws, if any; (vii) to such counsel&#146;s
knowledge, the N-14  Registration Statement has been declared effective under the 1933
Act, no stop order suspending the  effectiveness of the N-14 Registration Statement has
been issued and no proceedings for that purpose  have been instituted or are pending or
contemplated under the 1933 Act, and the N-14 Registration  Statement, as of its
effective date, appears on its face to be appropriately responsive in all material
respects to the requirements of the 1933 Act, the 1934 Act and the 1940 Act and the
published rules and  regulations of the Commission thereunder (other than the financial
statements and supporting schedules  included or incorporated by reference therein or
omitted therefrom as to which such counsel need to  express no opinion); (viii) the
descriptions in the N-14 Registration Statement of statutes, legal and  governmental
proceedings and contracts and other documents are accurate and fairly present the
information required to be shown by the 1933 Act and the rules promulgated thereunder;
(ix) such counsel  does not know of any statutes, legal or governmental proceedings or
contracts or other documents related  to the Reorganization of a character required to be
described in the N-14 Registration Statement which  are not described therein or, if
required to be filed, filed as required; (x) neither MuniYield Insured  nor MuniInsured,
to the knowledge of such counsel, is required to qualify to do business as a foreign
corporation in any jurisdiction except as may be required by state securities laws, and
except where  such Fund has so qualified or the failure so to qualify would not have a
material adverse effect on such  Fund or its respective stockholders; (xi) such counsel
does not have actual knowledge of any material  suit, action or legal or administrative
proceeding pending or threatened against MuniYield Insured or  MuniInsured, the
unfavorable outcome of which would materially and adversely affect MuniYield Insured or
MuniInsured; (xii) all corporate actions required to be taken by </font></td></tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp; </font></td><td width=480 align=center><font size="2">
II-14 </font></td><td width=60 align=right><font size="1">&nbsp; </font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<p><table width=600><tr><td width=30>&nbsp;</td><td width=570><font size=2>MuniYield
Insured or MuniInsured to  authorize this Agreement and to effect the Reorganization have
been duly authorized by all necessary  actions on the part of MuniYield Insured or
MuniInsured; and (xiii) such opinion is solely for the  benefit of MuniYield Insured and
MuniInsured and their respective Directors and officers.  In giving the  opinion set
forth above, Sidley Austin Brown &amp; Wood <font size=1>LLP </font> may state that they are relying on
certificates  of officers of MuniYield Insured or MuniInsured with regard to matters of
fact and certain certificates  and written statements of governmental officials with
respect to the due incorporation, valid existence  and good standing of MuniYield Insured
and MuniInsured. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)
That MuniInsured shall have received a letter from Sidley Austin Brown &amp; Wood <font size=1>LLP </font>, as
counsel to  MuniYield Insured, in form and substance satisfactory to MuniInsured and
dated the Closing Date, to the  effect that (i) while such counsel cannot make any
representation as to the accuracy or completeness of  statements of fact in the N-14
Registration Statement or any amendment or supplement thereto, nothing  has come to their
attention that caused them to believe that, on the effective date of the N-14
Registration Statement, (1) the N-14 Registration Statement contained any untrue
statement of a material  fact or omitted to state any material fact relating to MuniYield
Insured or MuniInsured required to be  stated therein or necessary to make the statements
therein not misleading; and (2) the Proxy Statement  and Prospectus included in the N-14
Registration Statement contained any untrue statement of a material  fact or omitted to
state any material fact relating to MuniYield Insured or MuniInsured necessary to  make
the statements therein, in the light of the circumstances under which they were made, not
misleading;  (ii) such counsel does not express any opinion or belief as to the financial
statements or  other financial or statistical data relating to MuniYield Insured or
MuniInsured contained or  incorporated by reference in the N-14 Registration Statement or
omitted therefrom; and (iii) such letter  is solely for the benefit of the Directors and
officers of MuniInsured and MuniYield Insured.  In giving  the letter set forth above,
Sidley Austin Brown &amp; Wood <font size=1>LLP </font> may state that they are relying on  certificates of
officers of MuniYield Insured and MuniInsured with regard to matters of fact. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)
That MuniInsured shall have received an opinion of Sidley Austin Brown &amp; Wood <font size=1>LLP </font> to
the effect that for  Federal income tax purposes (i) the transfer by MuniInsured of
substantially all of the MuniInsured  Investments to MuniYield Insured in exchange solely
for Corresponding Shares of MuniYield Insured as  provided in this Agreement will
constitute a reorganization within the meaning of Section 368(a)(1)(C)  of the Code and
each of MuniInsured and MuniYield Insured will be deemed to be a &#147;party&#148; to a
reorganization within the meaning of Section 368(b) of the Code; (ii) in accordance with
Section 361(a)  of the Code, no gain or loss will be recognized to MuniInsured as a
result of the transfer of its assets  solely in exchange for Corresponding Shares of
MuniYield Insured or on the distribution of these shares  to its stockholders under
Section 361(c)(1) of the Code; (iii) under Section 1032 of the Code, no gain  or loss
will be recognized to MuniYield Insured on the receipt of assets of MuniInsured in
exchange for  MuniYield Insured shares; (iv) in accordance with Section 354(a)(1) of the
Code, no gain or loss will be  recognized to the stockholders of MuniInsured on the
receipt of Corresponding Shares of MuniYield  Insured in exchange for their shares of
MuniInsured, except to the extent that a stockholder receives  cash in lieu of fractional
shares of  </font></td></tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp; </font></td><td width=480 align=center><font size="2">
II-15 </font></td><td width=60 align=right><font size="1">&nbsp; </font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<p><table width=600><tr><td width=30>&nbsp;</td><td width=570><font size=2>MuniYield
Insured&#146;s common stock; (v) in accordance with Section  362(b) of the Code, the tax basis
of MuniInsured&#146;s assets in the hands of MuniYield Insured will be the  same as the tax
basis of such assets in the hands of MuniInsured immediately prior to the consummation
of the Reorganization; (vi) in accordance with Section 358 of the Code, immediately after
the  Reorganization, the tax basis of the Corresponding Shares of MuniYield Insured
received by the  stockholders of MuniInsured in the Reorganization will be equal, to the
tax basis of the shares of  MuniInsured surrendered in exchange; (vii) in accordance with
Section 1223 of the Code, a stockholder&#146;s  holding period for the Corresponding Shares of
MuniYield Insured will be determined by including the  period for which such stockholder
held the shares of MuniInsured exchanged therefor, provided, that such  MuniInsured
shares were held as a capital asset; (viii) in accordance with Section 1223 of the Code,
MuniYield Insured&#146;s holding period with respect to MuniInsured&#146;s assets transferred will
include the  period for which such assets were held by MuniInsured; (ix) the payment of
cash to common stockholders  of MuniInsured in lieu of fractional shares of MuniYield
Insured common stock will be treated as though  the fractional shares were distributed as
part of the Reorganization and then redeemed, with the result  that each common
stockholder will have the short- or long- term capital gain or loss to the extent that
the cash distribution received differs from the stockholder&#146;s basis allocable to the
MuniYield Insured  fractional shares; (x) the taxable year of MuniInsured will end on the
Closing Date and (xi) pursuant to  Section 381(a) of the Code and regulations thereunder,
MuniYield Insured will succeed to and take into  account certain tax attributes of
MuniInsured, such as earnings and profits, capital loss carryovers and  method of
accounting. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)
That all proceedings taken by MuniYield Insured and its counsel in  connection with the
Reorganization and all documents incidental thereto  shall be satisfactory in form and
substance to MuniInsured and its  counsel. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)
That the N-14 Registration Statement shall have been declared effective  under the 1933
Act, and no stop order suspending such effectiveness  shall have been instituted or, to
the knowledge of MuniYield Insured or  MuniInsured, be contemplated by the Commission. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
    <td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) That MuniInsured
      shall have received from<font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      </font> a letter dated as of or within three days prior to the effective
      date of the N-14 Registration Statement and a similar letter dated as of
      or within five days prior to the Closing Date, in form and substance satisfactory
      to MuniInsured, to the effect that (i) they are independent public accountants
      with respect to MuniYield Insured within the meaning of the 1933 Act and
      the applicable published rules and regulations thereunder; (ii) in their
      opinion, the financial statements and supplementary information of MuniYield
      Insured included or incorporated by reference in the N-14 Registration Statement
      and reported on by them comply as to form in all material respects with
      the applicable accounting requirements of the 1933 Act and the published
      rules and regulations thereunder; and (iii) on the basis of limited procedures
      agreed upon by MuniInsured and described in such letter (but not an examination
      in accordance with auditing standards generally accepted in the United States
      of America) consisting of a reading of any unaudited interim financial statements
      and unaudited supplementary information of MuniYield Insured included in
      the N-14 </font></td>
  </tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp; </font></td><td width=480 align=center><font size="2">
II-16 </font></td><td width=60 align=right><font size="1">&nbsp; </font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;






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<!-- MARKER PAGE="sheet: 19; page: 19" -->

<p><table width=600><tr><td width=30>&nbsp;</td><td width=570><font size=2>Registration
Statement, and inquiries of certain officials of MuniYield Insured responsible for
financial and accounting matters, nothing came to their attention that caused them to
believe that (a)  such unaudited financial statements and related unaudited supplementary
information do not comply as to  form in all material respects with the applicable
accounting requirements of the 1933 Act and the  published rules and regulations
thereunder, (b) such unaudited financial statements are not fairly  presented in
conformity with accounting principles generally accepted in the United States of America,
applied on a basis substantially consistent with that of the audited financial
statements, or (c) such  unaudited supplementary information is not fairly stated in all
material respects in relation to the  unaudited financial statements taken as a whole;
and (iv) on the basis of limited procedures agreed upon  by MuniInsured and described in
such letter (but not an examination in accordance with auditing  standards generally
accepted in the United States of America), the information relating to MuniYield  Insured
appearing in the N-14 Registration Statement, which information is expressed in dollars
(or  percentages derived from such dollars) (with the exception of performance
comparisons, if any), has been  obtained from the accounting records of MuniYield Insured
or from schedules prepared by officials of  MuniYield Insured having responsibility for
financial and reporting matters and such information is in  agreement with such records,
schedules or computations made therefrom. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)
That the Commission shall not have issued an unfavorable advisory  report under Section
25(b) of the 1940 Act, nor instituted or  threatened to institute any proceeding seeking
to enjoin consummation  of the Reorganization with respect to MuniInsured under Section
25(c)  of the 1940 Act, and no other legal, administrative or other proceeding  shall be
instituted or threatened which would materially affect the  financial condition of
MuniYield Insured or would prohibit the  Reorganization. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)
That MuniInsured shall have received from the Commission such orders or  interpretations
as Sidley Austin Brown &amp; Wood <font size=1>LLP </font>, as counsel to  MuniInsured, deems reasonably
necessary or desirable under the 1933 Act  and the 1940 Act in connection with the
Reorganization, provided that  such counsel shall have requested such orders as promptly
as  practicable, and all such orders shall be in full force and effect. </font></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.  <I>Conditions of
MuniYield Insured.</I> </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The obligations of MuniYield
Insured hereunder shall be subject to the following conditions: </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
That this Agreement shall have been adopted, and the Reorganization  shall have been
approved, by (i) the Boards of Directors of MuniYield  Insured and MuniInsured, in each
case including a majority of the  independent Directors and (ii) by the affirmative vote
of the holders  of a majority of the shares of common stock of MuniInsured issued,
outstanding and entitled to vote thereon, and that MuniInsured shall  have delivered to
MuniYield Insured a copy of the resolution approving  this Agreement adopted by
MuniInsured&#146;s Board, and a certificate  setting forth the vote that MuniInsured&#146;s
stockholders obtained, each  certified by the Secretary of MuniInsured. </font></td></tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp; </font></td><td width=480 align=center><font size="2">
II-17 </font></td><td width=60 align=right><font size="1">&nbsp; </font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<!-- MARKER PAGE="sheet: 20; page: 20" -->

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
That MuniInsured shall have furnished to MuniYield Insured a statement of its assets,
liabilities and  capital, with values determined as provided in Section 4 of this
Agreement, together with a schedule of  investments with their respective dates of
acquisition and tax costs, all as of the Valuation Time,  certified on MuniInsured&#146;s
behalf by MuniInsured&#146;s President (or any Vice President) and its Treasurer,  and a
certificate signed by MuniInsured&#146;s President (or any Vice President) and its Treasurer,
dated the  Closing Date, certifying that as of the Valuation Time and as of the Closing
Date there has been no  material adverse change in the financial position of MuniInsured
since the date of MuniInsured&#146;s most  recent annual or semi-annual report to
stockholders, as applicable, other than changes in the  MuniInsured Investments since the
date of such report or changes in the market value of the MuniInsured  Investments. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
That MuniInsured shall have furnished to MuniYield Insured a  certificate signed by
MuniInsured&#146;s President (or any Vice President)  and its Treasurer, dated the Closing
Date, certifying that as of the  Valuation Time and as of the Closing Date all
representations and  warranties of MuniInsured made in this Agreement are true and
correct  in all material respects with the same effect as if made at and as of  such
dates and MuniInsured has complied with all of the agreements and  satisfied all of the
conditions on its part to be performed or  satisfied at or prior to such dates. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)
That there shall not be any material litigation pending with respect to  the matters
contemplated by this Agreement. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)
That MuniYield Insured shall have received an opinion of Sidley Austin  Brown &amp; Wood
<font size=1>LLP </font>, as counsel to MuniInsured, in form and substance  satisfactory to MuniYield Insured
and dated the Closing Date, with  respect to the matters specified in Section 8(e) of
this Agreement and  such other matters as MuniYield Insured reasonably may deem necessary
or desirable. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)
That MuniYield Insured shall have received a letter from Sidley Austin  Brown &amp; Wood
<font size=1>LLP </font>, as counsel to MuniInsured, in form and substance  satisfactory to MuniYield Insured
and dated the Closing Date, with  respect to the matters specified in Section 8(f) of
this Agreement and  such other matters as MuniYield Insured reasonably may deem necessary
or desirable. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)
That MuniYield Insured shall have received an opinion of Sidley Austin  Brown &amp; Wood
<font size=1>LLP </font> with respect to the matters specified in Section 8(g)  of this Agreement. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
    <td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) That MuniYield
      Insured shall have received from <font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      </font> a letter dated as of or within three days prior to the effective
      date of the N-14 Registration Statement and a similar letter dated as of
      or within five days prior to the Closing Date, in form and substance satisfactory
      to MuniYield Insured, to the effect that (i) they are independent public
      accountants with respect to MuniInsured within the meaning of the 1933 Act
      and the applicable published rules and regulations thereunder; (ii) in their
      opinion, the financial statements and supplementary information of MuniInsured
      included or incorporated by reference in the N-14 Registration Statement
      and reported on by them comply as to form in all material respects with
      the applicable accounting requirements of </font></td>
  </tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp; </font></td><td width=480 align=center><font size="2">
II-18 </font></td><td width=60 align=right><font size="1">&nbsp; </font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<p><table width=600><tr><td width=30>&nbsp;</td><td width=570><font size=2>the 1933 Act
and the published  rules and regulations thereunder; (iii) on the basis of limited
procedures agreed upon by MuniYield Insured and described in such  letter (but not an
examination in accordance with auditing standards  generally accepted in the United
States of America) consisting of a  reading of any unaudited interim financial statements
and unaudited  supplementary information of MuniInsured included in the N-14
Registration Statement, and inquiries of certain officials of  MuniInsured responsible
for financial and accounting matters, nothing  came to their attention that caused them
to believe that (a) such  unaudited financial statements and related unaudited
supplementary  information do not comply as to form in all material respects with the
applicable accounting requirements of the 1933 Act and the published  rules and
regulations thereunder, (b) such unaudited financial  statements are not fairly presented
in conformity with accounting  principles generally accepted in the United States of
America, applied  on a basis substantially consistent with that of the audited financial
statements, or (c) such unaudited supplementary information is not  fairly stated in all
material respects in relation to the unaudited  financial statements taken as a whole;
and (iv) on the basis of limited  procedures agreed upon by MuniYield Insured and
MuniInsured and  described in such letter (but not an examination in accordance with
generally accepted auditing standards), the information relating to  MuniInsured
appearing in the N-14 Registration Statement, which  information is expressed in dollars
(or percentages derived from such  dollars) (with the exception of performance
comparisons, if any), has  been obtained from the accounting records of MuniInsured or
from  schedules prepared by officials of MuniInsured having responsibility  for financial
and reporting matters and such information is in  agreement with such records, schedules
or computations made therefrom. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)
That the assets to be transferred to MuniYield Insured shall not  include any assets or
liabilities which MuniYield Insured by reason of  charter limitations, investment
policies or otherwise may not properly  acquire or assume. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)
That the N-14 Registration Statement shall have become effective under  the 1933 Act and
no stop order suspending such effectiveness shall have  been instituted or, to the
knowledge of MuniInsured or MuniYield  Insured, be contemplated by the Commission. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)
That the Commission shall not have issued an unfavorable advisory  report under Section
25(b) of the 1940 Act, nor instituted or  threatened to institute any proceeding seeking
to enjoin consummation  of the Reorganization with respect to MuniInsured under Section
25(c)  of the 1940 Act, and no other legal, administrative or other proceeding  shall be
instituted or threatened which would materially affect the  financial condition of
MuniInsured or would prohibit the Reorganization  with respect to MuniInsured. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)
That MuniYield Insured shall have received from the Commission such  orders or
interpretations as Sidley Austin Brown &amp; Wood <font size=1>LLP </font>, as counsel  to MuniYield Insured,
deems reasonably necessary or desirable under the  1933 Act and the 1940 Act in
connection with the Reorganization,  provided that such counsel shall have requested such
orders as promptly  as practicable, and all such orders shall be in full force and effect. </font></td></tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp; </font></td><td width=480 align=center><font size="2">
II-19 </font></td><td width=60 align=right><font size="1">&nbsp; </font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<!-- MARKER PAGE="sheet: 22; page: 22" -->

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)
That all proceedings taken by MuniInsured and its counsel in connection  with the
Reorganization and all documents incidental thereto shall be  satisfactory in form and
substance to MuniYield Insured. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)
That prior to the Closing Date, MuniInsured shall have declared a  dividend or dividends
which, together with all such previous dividends,  shall have the effect of distributing
to its stockholders all of its  investment company taxable income for the period to and
including the  Closing Date, if any (computed without regard to any deduction for
dividends paid), and all of its net capital gain, if any, realized to  and including the
Closing Date. </font></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.  <I>Termination,
Postponement and Waivers.</I> </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
Notwithstanding anything contained in this Agreement to the contrary, this Agreement may
be terminated  and the Reorganization abandoned at any time (whether before or after
adoption thereof by the  stockholders of MuniInsured) prior to the Closing Date, or the
Closing Date may be postponed, (i) by  mutual consent of the Boards of MuniYield Insured
and MuniInsured; (ii) by the Board of MuniInsured if  any condition of MuniInsured&#146;s
obligations set forth in Section 8 of this Agreement has not been  fulfilled or waived by
such Board; or (iii) by the Board of MuniYield Insured if any condition of  MuniYield
Insured&#146;s obligations set forth in Section 9 of this Agreement has not been fulfilled or
waived by such Board. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
If the transactions contemplated by this Agreement have not been  consummated by June 30,
2004, this Agreement automatically shall  terminate on that date, unless a later date is
mutually agreed to by  the Boards of MuniYield Insured and MuniInsured. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
In the event of termination of this Agreement pursuant to the  provisions hereof, this
Agreement shall become void and have no further  effect, and there shall not be any
liability on the part of either  MuniYield Insured and MuniInsured or persons who are
their directors,  trustees, officers, agents or stockholders in respect of this
Agreement, except for the obligation of each Fund to bear the expenses  of the
Reorganization as provided in Section 5(a). </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)
At any time prior to the Closing Date, any of the terms or conditions  of this Agreement
may be waived by the Board of either Fund (whichever  is entitled to the benefit
thereof), if, in the judgment of such Board  after consultation with its counsel, such
action or waiver will not  have a material adverse effect on the benefits intended under
this  Agreement to the stockholders of the applicable Fund, on behalf of  which such
action is taken. In addition, the Board of Directors of each  Fund has delegated to FAM
the ability to make non-material changes to  the transaction contemplated hereby if FAM
deems it to be in the best  interests of the Funds to do so. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)
The respective representations and warranties contained in Sections 1 and 2 of this
Agreement relating  to MuniYield Insured and MuniInsured shall expire and terminate on
the Closing Date and neither  MuniYield Insured, MuniInsured nor any of their officers,
directors or trustees, agents or stockholders  shall have any liability with respect to
such  </font></td></tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp; </font></td><td width=480 align=center><font size="2">
II-20 </font></td><td width=60 align=right><font size="1">&nbsp; </font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<!-- MARKER PAGE="sheet: 23; page: 23" -->

<p><table width=600><tr><td width=30>&nbsp;</td><td width=570><font size=2>representations
or warranties after the Closing Date.  This provision shall not protect any officer,
director or trustee, agent or stockholder of either Fund  against any liability to the
entity for which that officer, director or trustee, agent or stockholder so  acts or to
its stockholders, to which that officer, director or trustee, agent or stockholder
otherwise  would be subject by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of  the duties in the conduct of such office. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)
If any order or orders of the Commission with respect to this Agreement shall be issued
prior to the  Closing Date and shall impose any terms or conditions which are determined
by action of the Boards of  MuniYield Insured and MuniInsured to be acceptable, such
terms and conditions shall be binding as if a  part of this Agreement without further
vote or approval of the stockholders of MuniInsured unless such  terms and conditions
shall result in a change in the method of computing the number of shares of  MuniYield
Insured to be issued to MuniInsured in which event, unless such terms and conditions
shall  have been included in the proxy solicitation materials furnished to the
stockholders of MuniInsured  prior to the meeting at which the Reorganization shall have
been approved, this Agreement shall not be  consummated and shall terminate unless
MuniInsured promptly shall call a special meeting of stockholders  at which such
conditions so imposed shall be submitted for approval. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)
Prior to stockholder approval of the Reorganization, this Agreement may  be amended,
modified, superseded, canceled, renewed or extended, and  the terms or covenants hereof
may be waived, by a written instrument  executed by the Funds or, in the case of a
waiver, by the Fund waiving  compliance. After stockholder approval of the
Reorganization, this  Agreement may be modified and any terms or conditions waived only
as  provided in (d) above. </font></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.  <I>Other Matters.</I> </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
Pursuant to Rule 145 under the 1933 Act, and in connection with the  issuance of any
shares to any person who at the time of the  Reorganization is, to its knowledge, an
affiliate of a party to the  Reorganization pursuant to Rule 145(c), MuniYield Insured
will cause to  be affixed upon the certificate(s) issued to such person (if any) a
legend as follows: </font></td></tr></table>

<br>
<table width=600>
  <tr>
    <td width=81>&nbsp;</td>
    <td width=507><font size=2>THESE SHARES ARE SUBJECT TO RESTRICTIONS ON TRANSFER
      UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED
      EXCEPT TO MuniYield Insured FUND, Inc. (OR ITS STATUTORY SUCCESSOR) (THE
      &#147;FUND&#148;) OR ITS PRINCIPAL UNDERWRITER UNLESS (1) A REGISTRATION
      STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT OF
      1933 OR (2) IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE FUND,
      SUCH REGISTRATION IS NOT REQUIRED. </font></td>
  </tr></table>

<p><table width=600><tr><td width=30>&nbsp;</td><td width=570><font size=2>and, further,
that stop transfer instructions will be issued to  MuniYield Insured&#146;s transfer agent
with respect to such shares.  MuniInsured will provide MuniYield Insured on the  </font></td></tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp; </font></td><td width=480 align=center><font size="2">
II-21 </font></td><td width=60 align=right><font size="1">&nbsp; </font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<!-- MARKER PAGE="sheet: 24; page: 24" -->

<p><table width=600><tr><td width=30>&nbsp;</td><td width=570><font size=2>Closing Date
with the  name of any stockholder who is, to the knowledge of MuniInsured, an  affiliate
of MuniInsured on such date. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
All covenants, agreements, representations and warranties made under  this Agreement and
any certificates delivered pursuant to this  Agreement shall be deemed to have been
material and relied upon by each  of the parties, notwithstanding any investigation made
by them or on  their behalf. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
Any notice, report or demand required or permitted by any provision of  this Agreement
shall be in writing and shall be made by hand delivery,  prepaid certified mail or
overnight service, addressed to either Fund,  in each case at 800 Scudders Mill Road,
Plainsboro, New Jersey 08536,  Attn: Terry K. Glenn, President. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)
This Agreement supersedes all previous correspondence and oral  communications between
the parties regarding the Reorganization,  constitutes the only understanding with
respect to the Reorganization,  may not be changed other than by a letter of agreement
signed by each  party and shall be governed by and construed in accordance with the  laws
of the State of New York applicable to agreements made and to be  performed in said state. </font></td></tr></table>

<p><table width=600>
<tr><td width=30>&nbsp;</td>
<td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)
Copies of the Articles of Incorporation, as amended, restated and  supplemented, as
applicable, of each of MuniYield Insured and  MuniInsured are on file with the State
Department of Assessments and  Taxation of the State of Maryland and notice is hereby
given that this  instrument is executed on behalf of the Directors of each of MuniYield
Insured and MuniInsured. </font></td></tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp; </font></td><td width=480 align=center><font size="2">
II-22 </font></td><td width=60 align=right><font size="1">&nbsp; </font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<!-- MARKER PAGE="sheet: 25; page: 25" -->

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement may
be executed in any number of counterparts, each of which, when executed and delivered,
shall be deemed to be an original but all such counterparts together shall constitute but
one instrument. </font></td></tr></table>

<p>
<table width=600>
  <tr valign="top">
    <td width=209>&nbsp;</td>
    <td width=123>&nbsp;</td>
    <td colspan="2"><font size=2>M<font size="1">UNI<font size="2">Y</font>IELD
      </font> I<font size="1">NSURED </font> F<font size="1">UND </font>, I<font size="1">NC
      </font>. <br>
      <br>
       </font></td>
  </tr>
  <tr valign="top">
    <td width=209>&nbsp;</td>
    <td width=123>&nbsp;</td>
    <td width=28><font size=2>By: </font></td>
    <td width=220> <br>
      <hr noshade size="1">
    </td>
  </tr>
  <tr valign="top">
    <td width=209><font size=2>Attest: <br>
      <br>
       </font> <font size=2>  </font></td>
    <td width=123>&nbsp;</td>
    <td width=28>&nbsp;</td>
    <td width=220>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width=209 align="center">
      <hr noshade size="1">
      <font size=2>Secretary </font></td>
    <td width=123>&nbsp;</td>
    <td width=28>&nbsp;</td>
    <td width=220>&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width=209 align="center">&nbsp;</td>
    <td width=123>&nbsp;</td>
    <td width=248 colspan="2"><font size=2>M<font size="1">UNI </font>I<font size="1">NSURED </font>
      F<font size="1">UND </font>, I<font size="1">NC </font>. <br>
      <br>
       </font></td>
  </tr>
  <tr valign="top">
    <td width=209 align="center">&nbsp;</td>
    <td width=123>&nbsp;</td>
    <td width=28 valign="top"><font size=2>By: </font></td>
    <td width=220 valign="top"> <br>
      <hr noshade size="1">
    </td>
  </tr>
  <tr valign="top">
    <td width=209 valign="top"><font size=2>Attest: <br>
      <br>
       </font> <font size=2>  </font></td>
    <td width=123>&nbsp;</td>
    <td width=28 valign="top">&nbsp;</td>
    <td width=220 valign="top">&nbsp;</td>
  </tr>
  <tr valign="top">
    <td width=209 align="center" valign="top">
      <hr noshade size="1">
      <font size=2>Secretary </font></td>
    <td width=123>&nbsp;</td>
    <td width=28 valign="top">&nbsp;</td>
    <td width=220 valign="top">&nbsp;</td>
  </tr>
</table>

<p>
<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp; </font></td><td width=480 align=center><font size="2">
II-23 </font></td><td width=60 align=right><font size="1">&nbsp; </font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<!-- MARKER PAGE="sheet: 26; page: 26" -->

<p><table width=600><tr><td align=right><font size=2><B>Exhibit III</B> </font></td></tr></table>

<p><table width=600><tr><td  align=center><font size=2><B>Description Of Bond Ratings</B> </font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>Description of Moody&#146;s Investors Service,
Inc.&#146;s (&#147;Moody&#146;s&#148;) Bond Ratings</B> </font></td></tr></table>

<P><table width=600><TR><TD width=10% valign=top><font size=2>
Aaa  </font></TD><TD width=90% valign=top><font size=2> Bonds
which are rated Aaa are judged to be of the best quality.  They carry the smallest degree
of investment risk and are generally  referred to as &#147;gilt edge.&#148; Interest
payments are protected by a  large or by an exceptionally stable margin and principal is
secure.  While the various protective elements are likely to change, such  changes as can
be visualized are most unlikely to impair the  fundamentally strong position of such
issues. </font></TD></TR></TABLE>

<P><table width=600><TR><TD width=10% valign=top><font size=2>
Aa  </font></TD><TD width=90% valign=top><font size=2> Bonds
which are rated Aa are judged to be of high quality by all  standards. Together with the
Aaa group they comprise what are  generally known as high grade bonds. They are rated
lower than the  best bonds because margins of protection may not be as large as in  Aaa
securities or fluctuation of protective elements may be of  greater amplitude or there
may be other elements present which make  the long-term risks appear somewhat larger than
in Aaa securities. </font></TD></TR></TABLE>

<P><table width=600><TR><TD width=10% valign=top><font size=2>
A  </font></TD><TD width=90% valign=top><font size=2> Bonds
which are rated A possess many favorable investment  attributes and are to be considered
as upper medium grade  obligations. Factors giving security to principal and interest are
considered adequate, but elements may be present which suggest a  susceptibility to
impairment sometime in the future. </font></TD></TR></TABLE>

<P><table width=600><TR><TD width=10% valign=top><font size=2>
Baa  </font></TD><TD width=90% valign=top> <FONT SIZE="2">Bonds
which are rated Baa are considered as medium grade obligations, <I>i.e.</I>, they are neither
highly protected nor poorly secured. Interest payments and principal security appear
adequate for the present, but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics as well. </font></TD></TR></TABLE>

<P><table width=600><TR><TD width=10% valign=top><font size=2>
Ba  </font></TD><TD width=90% valign=top><font size=2> Bonds
which are rated Ba are judged to have speculative elements;  their future cannot be
considered as well assured. Often the  protection of interest and principal payments may
be very moderate  and thereby not well safeguarded during both good and bad times  over
the future. Uncertainty of position characterizes bonds in  this class. </font></TD></TR></TABLE>

<P><table width=600><TR><TD width=10% valign=top><font size=2>
B  </font></TD><TD width=90% valign=top><font size=2> Bonds
which are rated B generally lack characteristics of the  desirable investment. Assurance
of interest and principal payments  or of maintenance of other terms of the contract over
any long  period of time may be small. </font></TD></TR></TABLE>

<P><table width=600><TR><TD width=10% valign=top><font size=2>
Caa  </font></TD><TD width=90% valign=top><font size=2> Bonds
which are rated Caa are of poor standing. Such issues may be  in default or there may be
present elements of danger with respect  to principal or interest. </font></TD></TR></TABLE>

<P><table width=600><TR><TD width=10% valign=top><font size=2>
Ca  </font></TD><TD width=90% valign=top><font size=2> Bonds
which are rated Ca represent obligations which are  speculative in a high degree. Such
issues are often in default or  have other marked shortcomings. </font></TD></TR></TABLE>

<P><table width=600><TR><TD width=10% valign=top><font size=2>
C  </font></TD><TD width=90% valign=top><font size=2> Bonds
which are rated C are the lowest rated class of bonds and  issues so rated can be
regarded as having extremely poor prospects  of ever attaining any real investment
standing. </font></TD></TR></TABLE>

<p><table width=600><tr><td><FONT SIZE="2"><I>Note:</I> Moody&#146;s applies numerical modifiers 1, 2,
and 3 in each generic rating classification from Aa through Caa. The modifier 1
indicates that the obligation ranks in the higher end of its generic rating category;
the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in
the lower end of that generic rating category. </font></td></tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp; </font></td><td width=480 align=center><font size="2">
III-1 </font></td><td width=60 align=right><font size="1">&nbsp; </font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<!-- MARKER PAGE="sheet: 27; page: 27" -->

<p><table width=600><tr><td><font size=2><B>Description of Moody&#146;s U.S. Short-Term Ratings</B> </font></td></tr></table>

<P><table width=600><TR>
    <TD width=20% valign=top><font size=2> MIG 1/VMIG 1  </font></TD>
    <TD width=80% valign=top><font size=2>This designation denotes superior credit
      quality. Excellent protection is afforded by established cash flows, highly
      reliable liquidity support, or demonstrated broad-based access to the market
      for refinancing. </font></TD>
  </TR></TABLE>

<P><table width=600><TR>
    <TD width=20% valign=top><font size=2> MIG 2/VMIG 2  </font></TD>
    <TD width=80% valign=top><font size=2>This designation denotes strong credit
      quality. Margins of protection are ample, although not as large as in the
      preceding group. </font></TD>
  </TR></TABLE>

<P><table width=600><TR>
    <TD width=20% valign=top><font size=2> MIG 3/VMIG 3  </font></TD>
    <TD width=80% valign=top><font size=2>This designation denotes acceptable
      credit quality. Liquidity and cash-flow protection may be narrow, and market
      access for refinancing is likely to be less well-established. </font></TD>
  </TR></TABLE>

<P><table width=600><TR>
    <TD width=20% valign=top><font size=2> SG  </font></TD>
    <TD width=80% valign=top><font size=2> This designation denotes speculative-grade
      credit quality. Debt instruments in this category may lack sufficient margins
      of protection. </font></TD>
  </TR></TABLE>

<p><table width=600><tr><td><font size=2><B>Description of Moody&#146;s Commercial Paper
Ratings</B> </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Moody&#146;s
Commercial Paper ratings are opinions of the ability of issuers to repay punctually
promissory obligations not having an original maturity in excess of nine months.
Moody&#146;s employs the following three designations, all judged to be investment grade,
to indicate the relative repayment capacity of rated issuers: </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issuers rated
Prime-1 (or supporting institutions) have a superior ability for repayment of short term
promissory obligations. Prime-1 repayment ability will often be evidenced by many of the
following characteristics: leading market positions in well established industries; high
rates of return on funds employed; conservative capitalization structures with moderate
reliance on debt and ample asset protection; broad margins in earning coverage of fixed
financial charges and high internal cash generation; and well established access to a
range of financial markets and assured sources of alternate liquidity. </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issuers rated
Prime-2 (or supporting institutions) have a strong ability for repayment of short term
promissory obligations. This will normally be evidenced by many of the characteristics
cited above but to a lesser degree. Earnings trends and coverage ratios, while sound, may
be more subject to variation. Capitalization characteristics, while still appropriate, may
be more affected by external conditions. Ample alternate liquidity is maintained. </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issuers rated
Prime-3 (or supporting institutions) have an acceptable ability for repayment of short
term promissory obligations. The effects of industry characteristics and market
composition may be more pronounced. Variability in earnings and profitability may result
in changes to the level of debt protection measurements and may require relatively high
financial leverage. Adequate alternate liquidity is maintained. </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issuers rated Not
Prime do not fall within any of the Prime rating categories. </font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>Description of Standard &amp; Poor&#146;s, a
Division of The McGraw-Hill Companies, Inc.  (&#147;Standard &amp; Poor&#146;s&#148;), Debt
Ratings</B> </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A Standard &amp;
Poor&#146;s issue credit rating is a current opinion of the creditworthiness of an obligor
with respect to a specific financial obligation, a specific class of financial obligations
or a specific program. It takes into consideration the creditworthiness of guarantors,
insurers, or other forms of credit enhancement on the obligation. </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The issue credit
rating is not a recommendation to purchase, sell or hold a financial obligation, inasmuch
as it does not comment as to market price or suitability for a particular investor. </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The issue credit
ratings are based on current information furnished by the obligors or obtained by Standard
&amp; Poor&#146;s from other sources Standard &amp; Poor&#146;s considers reliable.
Standard &amp; Poor&#146;s does not perform an audit in connection with any rating and
may, on occasion, rely on unaudited financial information. The ratings may be changed,
suspended, or withdrawn as a result of changes in, or unavailability of, such information,
or based on other circumstances. </font></td></tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp; </font></td><td width=480 align=center><font size="2">
III-2 </font></td><td width=60 align=right><font size="1">&nbsp; </font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The issue credit
ratings are based, in varying degrees, on the following considerations: </font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I. Likelihood of payment&#151;capacity
      and willingness of the obligor as to the timely payment of interest and
      repayment of principal in accordance with the terms of the obligation; </font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;II. Nature of and
provisions of the obligation; </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;III. Protection
afforded to, and relative position of, the obligation in the event of bankruptcy,
reorganization or other arrangement under the laws of bankruptcy and other laws affecting
creditors&#146; rights. </font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>Long Term Issue Credit Ratings</B> </font></td></tr></table>

<P><table width=600><TR><TD width=10% valign=top><font size=2>
AAA  </font></TD><TD width=90% valign=top><font size=2> An
obligation rated &#147;AAA&#148; has the highest rating assigned by  Standard &amp; Poor&#146;s.
Capacity to meet its financial commitment on the  obligation is extremely strong. </font></TD></TR></TABLE>

<P><table width=600><TR><TD width=10% valign=top><font size=2>
AA  </font></TD><TD width=90% valign=top><font size=2> An
obligation rated &#147;AA&#148; differs from the highest rated issues only  in small
degree. The Obligor&#146;s capacity to meet its financial  commitment on the obligation is
very strong. </font></TD></TR></TABLE>

<P><table width=600><TR><TD width=10% valign=top><font size=2>
A  </font></TD><TD width=90% valign=top><font size=2> An
obligation rated &#147;A&#148; is somewhat more susceptible to the adverse  effects of
changes in circumstances and economic conditions than  debt in higher-rated categories.
However, the obligor&#146;s capacity to  meet its financial commitment on the obligation is
still strong. </font></TD></TR></TABLE>

<P><table width=600><TR><TD width=10% valign=top><font size=2>
BBB  </font></TD><TD width=90% valign=top><font size=2> An
obligation rated &#147;BBB&#148; exhibits adequate protection parameters.  However,
adverse economic conditions or changing circumstances are  more likely to lead to a
weakened capacity of the obligor to meet  its financial commitment on the obligation. </font></TD></TR></TABLE>

<P><table width=600><TR><TD width=10% valign=top><font size=2>
BB<BR>B<BR>CCC<BR>CC<BR>C  </font></TD><TD width=90% valign=top><font size=2>An
obligation rated &#147;BB,&#148; &#147;B,&#148; &#147;CCC,&#148; &#147;CC&#148; and
&#147;C&#148; are regarded as having  significant speculative characteristics.
&#147;BB&#148; indicates the least degree of  speculation and &#147;C&#148; the highest
degree of speculation. While such debt will  likely have some quality and protective
characteristics, these may be  outweighed by large uncertainties or major risk exposures
to adverse conditions. </font></TD></TR></TABLE>


<P><table width=600><TR><TD width=10% valign=top><font size=2>
D  </font></TD><TD width=90% valign=top><font size=2> An
obligation rated &#147;D&#148; is in payment default. The &#147;D&#148; rating  category
is used when payments on an obligation are not made on the  date due even if the
applicable grace period has not expired,  unless Standard &amp; Poor&#146;s believes that such
payments will be made  during such grace period. The &#147;D&#148; rating also will be
used upon the  filing of a bankruptcy petition or the taking of similar action if
payments on an obligation are jeopardized. </font></TD></TR></TABLE>

<P><table width=600><TR><TD width=10% valign=top><font size=2>
c  </font></TD><TD width=90% valign=top><font size=2> The
&#145;c&#146; subscript is used to provide additional information to  investors that the bank may
terminate its obligation to purchase  tendered bonds if the long term credit rating of
the issuer is below an  investment-grade level and/or the issuer&#146;s bonds are deemed
taxable. </font></TD></TR></TABLE>

<P><table width=600><TR><TD width=10% valign=top><font size=2>
p  </font></TD><TD width=90% valign=top><font size=2> The
letter &#145;p&#146; indicates that the rating is provisional. A provisional  rating assumes the
successful completion of the project financed by the  debt being rated and indicates that
payment of debt service  requirements is largely or entirely dependent upon the
successful,  timely completion of the project. This rating, however, while  addressing
credit quality subsequent to the completion of the project,  makes no comment on the
likelihood of or the risk of default upon  failure of such completion. The investor
should exercise his own  judgment with respect to such likelihood and risk. </font></TD></TR></TABLE>

<P><table width=600><TR><TD width=10% valign=top><font size=2>
*  </font></TD><TD width=90% valign=top><font size=2> Continuance
of the ratings is contingent upon Standard &amp; Poor&#146;s receipt  of an executed copy of
the escrow agreement or closing documentation  confirming investments and cash flows. </font></TD></TR></TABLE>

<P><table width=600><TR><TD width=10% valign=top><font size=2>
r  </font></TD><TD width=90% valign=top><font size=2> This
symbol is attached to the ratings of instruments with significant  noncredit risks. It
highlights risks to principal or volatility of  expected returns which are not addressed
in the credit rating. </font></TD></TR></TABLE>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp; </font></td><td width=480 align=center><font size="2">
III-3 </font></td><td width=60 align=right><font size="1">&nbsp; </font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<P><table width=600><TR><TD width=10% valign=top><font size=2>
N.R.  </font></TD><TD width=90% valign=top><font size=2> This
indicates that no rating has been requested, that there is  insufficient information on
which to base a rating, or that Standard &amp; Poor&#146;s does not rate a particular
obligation as a matter of policy. </font></TD></TR></TABLE>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Plus</I> (+) or <I>Minus</I>
(-): The ratings from &#147;AA&#148; to &#147;CCC&#148; may be modified by the addition of
a plus or minus sign to show relative standing within the major rating categories. </font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>Description of Standard &amp; Poor&#146;s
Commercial Paper Ratings</B> </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A Standard &amp;
Poor&#146;s commercial paper rating is a current assessment of the likelihood of timely
payment of debt having an original maturity of no more than 365 days. Ratings are graded
into several categories, ranging from &#147;A-1&#148; for the highest-quality obligations
to &#147;D&#148; for the lowest. These categories are as follows: </font></td></tr></table>

<P><table width=600><TR><TD width=10% valign=top><font size=2>
A-1  </font></TD><TD width=90% valign=top><font size=2> A
short-term obligation rated &#147;A-1&#148; is rated in the highest  category by Standard
&amp; Poor&#146;s. The obligor&#146;s capacity to meet its  financial commitment on the obligation
is strong. Within this  category, certain obligations are designated with a plus sign
(+).  This indicates that the obligor&#146;s capacity to meet its financial  commitment on
these obligations is extremely strong. </font></TD></TR></TABLE>

<P><table width=600><TR><TD width=10% valign=top><font size=2>
A-2  </font></TD><TD width=90% valign=top><font size=2> A
short-term obligation rated &#147;A-2&#148; is somewhat more susceptible to  the adverse
effects of changes in circumstances and economic  conditions than obligations in higher
rating categories. However,  the obligor&#146;s capacity to meet its financial commitment on
the  obligation is satisfactory. </font></TD></TR></TABLE>

<P><table width=600><TR><TD width=10% valign=top><font size=2>
A-3  </font></TD><TD width=90% valign=top><font size=2> A
short-term obligation rated &#147;A-3&#148; exhibits adequate protection  parameters.
However, adverse economic conditions or changing  circumstances are more likely to lead
to a weakened capacity of the  obligor to meet its financial commitment on the obligation. </font></TD></TR></TABLE>

<P><table width=600><TR><TD width=10% valign=top><font size=2>
B  </font></TD><TD width=90% valign=top><font size=2> A
short-term obligation rated &#147;B&#148; is regarded as having significant  speculative
characteristics. The obligor currently has the capacity  to meet its financial commitment
on the obligation; however, it  faces major ongoing uncertainties which could lead to the
obligor&#146;s  inadequate capacity to meet its financial commitment on the  obligation. </font></TD></TR></TABLE>

<P><table width=600><TR><TD width=10% valign=top><font size=2>
C  </font></TD><TD width=90% valign=top><font size=2> A
short-term obligation rated &#147;C&#148; is currently vulnerable to  nonpayment and is
dependent upon favorable business, financial and  economic conditions for the obligor to
meet its financial  commitment on the obligation. </font></TD></TR></TABLE>

<P><table width=600><TR><TD width=10% valign=top><font size=2>
D  </font></TD><TD width=90% valign=top><font size=2> A
short-term obligation rated &#147;D&#148; is in payment default. The &#147;D&#148;
rating category is used when interest payments or principal  payments are not made on the
date due even if the applicable grace  period has not expired, unless Standard &amp; Poor&#146;s
believes that such  payments will be made during such grace period. The &#147;D&#148;
rating will  also be used upon the filing of a bankruptcy petition or the taking  of a
similar action if payments on an obligation are jeopardized. </font></TD></TR></TABLE>

<P><table width=600><TR><TD width=10% valign=top><font size=2>
c  </font></TD><TD width=90% valign=top><font size=2> The
&#147;c&#148; subscript is used to provide additional information to  investors that the
bank may terminate its obligation to purchase  tendered bonds if the long term credit
rating of the issuer is  below an investment-grade level and/or the issuer&#146;s bonds are
deemed taxable. </font></TD></TR></TABLE>

<P><table width=600><TR><TD width=10% valign=top><font size=2>
p  </font></TD><TD width=90% valign=top><font size=2> The
letter &#147;p&#148; indicates that the rating is provisional. A  provisional rating
assumes the successful completion of the  project financed by the debt being rated and
indicates that  payment of debt service requirements is largely or entirely  dependent
upon the successful, timely completion of the project.  This rating, however, while
addressing credit quality subsequent  to completion of the project, makes no comment on
the likelihood  of or the risk of default upon failure of such completion. The  investor
should exercise his own judgment with respect to such  likelihood and risk. </font></TD></TR></TABLE>

<P><table width=600><TR><TD width=10% valign=top><font size=2>
*  </font></TD><TD width=90% valign=top><font size=2> Continuance
of the ratings is contingent upon Standard &amp; Poor&#146;s receipt of an executed copy of
the  escrow agreement or closing </font></TD></TR></TABLE>

<P><table width=600><TR><TD width=10% valign=top><font size=2>
r  </font></TD><TD width=90% valign=top><font size=2> The
&#147;r&#148; highlights derivative, hybrid, and certain other  obligations that Standard
&amp; Poor&#146;s believes may experience high  volatility or high variability in expected
returns as a result of  noncredit risks. Examples  </font></TD></TR></TABLE>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp; </font></td><td width=480 align=center><font size="2">
III-4 </font></td><td width=60 align=right><font size="1">&nbsp; </font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<P><table width=600><TR><TD width=10% valign=top><font size=2>
&nbsp;  </font></TD><TD width=90% valign=top><font size=2>of
such obligations are securities with  principal or interest return indexed to equities,
commodities, or  currencies; certain swaps and options, and interest-only and
principal-only mortgage securities. The absence of an &#147;r&#148; symbol  should not be
taken as an indication that an obligation will  exhibit no volatility or variability in
total return. </font></TD></TR></TABLE>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A commercial paper
rating is not a recommendation to purchase or sell a security. The ratings are based on
current information furnished to Standard &amp; Poor&#146;s by the issuer or obtained by
Standard &amp; Poor&#146;s from other sources it considers reliable. The ratings may be
changed, suspended, or withdrawn as a result of changes in, or unavailability of, such
information. </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A Standard &amp;
Poor&#146;s note rating reflects the liquidity factors and market access risks unique to
notes. Notes due in three years or less will likely receive a note rating. Notes maturing
beyond three years will most likely receive a long term debt rating. The following
criteria will be used in making that assessment. </font></td></tr></table>

<p><table width=600><tr>
    <td width=15>&nbsp;</td>
    <td width=573><font size=2>&#151;Amortization schedule&#151;the larger the
      final maturity relative to other maturities, the more likely it will be
      treated as a note. </font></td>
  </tr></table>

<p><table width=600><tr>
    <td width=15>&nbsp;</td>
    <td width=573><font size=2>&#151;Source of payment&#151;the more dependent
      the issue is on the market for its refinancing, the more likely it will
      be treated as a note. </font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Note rating symbols
are as follows: </font></td></tr></table>

<P><table width=600><TR><TD width=10% valign=top><font size=2>
SP-1  </font></TD><TD width=90% valign=top><font size=2> Strong
capacity to pay principal and interest. An issue determined  to possess a very strong
capacity to pay debt service is given a  plus (+) designation. </font></TD></TR></TABLE>

<P><table width=600><TR><TD width=10% valign=top><font size=2>
SP-2  </font></TD><TD width=90% valign=top><font size=2> Satisfactory
capacity to pay principal and interest with some  vulnerability to adverse financial and
economic changes over the  term of the notes. </font></TD></TR></TABLE>

<P><table width=600><TR><TD width=10% valign=top><font size=2>
SP-3  </font></TD><TD width=90% valign=top><font size=2> Speculative
capacity to pay principal and interest.  </font></TD></TR></TABLE>

<p><table width=600><tr><td><font size=2><B>Description of Fitch Ratings&#146;  (&#147;Fitch&#148;)
Investment Grade Bond Ratings</B> </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fitch investment
grade bond ratings provide a guide to investors in determining the credit risk associated
with a particular security. The rating represents Fitch&#146;s assessment of the
issuer&#146;s ability to meet the obligations of a specific debt issue or class of debt in
a timely manner. </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The rating takes
into consideration special features of the issue, its relationship to other obligations of
the issuer, the current and prospective financial condition and operating performance of
the issuer and any guarantor, as well as the economic and political environment that might
affect the issuer&#146;s future financial strength and credit quality. </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fitch ratings do
not reflect any credit enhancement that may be provided by insurance policies or financial
guarantees unless otherwise indicated. </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bonds carrying the
same rating are of similar but not necessarily identical credit quality since the rating
categories do not fully reflect small differences in the degrees of credit risk. </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fitch ratings are
not recommendations to buy, sell, or hold any security. Ratings do not comment on the
adequacy of market price, the suitability of any security for a particular investor, or
the tax-exempt nature or taxability of payments made in respect of any security. </font></td></tr></table>


<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fitch ratings are
based on information obtained from issuers, other obligors, underwriters, their experts,
and other sources Fitch believes to be reliable. Fitch does not audit or verify the truth
or accuracy of such information. Ratings may be changed, suspended, or withdrawn as a
result of changes in, or the unavailability of, information or for other reasons. </font></td></tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp; </font></td><td width=480 align=center><font size="2">
III-5 </font></td><td width=60 align=right><font size="1">&nbsp; </font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<P><table width=600><TR><TD width=10% valign=top><font size=2>
AAA  </font></TD><TD width=90% valign=top><font size=2> Bonds
considered to be investment grade and of the highest credit  quality. The obligor has an
exceptionally strong ability to pay  interest and repay principal, which is unlikely to
be affected by  reasonably foreseeable events. </font></TD></TR></TABLE>

<P><table width=600><TR><TD width=10% valign=top><font size=2>
AA  </font></TD><TD width=90% valign=top><font size=2> Bonds
considered to be investment grade and of very high credit  quality. The obligor&#146;s ability
to pay interest and repay principal  is very strong, although not quite as strong as
bonds rated &#147;AAA.&#148;  Because bonds rated in the &#147;AAA&#148; and
&#147;AA&#148; categories are not  significantly vulnerable to foreseeable future
developments, short  term debt of these issuers is generally rated &#147;F-1+.&#148; </font></TD></TR></TABLE>

<P><table width=600><TR><TD width=10% valign=top><font size=2>
A  </font></TD><TD width=90% valign=top><font size=2> Bonds
considered to be investment grade and of high credit  quality. The obligor&#146;s ability to
pay interest and repay principal  is considered to be strong, but may be more vulnerable
to adverse  changes in economic conditions and circumstances than bonds with  higher
ratings. </font></TD></TR></TABLE>

<P><table width=600><TR><TD width=10% valign=top><font size=2>
BBB  </font></TD><TD width=90% valign=top><font size=2> Bonds
considered to be investment grade and of satisfactory-credit  quality. The obligor&#146;s
ability to pay interest and repay principal  is considered to be adequate. Adverse
changes in economic  conditions and circumstances, however, are more likely to have
adverse impact on these bonds, and therefore impair timely  payment. The likelihood that
the ratings of these bonds will fall  below investment grade is higher than for bonds
with higher  ratings. </font></TD></TR></TABLE>

<p><table width=600><tr><td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Plus</I> (+) or <I>Minus</I>
(-): Plus and minus signs are used with a rating symbol to indicate the relative position
of a credit within the rating category. Plus and minus signs, however, are not used in the
&#147;AAA&#148; category. </font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>Description of Fitch&#146;s Speculative Grade Bond
Ratings</B> </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fitch speculative
grade bond ratings provide a guide to investors in determining the credit risk associated
with a particular security. The ratings (&#147;BB&#148; to &#147;C&#148;) represent
Fitch&#146;s assessment of the likelihood of timely payment of principal and interest in
accordance with the terms of obligation for bond issues not in default. For defaulted
bonds, the rating (&#147;DDD&#148; to &#147;D&#148;) is an assessment of the ultimate
recovery value through reorganization or liquidation. The rating takes into consideration
special features of the issue, its relationship to other obligations of the issuer, the
current and prospective financial condition and operating performance of the issuer and
any guarantor, as well as the economic and political environment that might affect the
issuer&#146;s future financial strength. </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bonds that have the
rating are of similar but not necessarily identical credit quality since rating categories
cannot fully reflect the differences in degrees of credit risk. </font></td></tr></table>

<P><table width=600><TR><TD width=10% valign=top><font size=2>
BB  </font></TD><TD width=90% valign=top><font size=2> Bonds
are considered speculative. The obligor&#146;s ability to  pay interest and repay principal
may be affected over time  by adverse economic changes. However, business and  financial
alternatives can be identified which could assist  the obligor in satisfying its debt
service requirements. </font></TD></TR></TABLE>

<P><table width=600><TR><TD width=10% valign=top><font size=2>
B  </font></TD><TD width=90% valign=top><font size=2> Bonds
are considered highly speculative. While bonds in  this class are currently meeting debt
service requirements,  the probability of continued timely payment of principal  and
interest reflects the obligor&#146;s limited margin of  safety and the need for reasonable
business and economic  activity throughout the life of the issue. </font></TD></TR></TABLE>

<P><table width=600><TR><TD width=10% valign=top><font size=2>
CCC  </font></TD><TD width=90% valign=top><font size=2> Bonds
have certain identifiable characteristics which, if  not remedied, may lead to default.
The ability to meet  obligations requires an advantageous business and economic
environment. </font></TD></TR></TABLE>

<P><table width=600><TR><TD width=10% valign=top><font size=2>
CC  </font></TD><TD width=90% valign=top><font size=2> Bonds
are minimally protected. Default in payment of  interest and/or principal seems probable
over time. </font></TD></TR></TABLE>

<P><table width=600><TR><TD width=10% valign=top><font size=2>
C  </font></TD><TD width=90% valign=top><font size=2>Bonds
are in imminent default in payment of interest or principal.  </font></TD></TR></TABLE>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp; </font></td><td width=480 align=center><font size="2">
III-6 </font></td><td width=60 align=right><font size="1">&nbsp; </font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<P><table width=600><TR>
    <TD width=10% valign=top><font size=2> D<br>
      DD<br>
      DDD  </font></TD>
    <TD width=90% valign=top><font size=2>Bonds are in default on interest and/or
      principal payments. Such bonds are extremely speculative and should be valued
      on the basis of their ultimate recovery value in liquidation or reorganization
      of the obligor. &#147;DDD&#148; represents the highest potential for recovery
      on these bonds, and &#147;D&#148; represents the lowest potential for recovery. </font></TD>
  </TR></TABLE>

<P><table width=600><TR><TD width=10% valign=top><font size=2>
&nbsp;  </font></TD><TD width=90% valign=top> <FONT SIZE="2"><I>Plus</I>
(+) or <I>Minus</I> (-): Plus and minus signs are used with a rating symbol to indicate the
relative position of a credit within the rating category. Plus and minus signs, however,
are not used in the &#147;DDD,&#148; &#147;DD,&#148; or &#147;D&#148; categories. </font></TD></TR></TABLE>

<p><table width=600><tr><td><font size=2><B>Description of Fitch&#146;s Short term Ratings</B> </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fitch&#146;s short
term ratings apply to debt obligations that are payable on demand or have original
maturities of up to three years, including commercial paper, certificates of deposit,
medium-term notes, and investment notes. </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The short term
rating places greater emphasis than a long term rating on the existence of liquidity
necessary to meet the issuer&#146;s obligations in a timely manner. </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fitch short term
ratings are as follows: </font></td></tr></table>
<P>
<P><table width=600><TR>
    <TD width=14% valign=top><font size=2> F-1+  </font></TD>
    <TD width=86% valign=top><font size=2> Exceptionally Strong Credit Quality.
      Issues assigned this rating are regarded as having the strongest degree
      of assurance for timely payment. </font></TD>
  </TR></TABLE>

<P><table width=600><TR>
    <TD width=14% valign=top><font size=2> F-1  </font></TD>
    <TD width=86% valign=top><font size=2> Very Strong Credit Quality. Issues
      assigned this rating reflect an assurance of timely payment only slightly
      less in degree than issues rated &#147;F-1+.&#148; </font></TD>
  </TR></TABLE>

<P><table width=600><TR>
    <TD width=14% valign=top><font size=2> F-2  </font></TD>
    <TD width=86% valign=top><font size=2> Good Credit Quality. Issues assigned
      this rating have a satisfactory degree of assurance for timely payment,
      but the margin of safety is not as great as for issues assigned &#147;F-1+&#148;
      and &#147;F-1&#148; ratings. </font></TD>
  </TR></TABLE>

<P><table width=600><TR>
    <TD width=14% valign=top><font size=2> F-3  </font></TD>
    <TD width=86% valign=top><font size=2> Fair Credit Quality. Issues assigned
      this rating have characteristics suggesting that the degree of assurance
      for timely payment is adequate; however, near-term adverse changes could
      cause these securities to be rated below investment grade. </font></TD>
  </TR></TABLE>

<P><table width=600><TR>
    <TD width=14% valign=top><font size=2> F-S  </font></TD>
    <TD width=86% valign=top><font size=2> Weak Credit Quality. Issues assigned
      this rating have characteristics suggesting a minimal degree of assurance
      for timely payment and are vulnerable to near-term adverse changes in financial
      and economic conditions. </font></TD>
  </TR></TABLE>

<P><table width=600><TR>
    <TD width=14% valign=top><font size=2> D  </font></TD>
    <TD width=86% valign=top><font size=2> Default. Issues assigned this rating
      are in actual or imminent payment default. </font></TD>
  </TR></TABLE>

<P><table width=600><TR>
    <TD width=14% valign=top><font size=2> LOC  </font></TD>
    <TD width=86% valign=top><font size=2> The symbol &#147;LOC&#148; indicates
      that the rating is based on a letter of credit issued by a commercial bank. </font></TD>
  </TR></TABLE>

<P><table width=600><TR>
    <TD width=14% valign=top><font size=2> NR  </font></TD>
    <TD width=86% valign=top><font size=2>Indicates that Fitch does not rate the
      specific issue. </font></TD>
  </TR></TABLE>

<P><table width=600><TR>
    <TD width=14% valign=top><font size=2> Conditional  </font></TD>
    <TD width=86% valign=top><font size=2> A conditional rating is premised on
      the successful completion of a project or the occurrence of a specific event. </font></TD>
  </TR></TABLE>

<P><table width=600><TR>
    <TD width=14% valign=top><font size=2> Suspended  </font></TD>
    <TD width=86% valign=top><font size=2> A rating is suspended when Fitch deems
      the amount of information available from the issuer to be inadequate for
      rating purposes. </font></TD>
  </TR></TABLE>

<P><table width=600><TR>
    <TD width=14% valign=top><font size=2> Withdrawn  </font></TD>
    <TD width=86% valign=top><font size=2> A rating will be withdrawn when an
      issue matures or is called or refinanced and, at Fitch&#146;s discretion,
      when an issuer fails to furnish proper and timely information. </font></TD>
  </TR></TABLE>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp; </font></td><td width=480 align=center><font size="2">
III-7 </font></td><td width=60 align=right><font size="1">&nbsp; </font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<!-- MARKER PAGE="sheet: 33; page: 33" -->

<P><table width=600><TR>
    <TD width=15% valign=top><font size=2> FitchAlert  </font></TD>
    <TD width=85% valign=top><font size=2> Ratings are placed on FitchAlert to
      notify investors of an occurrence that is likely to result in a rating change
      and the likely direction of such change. These are designated as &#147;Positive,&#148;
      indicating a potential upgrade, &#147;Negative,&#148; for potential downgrade,
      or &#147;Evolving,&#148; where ratings may be raised or lowered. FitchAlert
      is relatively short term, and should be resolved within 12 months. </font></TD>
  </TR></TABLE>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ratings Outlook:
An outlook is used to describe the most likely  direction of any rating change over the
intermediate term. It is described as  &#147;Positive&#148; or &#147;Negative.&#148; The
absence of a designation indicates a stable  outlook. </font></td></tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp; </font></td><td width=480 align=center><font size="2">
III-8 </font></td><td width=60 align=right><font size="1">&nbsp; </font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<!-- MARKER PAGE="sheet: 34; page: 34" -->

<p><table width=600><tr><td align=right><font size=2><B>EXHIBIT IV</B> </font></td></tr></table>

<p><table width=600><tr><td  align=center><font size=2><B>PORTFOLIO INSURANCE</B> </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Set forth below is
further information with respect to the insurance policies (the &#147;Policies&#148;) that
MuniYield Insured Fund, Inc. and MuniInsured Fund, Inc. (each, a &#147;Fund&#148; and
collectively, the &#147;Funds&#148;) may obtain from several insurance companies with
respect to insured Municipal Bonds held by the Fund. The Funds have no obligation to
obtain any such Policies, and the terms of any Policies actually obtained may vary
significantly from the terms discussed below. </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In determining
eligibility for insurance, insurance companies will apply their own standards. These
standards correspond generally to the standards such companies normally use in
establishing the insurability of new issues of Municipal Bonds and are not necessarily the
criteria that would be used in regard to the purchase of such bonds by a Fund. The
Policies do not insure (i) municipal securities ineligible for insurance and (ii)
municipal securities no longer owned by a Fund. </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Policies do not
guarantee the market value of the insured Municipal Bonds or the value of the shares of a
Fund. In addition, if the provider of an original issuance insurance policy is unable to
meet its obligations under such policy or if the rating assigned to the insurance
claims-paying ability of any such insurer deteriorates, the insurance company will not
have any obligation to insure any issue held by the Fund that is adversely affected by
either of the above described events. In addition to the payment of premium, the policies
may require that a Fund notify the insurance company as to all Municipal Bonds in a
Fund&#146;s portfolio and permit the insurance company to audit their records. The
insurance premiums will be payable monthly by a Fund in accordance with a premium schedule
to be furnished by the insurance company at the time the Policies are issued. Premiums are
based upon the amounts covered and the composition of the portfolio. </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Funds will seek
to utilize insurance companies that have insurance claims-paying ability ratings of AAA
from Standard &amp; Poor&#146;s (&#147;S&amp;P&#148;) or Fitch, Inc. (&#147;Fitch&#148;)
or Aaa from Moody&#146;s Investors Service, Inc. (&#147;Moody&#146;s&#148;). No assurance
can be given, however, that insurance from insurance carriers meeting these criteria will
be at all times available. </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An S&amp;P
insurance claims-paying ability rating is an assessment of an operating insurance
company&#146;s financial capacity to meet obligations under an insurance policy in
accordance with the terms. An insurer with an insurance claims-paying ability rating of
AAA has the highest rating assigned by S&amp;P. Capacity to honor insurance contracts is
considered by S&amp;P to be extremely strong and highly likely to remain so over a long
period of time. A Fitch insurance claims-paying ability rating provides an assessment of
an insurance company&#146;s financial strength and, therefore, its ability to pay policy
and contract claims under the terms indicated. An insurer with an insurance claims-paying
ability rating of AAA has the highest rating assigned by Fitch. The ability to pay claims
is adjudged by Fitch to be extremely strong for insurance companies with this highest
rating. In the opinion of Fitch, foreseeable business and economic risk factors should not
have any material adverse impact on the ability of these insurers to pay claims. In
Fitch&#146;s opinion, profitability, overall balance sheet strength, capitalization and
liquidity are all at very secure levels and are unlikely to be affected by potential
adverse underwriting, investment or cyclical events. A Moody&#146;s insurance
claims-paying ability rating is an opinion of the ability of an insurance company to repay
punctually senior policyholder obligations and claims. An insurer with an insurance
claims-paying ability rating of Aaa is considered by Moody&#146;s to be of the best
quality. In the opinion of Moody&#146;s, the policy obligations of an insurance company
with an insurance claims-paying ability rating of Aaa carry the smallest degree of credit
risk and, while the financial strength of these companies is likely to change, such
changes as can be visualized are most unlikely to impair the company&#146;s fundamentally
strong position. </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An insurance
claims-paying ability rating of S&amp;P, Fitch or Moody&#146;s does not constitute an
opinion on any specific contract in that such an opinion can only be rendered upon the
review of the specific insurance contract. Furthermore, an insurance claims-paying ability
rating does not take into account deductibles, surrender or cancellation penalties or the
timeliness of payment; nor does it address the ability of a company to meet nonpolicy
obligations (i.e., debt contracts). </font></td></tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp; </font></td><td width=480 align=center><font size="2">
IV-1 </font></td><td width=60 align=right><font size="1">&nbsp; </font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<!-- MARKER PAGE="sheet: 35; page: 35" -->

<p><table width=600><tr><td><font size=2>The assignment of ratings by S&amp;P, Fitch or
Moody&#146;s to debt issues that are fully  or partially supported by insurance policies,
contracts or guarantees is a  separate process from the determination of claims-paying
ability ratings. The  likelihood of a timely flow of funds from the insurer to the
trustee for the  bondholders is a key element in the rating determination for such debt
issues. </font></td></tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp; </font></td><td width=480 align=center><font size="2">
IV-2 </font></td><td width=60 align=right><font size="1">&nbsp; </font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<!-- MARKER PAGE="sheet: 36; page: 36" -->

<p><table width=600><tr>
    <td align=right><font size=2><B>Exhibit VI</B> </font></td>
  </tr></table>

<p><table width=600><tr><td  align=center><font size=2><B>CHARTER OF THE NOMINATING
COMMITTEE</B> </font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>ORGANIZATION</B> </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Nominating
Committee (the &#147;Committee&#148;) of the Board of Directors/Trustees  for the
registered investment companies (each a &#147;Fund&#148; and collectively, the
&#147;Funds&#148;) listed on Exhibit A attached hereto shall be composed solely of
Directors/Trustees who are not &#147;interested persons&#148; of the Fund as defined in
Section 2(a)(19) of the Investment Company Act of 1940, as amended (the &#147;1940
Act&#148;), and who are &#147;independent&#148; as defined in the New York Stock Exchange
and  the American Stock Exchange (each, an &#147;Exchange&#148;) listing standards (if
applicable) (&#147;Independent Directors&#148;). The Board of Directors/Trustees of the
Fund (the &#147;Board&#148;) shall appoint the members of the Committee (which may or may
not be all of the Independent Directors) and shall designate the Chairman of the
Committee. The Committee shall have authority to retain outside counsel and  other
advisors the Committee deems appropriate and shall have the sole authority  to approve
the compensation and other terms of their retention. </font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>RESPONSIBILITIES</B> </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Committee
shall identify individuals qualified to serve as Independent  Directors of the Fund and
shall recommend its nominees for consideration by the  full Board. </font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>IDENTIFICATION AND EVALUATION OF POTENTIAL
NOMINEES</B> </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In identifying and
evaluating a person as a potential nominee to serve as an  Independent Director of the
Fund, the Committee should consider among other  factors it may deem relevant: </font></td></tr></table>

<table width=600>
  <tr>
    <td width=3%></td>
    <td width=1% valign=top><font size=3>&#149; </font></td>
    <td width=3%></td>
    <td width=93%><font size=2>the
contribution which the person can make to the Board, with  consideration being given to
the person&#146;s business and professional  experience, education and such other factors as
the Committee may  consider relevant; </font></td></tr></table>

<table width=600>
  <tr>
    <td width=3%></td>
    <td width=1% valign=top><font size=3>&#149; </font></td>
    <td width=3%></td>
    <td width=93%><font size=2>the
character and integrity of the person; </font></td></tr></table>

<table width=600>
  <tr>
    <td width=3%></td>
    <td width=1% valign=top><font size=3>&#149; </font></td>
    <td width=3%></td>
    <td width=93%><font size=2>whether
or not the person is an &#147;interested person&#148; as defined in the  1940 Act and
whether the person is otherwise qualified under applicable  laws and regulations to serve
as a Director or Independent Director of  the Fund; </font></td></tr></table>

<table width=600>
  <tr>
    <td width=3%></td>
    <td width=1% valign=top><font size=3>&#149; </font></td>
    <td width=3%></td>
    <td width=93%><font size=2>whether
or not the person has any relationships that might impair his  or her independence, such
as any business, charitable, financial or  family relationships with Fund management, the
investment adviser or  manager of the Fund, Fund service providers or their affiliates; </font></td></tr></table>

<table width=600>
  <tr>
    <td width=3%></td>
    <td width=1% valign=top><font size=3>&#149; </font></td>
    <td width=3%></td>
    <td width=93%><font size=2>whether
or not the person is financially literate pursuant to the applicable Exchange&#146;s audit
committee  membership standards; </font></td></tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp; </font></td>
    <td width=480 align=center><font size="2"> VI-1 </font></td>
    <td width=60 align=right><font size="1">&nbsp; </font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 37; page: 37" -->

<BR><BR><table width=600>
  <tr>
    <td width=3%></td>
    <td width=1% valign=top><font size=3>&#149; </font></td>
    <td width=3%></td>
    <td width=93%><font size=2>whether
or not the person serves on boards of, or is otherwise  affiliated with, competing
financial service organizations or their  related investment company complexes; </font></td></tr></table>

<table width=600>
  <tr>
    <td width=3%></td>
    <td width=1% valign=top><font size=3>&#149; </font></td>
    <td width=3%></td>
    <td width=93%><font size=2>whether
or not the person is willing to serve, and willing and able to commit the time necessary
for the  performance of the duties of a Director of the Fund; </font></td></tr></table>

<table width=600>
  <tr>
    <td width=3%></td>
    <td width=1% valign=top><font size=3>&#149; </font></td>
    <td width=3%></td>
    <td width=93%><font size=2>whether
or not the selection and nomination of the person would be consistent with the
requirements of  the Fund&#146;s retirement policy. </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;While the
Committee is solely responsible for the selection and nomination of  the Fund&#146;s
Independent Directors, the Committee may consider nominations for the  office of Director
made by Fund stockholders or by management as it deems  appropriate. Stockholders who
wish to recommend a nominee should send  nominations to the Secretary of the Fund which
include biographical information  and set forth the qualifications of the proposed
nominee. </font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>QUORUM</B> </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A majority of the
members of the Committee shall constitute a quorum for the  transaction of business, and
the act of a majority of the members of the  Committee present at any meeting at which
there is quorum shall be the act of  the Committee. </font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>NOMINATION OF DIRECTORS</B> </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;After a
determination by the Committee that a person should be nominated as an  Independent
Director of the Fund, the Committee shall present its recommendation  to the full Board
for its consideration and, where appropriate, to the  Independent Directors. </font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>MEETINGS</B> </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Committee may
meet either on its own or in conjunction with meetings of the  Board. Meetings of the
Committee may be held in person, video conference or by  conference telephone. The
Committee may take action by unanimous written consent  in lieu of a meeting. </font></td></tr></table>

<p><table width=600><tr><td><font size=2>Adopted:  _________, 2004 </font></td></tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp; </font></td>
    <td width=480 align=center><font size="2"> VI-2 </font></td>
    <td width=60 align=right><font size="1">&nbsp; </font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;







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<!-- MARKER PAGE="sheet: 38; page: 38" -->


<p>
<p><table width=600><tr>
    <td align=right><font size=2><B><font size="3">COMMON STOCK </font></B> </font></td>
  </tr></table>

<p>
<table width=600>
  <tr>
    <td  align=center><font size=2><B><font size="3">MUNIINSURED FUND, INC. </font></B> </font></td>
  </tr>
</table>
<table width=600>
  <tr>
    <td  align=center><font size=2><B><font size="3">P.O. BOX 9011 </font></B> </font></td>
  </tr>
</table>
<table width=600>
  <tr>
    <td  align=center><font size=2><B><font size="3">PRINCETON, NEW JERSEY 08543-9011 </font></B> </font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td  align=center><font size=2><B><font size="3">PROXY </font></B> </font></td>
  </tr>
</table>

<p><table width=600><tr>
    <td  align=center><font size=2><B><font size="3">This proxy is solicited on
      behalf of the Board of Directors </font></B> </font></td>
  </tr></table>

<p><table width=600><tr>
    <td><font size=2>The undersigned hereby appoints Terry K. Glenn, Donald C.
      Burke and Phillip S. Gillespie as proxies, each with the power to appoint
      his substitute, and hereby authorizes each of them to represent and to vote,
      as designated on the reverse hereof, all of the shares of common stock of
      MuniInsured Fund, Inc. (the &#147;Fund&#148;) held of record by the undersigned
      on March 12, 2004 at the Annual Meeting of Stockholders of the Fund to be
      held on May 12, 2004, or any adjournment thereof. </font></td>
  </tr></table>

<p>
<table width=600>
  <tr>
    <td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td><FONT SIZE="2"><B>This proxy, when properly executed, will be voted in
      the manner herein directed by the undersigned stockholder. If no direction
      is made, this proxy will be voted &#147;FOR&#148; Item 1 and Item 2.</B> </font></td>
  </tr>
</table>

<p><table width=600><tr>
    <td><font size=2>By signing and dating the reverse side of this card, you
      authorize the proxies to vote the proposals as marked, or if not marked,
      to vote &#147;FOR&#148; the proposals, and to use their discretion to vote
      for any other matter as may properly come before the meeting or any adjournment
      thereof. If you do not intend to personally attend the meeting, please complete
      and return the card at once in the enclosed envelope. </font></td>
  </tr></table>

<p><table width=600><tr>
    <td><font size=2>You may also vote your shares by touch-tone phone by calling
      1-800-________ or through the Internet at www.proxyvote.com. </font></td>
  </tr></table>

<p><table width=600><tr>
    <td align=right><font size="1">(Continued and to be signed on the reverse
      side)  </font></td>
  </tr></table>





<br>
<hr size=5 noshade width=600 align=LEFT>
<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 39; page: 39" -->
<p>
<p><table width=600><tr>
    <td><FONT SIZE="2">Please mark boxes &#149; or |X| in blue or black ink. </font></td>
  </tr></table>

<P>
<table width=600>
  <tr valign="top">
    <td><font size="2">1.  </font></td>
    <td><font size="2">Election of Class III Directors to Serve <br>
      until the 2007 Annual Meeting </font></td>
    <td align="center"><b><font size=2>For All <br>
      |_|  </font></b></td>
    <td align="center"><b><font size=2>Withhold All <br>
      |_|  </font></b></td>
    <td align="center"><b><font size=2>For All Except <br>
      |_|  </font></b></td>
  </tr>
</table>

<p>
<p>
<table width=600>
  <tr>
    <td>&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td><font size=2><B><font size="1"><i>To withhold authority to vote for certain
      nominees only, mark &#147;For All Except&#148; and write each such nominee&#146;s
      number on the line below. </i> </font></B> </font></td>
  </tr>
</table>


<table width=600>
  <tr>
    <td width=4% valign=top>&nbsp;</td>
    <td width=96%><font size="1">Director Nominee<br>
       </font></td>
  </tr>
  <tr>
    <td width=4% valign=top><font size="2">&nbsp;  </font></td>
    <td width=96%><font size="1">01) Herbert I. London  </font></td>
  </tr>
</table>

<table width=600>
  <tr>
    <td width=4% valign=top><font size="2">&nbsp;  </font></td>
    <td width=96%><font size="1">02) Andr&#233; F. Perold  </font></td>
  </tr></table>

<table width=600>
  <tr>
    <td width=4% valign=top><font size="2">&nbsp; </font></td>
    <td width=96%><font size="1">03) Robert S. Salomon, Jr. </font></td>
    <td width=96%>__________________________________</td>
  </tr>
</table>

<P>
<table width=600>
  <tr>
    <td width=4% valign="top"><font size="2">2.  </font></td>
    <td width=96%><font size="2"> To consider and act upon a proposal to approve
      the Agreement and Plan of Reorganization between the Fund and MuniYield
      Insured Fund, Inc. </font></td>
  </tr>
  <tr>
    <td width=4% valign="top">&nbsp;</td>
    <td width=96%>&nbsp;</td>
  </tr>
  <tr>
    <td width=4% valign="top">&nbsp;</td>
    <td width=96%><b><font size="2">FOR &nbsp;&nbsp;|_|&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;AGAINST
      &nbsp;&nbsp;|_|&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ABSTAIN&nbsp;&nbsp;|_| </font></b></td>
  </tr>
</table>

<P>
<P><table width=600><tr>
    <td width=4% valign=top><font size="2">&nbsp;3.  </font></td>
    <td width=96%><font size="2"> In the discretion of such proxies, upon such
      other business as properly may come before the meeting or any adjournment
      thereof. </font></td>
  </tr></table>

<p>
<table width=600>
  <tr>
    <td width=300>&nbsp;</td>
    <td width=300><font size="1">Please sign exactly as name appears hereon. When
      shares are held by joint tenants, both should sign. When signing as attorney
      or as executor, administrator, trustee or guardian, please give full title
      as such. If a corporation, please sign in full corporate name by president
      or other authorized officer. If a partnership, please sign in partnership
      name by authorized person. </font></td>
  </tr>
  <tr>
    <td width=300>&nbsp;</td>
    <td width=300>&nbsp;</td>
  </tr>
  <tr>
    <td width=300>&nbsp;</td>
    <td width=300><font size="1">Dated:_________________________________________________<br>
      <br>
      X _____________________________________________________<br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Signature <br>
      <br>
      <br>
      X _____________________________________________________<br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Signature, if held jointly </font></td>
  </tr>
</table>

<p>
<p><table width=600>
  <tr align="center">
    <td><font size=2><B><font size="3">Sign, Date, and Return the Proxy Card Promptly
      Using the Enclosed Envelope. </font></B> </font></td>
  </tr></table>





<br>
<hr size=5 noshade width=600 align=LEFT>
<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 40; page: 40" -->
<p><table width=600><tr><td  align=center><font size=2><B>PART C</B> </font></td></tr></table>

<table width=600><tr><td  align=center><font size=2><B>OTHER INFORMATION</B> </font></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2"><B>Item 15.  <I>Indemnification.</I></B> </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 2-418 of
the General Corporation Law of the State of Maryland, Article VI of the Registrant&#146;s
Articles of Incorporation, filed as Exhibit 1(a) hereto; Article VI of the
Registrant&#146;s By-Laws, filed as Exhibit 2 hereto, and the Investment Advisory
Agreement, a form of which is filed as Exhibit 6 hereto, provide for indemnification. </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Insofar as
indemnification for liabilities arising under the Securities Act of 1933, as amended (the
&#147;1933 Act&#148;), may be provided to directors, officers and controlling persons of
the Registrant, pursuant to the foregoing provisions or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in connection with any
successful defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the 1933 Act and will
be governed by the final adjudication of such issue. </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reference is made
to (i) Section 6 of the Purchase Agreement relating to the Registrant&#146;s Common Stock,
a form of which is filed as Exhibit 7(a) hereto, and (ii) Section 7 of the Purchase
Agreement relating to the Registrant&#146;s AMPS, a form of which is filed as an Exhibit
7(b) hereto, for provisions relating to the indemnification of the underwriter. </font></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2"><B>Item 16.  <I>Exhibits.</I></B> </font></td></tr></table>

<br>
<table width=600><tr><td width=10% align=center valign=top><font size="2">1(a)  </font></td><td width=5% align=center valign=top>&#151;<font size="2"> </font></td>
    <td width=85%><font size="2"> Articles of Incorporation of the Registrant,
      dated _________________.(b) </font></td>
  </tr></table>

<table width=600><tr>
    <td width=10% align=center valign=top><font size="2">&nbsp;&nbsp;(b)  </font></td>
    <td width=5% align=center valign=top>&#151;<font size="2"> </font></td>
    <td width=85%><font size="2"> Articles of Amendment to the Articles of Incorporation
      of the Registrant, dated _________________.(b) </font></td>
  </tr></table>

<table width=600><tr>
    <td width=10% align=center valign=top><font size="2">2&nbsp;&nbsp;&nbsp;&nbsp;
      </font></td>
    <td width=5% align=center valign=top>&#151;<font size="2"> </font></td>
    <td width=85%><font size="2"> By-Laws of the Registrant.(b) </font></td>
  </tr></table>

<table width=600><tr>
    <td width=10% align=center valign=top><font size="2">3&nbsp;&nbsp;&nbsp;&nbsp;
      </font></td>
    <td width=5% align=center valign=top>&#151;<font size="2"> </font></td><td width=85%><font size="2"> Not
Applicable. </font></td></tr></table>

<table width=600><tr>
    <td width=10% align=center valign=top><font size="2">4&nbsp;&nbsp;&nbsp;&nbsp;
      </font></td>
    <td width=5% align=center valign=top>&#151;<font size="2"> </font></td><td width=85%><font size="2"> Form
of Agreement  and Plan of  Reorganization  between the  Registrant  and  MuniYield
Insured  Fund,  Inc.(included  in Exhibit II to the Joint Proxy  Statement  and
Prospectus  contained in  this Registration Statement) </font></td></tr></table>

<table width=600><tr><td width=10% align=center valign=top><font size="2">5(a)  </font></td><td width=5% align=center valign=top>&#151;<font size="2"> </font></td><td width=85%><font size="2"> Copies
of instruments  defining the rights of stockholders,  including the relevant  portions of
the Articles of Incorporation and the By-Laws of the Registrant.(a) </font></td></tr></table>

<table width=600><tr>
    <td width=10% align=center valign=top><font size="2">&nbsp;&nbsp;(b)  </font></td>
    <td width=5% align=center valign=top>&#151;<font size="2"> </font></td><td width=85%><font size="2"> Form
of specimen certificate for the common stock of the Registrant.(b) </font></td></tr></table>

<table width=600><tr>
    <td width=10% align=center valign=top><font size="2">6&nbsp;&nbsp;&nbsp;&nbsp;
      </font></td>
    <td width=5% align=center valign=top>&#151;<font size="2"> </font></td><td width=85%><font size="2"> Form
of Investment Advisory Agreement between Registrant and Fund Asset Management, L.P.(b) </font></td></tr></table>

<table width=600><tr><td width=10% align=center valign=top><font size="2">7(a)  </font></td><td width=5% align=center valign=top>&#151;<font size="2"> </font></td><td width=85%><font size="2"> Form
of Purchase Agreement for the common stock.(b) </font></td></tr></table>

<table width=600><tr>
    <td width=10% align=center valign=top><font size="2">&nbsp;&nbsp;(b)  </font></td>
    <td width=5% align=center valign=top>&#151;<font size="2"> </font></td><td width=85%><font size="2"> Form
of Merrill Lynch Standard Dealer Agreement.(b)  </font></td></tr></table>

<table width=600><tr>
    <td width=10% align=center valign=top><font size="2">8&nbsp;&nbsp;&nbsp;&nbsp;
      </font></td>
    <td width=5% align=center valign=top>&#151;<font size="2"> </font></td><td width=85%><font size="2"> Not
applicable. </font></td></tr></table>

<table width=600><tr>
    <td width=10% align=center valign=top><font size="2">9&nbsp;&nbsp;&nbsp;&nbsp;
      </font></td>
    <td width=5% align=center valign=top>&#151;<font size="2"> </font></td><td width=85%><font size="2"> Custody
Agreement  between  the  Registrant  and State  Street Bank and Trust  Company
(&#147;State  Street&#148;).(b) </font></td></tr></table>

<table width=600><tr>
    <td width=10% align=center valign=top><font size="2">10&nbsp;&nbsp;&nbsp;&nbsp;
      </font></td>
    <td width=5% align=center valign=top>&#151;<font size="2"> </font></td><td width=85%><font size="2"> Not
applicable. </font></td></tr></table>

<table width=600><tr>
    <td width=10% align=center valign=top><font size="2">11&nbsp;&nbsp;&nbsp;&nbsp;
      </font></td>
    <td width=5% align=center valign=top>&#151;<font size="2"> </font></td><td width=85%><font size="2"> Opinion
of Sidley Austin Brown &amp; Wood <font size=1>LLP </font>, counsel for the Registrant.(b) </font></td></tr></table>

<table width=600><tr>
    <td width=10% align=center valign=top><font size="2">12 &nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td width=5% align=center valign=top>&#151;<font size="2"> </font></td><td width=85%><font size="2"> Tax
Opinion of Sidley Austin Brown &amp; Wood <font size=1>LLP </font>, tax counsel for the  Registrant.(b)  </font></td></tr></table>

<table width=600><tr><td width=10% align=center valign=top><font size="2">13(a)  </font></td><td width=5% align=center valign=top>&#151;<font size="2"> </font></td>
    <td width=85%><font size="2"> Form of Registrar, Transfer Agency and Service
      Agreement between the Registrant and Equiserve Trust Company, I.A.(c) </font></td>
  </tr></table>

<table width=600><tr>
    <td width=10% align=center valign=top><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;(b)
       </font></td>
    <td width=5% align=center valign=top>&#151;<font size="2"> </font></td><td width=85%><font size="2"> Form
of Agreement of Resignation, Appointment and Acceptance among  the Registrant, IBJ
Whitehall Banks Trust Company and BONY.(c) </font></td></tr></table>

<table width=600><tr>
    <td width=10% align=center valign=top><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;(c)
       </font></td>
    <td width=5% align=center valign=top>&#151;<font size="2"> </font></td><td width=85%><font size="2"> Form
of Broker-Dealer Agreement.(b)  </font></td></tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp; </font></td><td width=480 align=center><font size="2">
C-1 </font></td><td width=60 align=right><font size="1">&nbsp; </font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT>
<p>&nbsp; <!-- *************************************************************************** -->
  <!-- MARKER PAGE="sheet: 41; page: 41" --> <br>
  <br>

<table width=600><tr>
    <td width=10% align=center valign=top><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;(d)
       </font></td>
    <td width=5% align=center valign=top>&#151;<font size="2"> </font></td><td width=85%><font size="2"> Form
of Letter of  Representations.(b) </font></td></tr></table>

<table width=600><tr>
    <td width=10% align=center valign=top><font size="2">14(a)  </font></td>
    <td width=5% align=center valign=top>&#151;<font size="2"> </font></td>
    <td width=85%><font size="2"> Consent of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, independent auditors for the Registrant.
      (b) </font></td>
  </tr></table>

<table width=600><tr>
    <td width=10% align=center valign=top><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;(b)
       </font></td>
    <td width=5% align=center valign=top>&#151;<font size="2"> </font></td><td width=85%><font size="2"> Consent
of  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,  independent  auditors  for  MuniYield  Insured  Fund, Inc. (b) </font></td></tr></table>

<table width=600><tr>
    <td width=10% align=center valign=top><font size="2">15 &nbsp;&nbsp;&nbsp;&nbsp;
      </font></td>
    <td width=5% align=center valign=top>&#151;<font size="2"> </font></td><td width=85%><font size="2"> Not
applicable. </font></td></tr></table>

<table width=600><tr>
    <td width=10% align=center valign=top><font size="2">16&nbsp;&nbsp;&nbsp;&nbsp;
      </font></td>
    <td width=5% align=center valign=top>&#151;<font size="2"> </font></td>
    <td width=85%><font size="2"> Power of Attorney.</font></td>
  </tr></table>

<table width=600><tr>
    <td width=10% align=center valign=top><font size="2">17&nbsp;&nbsp;&nbsp;&nbsp;
      </font></td>
    <td width=5% align=center valign=top>&#151;<font size="2"> </font></td>
    <td width=85%><font size="2"> None.</font></td>
  </tr></table>

<table width=600><tr><td><hr size=1 noshade align=left  width=75></td></tr></table>

<table width=600><tr><td width=4% align=right valign=top><font size="1">(a)  </font></td><td width=2%><font size="1"> </font></td><td width=94%><font size="1"> Reference
is made to Article V, Article VI (sections 2, 3, 4, 5 and 6),  Article VII, Article VIII,
Article X, Article XI, Article XII and Article  XIII of the Registrant&#146;s Articles of
Incorporation, filed as Exhibit 1(a)  hereto, and to Article II, Article III (sections 1,
2, 3, 5 and 17),  Article VI, Article VII, Article XII, Article XIII and Article XIV of
the  Registrant&#146;s By-Laws filed as Exhibit 2 hereto. </font></td></tr></table>

<table width=600><tr><td width=4% align=right valign=top><font size="1">(b)  </font></td><td width=2%><font size="1"> </font></td><td width=94%><font size="1"> To
be filed by amendment to this Registration Statement. </font></td></tr></table>

<table width=600><tr><td width=4% align=right valign=top><font size="1">(c)  </font></td><td width=2%><font size="1"> </font></td><td width=94%><font size="1"> Incorporated
by reference to Exhibit 13(c) to the Registration Statement on  Form N-14 of MuniYield
Fund, Inc. (File No. 333-65242), filed on September  14, 2001. </font></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2"><B>Item 17.  <I>Undertakings.</I></B> </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The undersigned
Registrant agrees that prior to any public reoffering of the securities registered through
use of a prospectus which is part of this Registration Statement by any person or party
who is deemed to be an underwriter within the meaning of Rule 145(c) of the Securities Act
of 1933, as amended, the reoffering prospectus will contain information called for by the
applicable registration form for reofferings by persons who may be deemed underwriters, in
addition to the information called for by other items of the applicable form. </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The undersigned
Registrant agrees that every prospectus that is filed under paragraph (1) above will be
filed as part of an amendment to the registration statement and will not be used until the
amendment is effective, and that, in determining any liability under the Securities Act of
1933, as amended, each post-effective amendment shall be deemed to be a new registration
statement for the securities offered therein, and the offering of securities at that time
shall be deemed to be the initial bona fide offering of them. </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The Registrant
undertakes to file, by post-effective amendment, an opinion of counsel as to certain tax
matters within a reasonable time after receipt of such opinion. </font></td></tr></table>

<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp; </font></td><td width=480 align=center><font size="2">
C-2 </font></td><td width=60 align=right><font size="1">&nbsp; </font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 42; page: 42" -->

<p><table width=600><tr><td  align=center><font size=2><B>SIGNATURES</B> </font></td></tr></table>

<p><table width=600><tr>
    <td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>As required by the Securities
      Act of 1933, this Registration Statement has been signed on behalf of the
      Registrant, in the Township of Plainsboro and State of New Jersey, on the
      9th day of March, 2004.</B> </font></td>
  </tr></table>

<p>
<table width=600>
  <tr>
    <td width=9>&nbsp;</td>
    <td width=303 valign="top">&nbsp;</td>
    <td colspan="2" align="center" valign="top"><font size=2>M<font size="1">UNI<font size="2">Y</font>IELD
      </font> I<font size="1">NSURED </font> F<font size="1">UND </font>, I<font size="1">NC
      </font>. <br>
      (Registrant) <br>
      <br>
       </font></td>
  </tr>
  <tr>
    <td width=9>&nbsp;</td>
    <td width=303 valign="top">&nbsp;</td>
    <td width=29 valign="top"><font size=2>By: </font></td>
    <td width=239 align="center" valign="top"><font size=2> /s/ D<font size="1">ONALD </font>
      C. B<font size="1">URKE </font><br>
      <font size="1"><b> </b> </font> </font>
      <hr noshade size="1">
      <font size=2><font size="1"><b>(Donald C. Burke, Vice President and Treasurer)</b> </font> </font></td>
  </tr>
</table>

<p><table width=600><tr>
    <td><font size=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As required by the Securities
      Act of 1933, this Registration Statement has been signed by the following
      persons in the capacities and on the dates indicated.</b> </font></td>
  </tr></table>

<p>
<p>
<table width=600>
  <tr>
    <td  align=center width="218"><font size=1><b>Signatures </b> </font>
      <hr noshade size="1" width="30%">
    </td>
    <td  align=center width="13">&nbsp;</td>
    <td  align=center width="217"><b><font size="1">Title </font></b>
      <hr noshade size="1" width="15%">
    </td>
    <td  align=center width="15">&nbsp;</td>
    <td  align=center width="113"><font size="1"><b>Date </b> </font>
      <hr noshade size="1" width="30%">
    </td>
  </tr>
  <tr>
    <td  align=center width="218"><font size=2>T<font size="1">ERRY </font> K.
      G<font size="1">LENN </font>*<br>
       </font>
      <hr noshade size="1">
      <font size="1"><b>(Terry K. Glenn) </b> </font></td>
    <td  align=center width="13">&nbsp;&nbsp;&nbsp;</td>
    <td  align=left valign="top" width="217"><font size=2>President (Principal
      Executive <br>
      &nbsp;&nbsp;&nbsp;Officer) and Director  </font></td>
    <td  align=center width="15">&nbsp;&nbsp;&nbsp;</td>
    <td  align=center valign="top" width="113">&nbsp;</td>
  </tr>
  <tr>
    <td  align=center width="218">&nbsp;</td>
    <td  align=center width="13">&nbsp;</td>
    <td  align=left valign="top" width="217">&nbsp;</td>
    <td  align=center width="15">&nbsp;</td>
    <td  align=center valign="top" width="113">&nbsp;</td>
  </tr>
  <tr>
    <td  align=center width="218"><font size=2>D<font size="1">ONALD </font> C.
      B<font size="1">URKE </font>*<br>
       </font>
      <hr noshade size="1">
      <font size=2> <b><font size="1">(Donald C. Burke)  </font></b> </font></td>
    <td  align=center width="13">&nbsp;</td>
    <td  align=left valign="top" width="217"><font size=2>Vice President and Treasurer
      (Principal <br>
      &nbsp;&nbsp;&nbsp; Financial and Accounting Officer)  </font></td>
    <td  align=center width="15">&nbsp;</td>
    <td  align=center valign="top" width="113"><font size=2> </font></td>
  </tr>
  <tr>
    <td  align=center width="218">&nbsp;</td>
    <td  align=center width="13">&nbsp;</td>
    <td  align=left valign="top" width="217">&nbsp;</td>
    <td  align=center width="15">&nbsp;</td>
    <td  align=center valign="top" width="113">&nbsp;</td>
  </tr>
  <tr>
    <td  align=center width="218"><font size=2>J<font size="1">AMES </font> H.
      B<font size="1">ODURTHA </font>*<br>
       </font>
      <hr noshade size="1">
      <font size=2> <font size="1"><b>(James H. Bodurtha)</b> </font> </font></td>
    <td  align=center width="13">&nbsp;</td>
    <td  align=left valign="top" width="217"><font size=2>Director </font></td>
    <td  align=center width="15">&nbsp;</td>
    <td  align=center valign="top" width="113">&nbsp;</td>
  </tr>
  <tr>
    <td  align=center width="218">&nbsp;</td>
    <td  align=center width="13">&nbsp;</td>
    <td  align=left valign="top" width="217">&nbsp;</td>
    <td  align=center width="15">&nbsp;</td>
    <td  align=center valign="top" width="113">&nbsp;</td>
  </tr>
  <tr>
    <td  align=center width="218"><font size=2>J<font size="1">OE </font> G<font size="1">RILLS </font>*<br>
       </font>
      <hr noshade size="1">
      <font size=2> <b><font size="1">(Joe Grills) </font></b> </font></td>
    <td  align=center width="13">&nbsp;</td>
    <td  align=left valign="top" width="217"><font size=2>Director </font></td>
    <td  align=center width="15">&nbsp;</td>
    <td  align=center valign="top" width="113"><font size=2> </font></td>
  </tr>
  <tr>
    <td  align=center height="25" width="218">&nbsp;</td>
    <td  align=center height="25" width="13">&nbsp;</td>
    <td  align=left valign="top" height="25" width="217">&nbsp;</td>
    <td  align=center height="25" width="15">&nbsp;</td>
    <td  align=center valign="top" height="25" width="113">&nbsp;</td>
  </tr>
  <tr>
    <td  align=center width="218"><font size=2>H<font size="1">ERBERT </font> I.
      L<font size="1">ONDON </font>*<br>
       </font>
      <hr noshade size="1">
      <b><font size="1">(Herbert I. London) </font></b></td>
    <td  align=center width="13">&nbsp;</td>
    <td  align=left valign="top" width="217"><font size=2>Director </font></td>
    <td  align=center width="15">&nbsp;</td>
    <td  align=center valign="top" width="113">&nbsp;</td>
  </tr>
  <tr>
    <td  align=center width="218">&nbsp;</td>
    <td  align=center width="13">&nbsp;</td>
    <td  align=left valign="top" width="217">&nbsp;</td>
    <td  align=center width="15">&nbsp;</td>
    <td  align=center valign="top" width="113">&nbsp;</td>
  </tr>
  <tr>
    <td  align=center width="218"><font size=2>A<font size="1">NDR&#201; </font>
      F. P<font size="1">EROLD </font>*<br>
       </font>
      <hr noshade size="1">
      <font size=2> <b><font size="1">(Andr&#233; F. Perold) </font></b> </font></td>
    <td  align=center width="13">&nbsp;</td>
    <td  align=left valign="top" width="217"><font size=2>Director </font></td>
    <td  align=center width="15">&nbsp;</td>
    <td  align=center valign="top" width="113">&nbsp;</td>
  </tr>
  <tr>
    <td  align=center width="218">&nbsp;</td>
    <td  align=center width="13">&nbsp;</td>
    <td  align=left valign="top" width="217">&nbsp;</td>
    <td  align=center width="15">&nbsp;</td>
    <td  align=center valign="top" width="113">&nbsp;</td>
  </tr>
  <tr>
    <td  align=center width="218"><font size=2>R<font size="1">OBERTA </font> C.
      R<font size="1">AMO </font>*<br>
       </font>
      <hr noshade size="1">
      <font size=2> <b><font size="1">(Roberta C. Ramo) </font></b> </font></td>
    <td  align=center width="13">&nbsp;</td>
    <td  align=left valign="top" width="217"><font size=2>Director </font></td>
    <td  align=center width="15">&nbsp;</td>
    <td  align=center valign="top" width="113">&nbsp;</td>
  </tr>
  <tr>
    <td  align=center height="23" width="218">&nbsp;</td>
    <td  align=center height="23" width="13">&nbsp;</td>
    <td  align=left valign="top" height="23" width="217">&nbsp;</td>
    <td  align=center height="23" width="15">&nbsp;</td>
    <td  align=center valign="top" height="23" width="113">&nbsp;</td>
  </tr>
  <tr>
    <td  align=center width="218"><font size=2>R<font size="1">OBERT </font> S.
      S<font size="1">ALOMON </font>, J<font size="1">R </font>.*<br>
       </font>
      <hr noshade size="1">
      <font size=2> <b><font size="1">(Robert S. Salomon, Jr.) </font></b> </font></td>
    <td  align=center width="13">&nbsp;</td>
    <td  align=left valign="top" width="217"><font size=2>Director </font></td>
    <td  align=center width="15">&nbsp;</td>
    <td  align=center valign="top" width="113">&nbsp;</td>
  </tr>
  <tr>
    <td  align=center width="218">&nbsp;</td>
    <td  align=center width="13">&nbsp;</td>
    <td  align=left valign="top" width="217">&nbsp;</td>
    <td  align=center width="15">&nbsp;</td>
    <td  align=center valign="top" width="113">&nbsp;</td>
  </tr>
  <tr>
    <td  align=center width="218"><font size=2>S<font size="1">TEPHEN </font> B.
      S<font size="1">WENSRUD </font>*<br>
       </font>
      <hr noshade size="1">
      <font size=2> <font size="1"><b>(Stephen B. Swensrud)</b> </font> </font></td>
    <td  align=center width="13">&nbsp;</td>
    <td  align=left valign="top" width="217"><font size=2>Director </font></td>
    <td  align=center width="15">&nbsp;</td>
    <td  align=center valign="top" width="113">&nbsp;</td>
  </tr>
  <tr>
    <td  align=center width="218">&nbsp;</td>
    <td  align=center width="13">&nbsp;</td>
    <td  align=left valign="top" width="217">&nbsp;</td>
    <td  align=center width="15">&nbsp;</td>
    <td  align=center valign="top" width="113">&nbsp;</td>
  </tr>
  <tr>
    <td  align=left width="218"><font size=2>*By:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;/s/
      D<font size="1">ONALD </font> C. B<font size="1">URKE </font><br>
      <font size="1"><b> </b> </font> </font>
      <hr noshade size="1" align="right" width="90%">
      <font size="1"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Donald
      C. Burke, Attorney-in-Fact)</b> </font></td>
    <td  align=center width="13">&nbsp;</td>
    <td  align=left valign="top" width="217">&nbsp;</td>
    <td  align=center width="15">&nbsp;</td>
    <td  align=center valign="top" width="113"><font size=2>March 9, 2004 </font></td>
  </tr>
</table>

<p>
<p>
<p>
<p>
<p>
<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp; </font></td><td width=480 align=center><font size="2">
C-3 </font></td><td width=60 align=right><font size="1">&nbsp; </font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;





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<p><table width=600><tr><td  align=center><font size=2><B>EXHIBIT INDEX</B> </font></td></tr></table>

<br>
<table width="600" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="71"><font size=1><b>Description</b> </font>
      <hr noshade size="1" width="55" align="left">
    </td>
    <td width="32">&nbsp;</td>
    <td width="497">&nbsp;</td>
  </tr>
  <tr>
    <td width="71" align="center"><font size="2">16</font></td>
    <td width="32" align="center"><font size="2">&#151;</font></td>
    <td width="497"><font size="2">Power of Attorney.</font></td>
  </tr>
</table>
<p>&nbsp;</p>
<p><table width=600>
  <tr align="left">
    <td>&nbsp; </td>
  </tr></table>

<p>&nbsp;
<p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;


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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-16
<SEQUENCE>3
<FILENAME>e17165ex16.htm
<DESCRIPTION>POWER OF ATTORNEY
<TEXT>
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<head>
<title> </title>
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<p><table width=600><tr>
    <td align=right><font size=2><B>Exhibit 16</B></font></td>
  </tr></table>

<p><table width=600><tr><td  align=center><font size=2><B>POWER OF ATTORNEY</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned,
Terry K. Glenn, Donald C. Burke, James H. Bodurtha, Joe Grills, Herbert I. London, Andr&#233; F.
Perold, Roberta  Cooper Ramo, Robert S. Salomon, Jr. and Stephen B. Swensrud, the
Directors/Trustees and the Officers of each of the registered  investment companies
listed below, hereby authorize Terry K. Glenn, Andrew J. Donohue, Donald C. Burke, Robert
C. Doll, Jr. and  Phillip S. Gillespie or any of them, as attorney-in-fact, to sign on
his or her behalf in the capacities indicated any Registration  Statement or amendment
thereto (including post-effective amendments) for each of the following registered
investment companies and to  file the same, with all exhibits thereto, with the
Securities and Exchange Commission: Apex Municipal Fund, Inc.; Corporate High  Yield
Fund, Inc.; Corporate High Yield Fund III, Inc.; Corporate High Yield Fund V, Inc.;
Corporate High Yield Fund VI, Inc.; Fund  Asset Management Master Trust; Master Focus
Twenty Trust; Master Large Cap Series Trust; Mercury Funds II; Merrill Lynch California
Municipal Series Trust; Merrill Lynch Focus Value Fund, Inc.; Merrill Lynch Fundamental
Growth Fund, Inc.; Merrill Lynch Investment  Managers Funds, Inc.; Merrill Lynch Large
Cap Series Funds, Inc.; Merrill Lynch Multi-State Municipal Series Trust; Merrill Lynch
Retirement Reserves Money Fund of Merrill Lynch Retirement Series Trust; Merrill Lynch
Short Term U.S. Government Fund, Inc.; Merrill  Lynch U.S. Government Mortgage Fund;
Merrill Lynch Variable Series Funds, Inc.; Merrill Lynch World Income Fund, Inc.;
MuniAssets  Fund, Inc.; MuniEnhanced Fund, Inc.; MuniHoldings California Insured Fund,
Inc.; MuniHoldings Insured Fund II, Inc.; MuniInsured  Fund, Inc; MuniYield Arizona Fund,
Inc.; MuniYield California Fund, Inc.; MuniYield California Insured Fund, Inc.; MuniYield
Florida  Fund; MuniYield Fund, Inc.; MuniYield Insured Fund, Inc.; MuniYield Michigan
Insured Fund II, Inc.; MuniYield New Jersey Fund, Inc.;  MuniYield New York Insured Fund,
Inc.; MuniYield Quality Fund, Inc.; MuniYield Quality Fund II, Inc.; Summit Cash Reserves
Fund of  Financial Institutions Series Trust; and The Asset Program, Inc.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>Dated:  February 18, 2004</font></td></tr></table>


<br>
<table cellspacing=0 cellpadding=0 width=600>
  <tr align="center" valign="bottom">
    <td width="44%"><font size="2">/s/ T<font size="1">ERRY</font> K. G<font size="1">LENN</font></font>
      <hr size="1" noshade width="175">
    </td>
    <td width="11%">&nbsp;</td>
    <td width="44%"><font size="2">/s/ D<font size="1">ONALD</font> C. B<font size="1">URKE</font></font>
      <hr size="1" noshade width="175">
    </td>
  </tr>
  <tr align="center" valign="bottom">
    <td width="44%"> <font size="2"><b><font size="1">Terry K. Glenn <br>
      (President/Principal Executive <br>
      Officer/Director/Trustee) </font></b></font></td>
    <td width="11%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td width="44%"> <font size="2"><b><font size="1">Donald C. Burke <br>
      (Vice President/Treasurer/Principal <br>
      Financial and Accounting Officer) </font></b></font></td>
  </tr>
  <tr align="center" valign="bottom">
    <td width="44%">&nbsp;</td>
    <td width="11%">&nbsp;</td>
    <td width="44%">&nbsp;</td>
  </tr>
  <tr align="center" valign="bottom">
    <td width="44%"><font size="2">/s/ J<font size="1">AMES</font> H. B<font size="1">ODURTHA</font></font>
      <hr size="1" noshade width="175">
    </td>
    <td width="11%">&nbsp;</td>
    <td width="44%"><font size="2">/s/ J<font size="1">OE</font> G<font size="1">RILLS</font></font>
      <hr size="1" noshade width="175">
    </td>
  </tr>
  <tr align="center" valign="bottom">
    <td width="44%"> <font size="2"><b><font size="1">James H. Bodurtha <br>
      (Director/Trustee) </font></b></font></td>
    <td width="11%"><font size="2"></font></td>
    <td width="44%"> <font size="2"><b><font size="1">Joe Grills <br>
      (Director/Trustee)</font></b></font></td>
  </tr>
  <tr align="center" valign="bottom">
    <td width="44%">&nbsp;</td>
    <td width="11%">&nbsp;</td>
    <td width="44%">&nbsp;</td>
  </tr>
  <tr align="center" valign="bottom">
    <td width="44%"><font size="2">/s/ H<font size="1">ERBERT</font> I. L<font size="1">ONDON</font></font>
      <hr size="1" noshade width="175">
    </td>
    <td width="11%">&nbsp;</td>
    <td width="44%"><font size="2">/s/ A<font size="1">NDR&#201;</font> F. P<font size="1">EROLD</font></font>
      <hr size="1" noshade width="175">
    </td>
  </tr>
  <tr align="center" valign="bottom">
    <td width="44%"> <font size="2"><b><font size="1">Herbert I. London <br>
      (Director/Trustee) </font></b></font></td>
    <td width="11%"><font size="2"></font></td>
    <td width="44%"> <font size="2"><b><font size="1">Andr&eacute; F. Perold <br>
      (Director/Trustee) </font></b></font></td>
  </tr>
  <tr align="center" valign="bottom">
    <td width="44%">&nbsp;</td>
    <td width="11%">&nbsp;</td>
    <td width="44%">&nbsp;</td>
  </tr>
  <tr align="center" valign="bottom">
    <td width="44%"><font size="2">/s/ R<font size="1">OBERTA</font> C<font size="1">OOPER</font>
      R<font size="1">AMO</font></font>
      <hr size="1" noshade width="175">
    </td>
    <td width="11%">&nbsp;</td>
    <td width="44%"><font size="2">/s/ R<font size="1">OBERT</font> S. S<font size="1">ALOMON</font></font>
      <font size="2">J</font><font size="1">R<font size="2">.</font></font>
      <hr size="1" noshade width="175">
    </td>
  </tr>
  <tr align="center" valign="bottom">
    <td width="44%"> <font size="2"><b><font size="1">Roberta Cooper Ramo <br>
      (Director/Trustee) </font></b></font></td>
    <td width="11%"><font size="2"></font></td>
    <td width="44%"> <font size="2"><b><font size="1">Robert S. Salomon, Jr. <br>
      (Director/Trustee) </font></b></font></td>
  </tr>
  <tr align="center" valign="bottom">
    <td width="44%">&nbsp;</td>
    <td width="11%">&nbsp;</td>
    <td width="44%">&nbsp;</td>
  </tr>
  <tr align="center" valign="bottom">
    <td width="44%"><font size="2">/s/ S<font size="1">TEPHEN</font> B. S<font size="1">WENSRUD</font></font>
      <hr size="1" noshade width="175">
    </td>
    <td width="11%">&nbsp;</td>
    <td width="44%">&nbsp;</td>
  </tr>
  <tr align="center" valign="bottom">
    <td width="44%" height=32> <font size="2"><b><font size="1">Stephen B. Swensrud
      <br>
      (Director/Trustee) </font></b></font></td>
    <td width="11%" height=32><font size="2"></font></td>
    <td width="44%" height=32><font size="2"></font></td>
  </tr>
</table>
<p>&nbsp; </p>
<p>&nbsp;
<table width=600><tr><td width=60 align=left><font size=1>&nbsp;</font></td><td width=480 align=center><font size="2">
</font></td><td width=60 align=right><font size="1">&nbsp;</font></td></tr></table><p>&nbsp;<hr size=5 noshade width=600 align=LEFT><p>&nbsp;


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