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<SEC-DOCUMENT>0000891092-04-001664.txt : 20040415
<SEC-HEADER>0000891092-04-001664.hdr.sgml : 20040415
<ACCEPTANCE-DATETIME>20040415154041
ACCESSION NUMBER:		0000891092-04-001664
CONFORMED SUBMISSION TYPE:	N-14 8C/A
PUBLIC DOCUMENT COUNT:		4
FILED AS OF DATE:		20040415

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/A
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-113433
		FILM NUMBER:		04735843

	BUSINESS ADDRESS:	
		STREET 1:		800 SCUDDERS MILL ROAD
		CITY:			PLAINSBORO
		STATE:			NJ
		ZIP:			08530
		BUSINESS PHONE:		6092822800
</SEC-HEADER>
<DOCUMENT>
<TYPE>N-14 8C/A
<SEQUENCE>1
<FILENAME>e17193n14_8ca.htm
<DESCRIPTION>FORM N-14
<TEXT>
<html>
<head>
<title>Untitled Document</title>
</head>
<body>
<p>
<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 38; page: 38" --><br>
<br>
<table width=600>
  <tr>
    <td  align=center><font size=2><b>&lt;R&gt;As filed with the Securities and
      Exchange Commission on April 15, 2004</b></font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td align=right><font size=2><b>Securities Act File No. 333-113433&lt;/R&gt;<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">&lt;R&gt;Pre-Effective Amendment No.
      1</font></b></td>
    <td align="center"><font size="2">|X|</font></td>
  </tr>
  <tr>
    <td valign=top>&nbsp;</td>
    <td align="center"><b><font size="2">&lt;/R&gt;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.&lt;R&gt;</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">Previously paid by wire transfer to the designated
      lockbox of the Securities and Exchange Commission in Pittsburgh, Pennsylvania.&lt;/R&gt;</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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  <!-- MARKER PAGE="sheet: 3; page: 3" -->


<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>

<br>
<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>

<p><table width=600><tr>
    <td  align=center><font size=2>&lt;R&gt;<B>To Be Held On May 19, 2004</B>&lt;/R&gt;</font></td>
  </tr></table>


<p><table width=600><tr>
    <td><font size=2>T<font size="1">O</font> <font size="1">THE</font> H<font size="1">OLDERS
      OF</font> C<font size="1">OMMON</font> S<font size="1">TOCK OF</font><BR>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;M<font size="1">UNIINSURED</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;&lt;R&gt;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 19, 2004 at 9:00 a.m. Eastern time for the
      following purposes:&lt;/R&gt;</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;</font></td></tr></table>

<p><table width=600>
<tr>
    <td width=30 valign="top"><font size="2">&lt;R&gt;</font></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 have 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 of 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; and&lt;/R&gt;</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.&lt;R&gt;</font></td>
  </tr></table>

<p><table width=600><tr>
    <td height="15"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stockholders of
      MuniInsured are not entitled to appraisal rights in connection with Proposal
      2.&lt;/R&gt;</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. 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.<b>
      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. The
      enclosed proxy is being solicited on behalf of the Board of Directors of
      MuniInsured.</b></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  1-866-800-7593.</font></td></tr></table>


<p>
<table width=600>
  <tr>
    <td width="329">&nbsp;</td>
    <td width="259"><font size=2>By Order of the Board of Directors,</font></td>
  </tr>
</table>

<p>
<table width=600>
  <tr>
    <td width="328">&nbsp;</td>
    <td width="260"><FONT SIZE="2">P<font size="1">HILLIP</font> S. G<font size="1">ILLESPIE</font><BR>
      <I>Secretary</I><BR>
      MuniInsured Fund, Inc.</FONT></td>
  </tr>
</table>

<p><table width=600><tr>
    <td><font size=2>&lt;R&gt;<br>
      Plainsboro, New Jersey<BR>
      Dated: April 16, 2004&lt;/R&gt;</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>&lt;R&gt;<b></b><B>PROXY STATEMENT OF MUNIINSURED
      FUND, INC.<BR>
      FOR USE AT AN ANNUAL MEETING OF STOCKHOLDERS</B></font></td>
  </tr></table>

<br>
<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 19, 2004</B>&lt;/R&gt;</font></td>
  </tr></table>

<table width=600><tr><td><hr size=1 noshade align=CENTER width=150></td></tr></table>


<p><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>

<br>
<table width=600><tr><td><hr size=1 noshade align=CENTER width=150></td></tr></table>


<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&lt;R&gt;<b></b>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 19, 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><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;
      &lt;/R&gt;<b></b></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; 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;(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;&lt;R&gt;&nbsp;The Board of Directors
      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 8,083,214 shares of common stock outstanding.&lt;/R&gt;</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>

<br>
<table width=600><tr><td><hr size=1 noshade align=CENTER width=150></td></tr></table>

<p><table width=600><tr><td  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></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;&lt;R&gt;&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; or the &#147;Pro Forma MuniYield Insured Combined
      Fund&#148;.&lt;/R&gt;</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;&lt;R&gt;&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 by MuniInsured to MuniYield
      Insured. These shares (plus cash in lieu of any fractional 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;MuniYield Insured Common Stock
      is listed on the New York Stock Exchange (the &#147;NYSE&#148;) under the
      symbol &#147;MYI.&#148; 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, the Statement of Additional Information relating
      to this Proxy Statement and Prospectus, dated April 16, 2004 (the &#147;Statement
      of Additional Information&#148;) 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. The Statement
      of Additional Information is incorporated by reference into this Proxy Statement
      and Prospectus. &lt;/R&gt;</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: 3; page: 3" --> <br>
  <br>

<table width="600" border="0" cellspacing="0" cellpadding="0">
  <tr align="center">
    <td><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><font size="2">&lt;R&gt;</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size="1"><b>Page</b></font>
      <hr noshade size="1">
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">INTRODUCTION</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">1</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">ITEM 1: ELECTION OF DIRECTORS</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">1</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">&nbsp;&nbsp;&nbsp;Committees of the Board of Directors</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">2</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">&nbsp;&nbsp;&nbsp;Committee and Board Meetings</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">3</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">&nbsp;&nbsp;&nbsp;Stockholder Communications</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">3</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">&nbsp;&nbsp;&nbsp;Director Attendance at Stockholder Meetings</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">3</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">&nbsp;&nbsp;&nbsp;Independent Auditors&#146; Fees</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">3</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">&nbsp;&nbsp;&nbsp;Audit Committee&#146;s Pre-Approval Policies
        and Procedures</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">4</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">&nbsp;&nbsp;&nbsp;Compliance with Section 16(a) of the
        Securities Exchange Act of 1934</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">5</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">&nbsp;&nbsp;&nbsp;Interested Persons</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">5</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">&nbsp;&nbsp;&nbsp;Compensation of Directors</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">5</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">&nbsp;&nbsp;&nbsp;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>
      <p><font size="2">&nbsp;&nbsp;&nbsp;Share Ownership</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><font size="2">ITEM 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><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><font size="2">&nbsp;&nbsp;&nbsp;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><font size="2">&nbsp;&nbsp;&nbsp;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><font size="2">&nbsp;&nbsp;&nbsp;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><font size="2">&nbsp;&nbsp;&nbsp;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>
      <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>
      <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><font size="2">&nbsp;&nbsp;&nbsp;Financial Highlights</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><font size="2">&nbsp;&nbsp;&nbsp;Investment Objectives and Policies</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">23</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">&nbsp;&nbsp;&nbsp;Portfolio Insurance</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">25</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">&nbsp;&nbsp;&nbsp;Description of Municipal Bonds</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">26</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">&nbsp;&nbsp;&nbsp;Other Investment Policies</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">27</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">&nbsp;&nbsp;&nbsp;Information Regarding Options and Futures
        Transactions</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">28</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">&nbsp;&nbsp;&nbsp;Municipal Interest Rate Swap Transactions</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><font size="2">&nbsp;&nbsp;&nbsp;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><font size="2">&nbsp;&nbsp;&nbsp;Rating Agency Guidelines</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">33</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">&nbsp;&nbsp;&nbsp;Portfolio Composition</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">33</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">&nbsp;&nbsp;&nbsp;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><font size="2">&nbsp;&nbsp;&nbsp;Portfolio Transactions</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">35</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">&nbsp;&nbsp;&nbsp;Portfolio Turnover</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">35</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">&nbsp;&nbsp;&nbsp;Net Asset Value</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">36</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">&nbsp;&nbsp;&nbsp;Capital Stock</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">36</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">&nbsp;&nbsp;&nbsp;Certain Provisions of the Charters</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">37</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">&nbsp;&nbsp;&nbsp;Management of the Funds</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">38</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">&nbsp;&nbsp;&nbsp;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><font size="2">&nbsp;&nbsp;&nbsp;Voting Rights</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><font size="2">&nbsp;&nbsp;&nbsp;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><font size="2">&nbsp;&nbsp;&nbsp;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>
      <p><font size="2">&nbsp;&nbsp;&nbsp;Automatic Dividend Reinvestment Plan</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">42</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">&nbsp;&nbsp;&nbsp;Mutual Fund Investment Option</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">44</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">&nbsp;&nbsp;&nbsp;Liquidation Rights of Holders of MuniYield
        Insured AMPS</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">44</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">&nbsp;&nbsp;&nbsp;Tax Rules Applicable to the Funds and
        their Stockholders</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">44</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <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><font size="2">&nbsp;&nbsp;&nbsp;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><font size="2">&nbsp;&nbsp;&nbsp;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><font size="2">&nbsp;&nbsp;&nbsp;Terms of the Agreement and Plan of Reorganization</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><font size="2">&nbsp;&nbsp;&nbsp;Potential Benefits to Stockholders of
        the Funds as a Result of the Reorganization</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">50</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">&nbsp;&nbsp;&nbsp;Surrender and Exchange of Stock Certificates</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">52</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">&nbsp;&nbsp;&nbsp;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>
      <p><font size="2">&nbsp;&nbsp;&nbsp;Capitalization</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">53</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td><font size="2">&lt;/R&gt;</font></td>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</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: 3; page: 3" --> <br>
  <br>
<table width="600" border="0" cellspacing="0" cellpadding="0">
  <tr align="center">
    <td><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><font size="2">&lt;R&gt;</font></td>
    <td>&nbsp;</td>
    <td align="right"><font size="1"><b>Page</b></font>
      <hr noshade size="1">
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">INFORMATION CONCERNING THE 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><font size="2">&nbsp;&nbsp;&nbsp;Date, Time and Place of the 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><font size="2">&nbsp;&nbsp;&nbsp;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><font size="2">&nbsp;&nbsp;&nbsp;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><font size="2">&nbsp;&nbsp;&nbsp;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>
      <p><font size="2">&nbsp;&nbsp;&nbsp;Voting Rights and Required Vote</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><font size="2">&nbsp;&nbsp;&nbsp;Appraisal Rights</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">55</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">ADDITIONAL INFORMATION</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">55</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">CUSTODIAN</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">56</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">TRANSFER AGENT, DIVIDEND DISBURSING AGENT AND REGISTRAR</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">56</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">ACCOUNTING SERVICES PROVIDER</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">56</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">LEGAL PROCEEDINGS</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">56</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">LEGAL OPINIONS</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">56</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">INDEPENDENT AUDITORS</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">56</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">STOCKHOLDER PROPOSALS</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">57</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">EXHIBIT I &#151; INFORMATION PERTAINING TO EACH FUND</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">I-1</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">EXHIBIT II &#151; AGREEMENT AND PLAN OF REORGANIZATION</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">II-1</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">EXHIBIT III &#151; DESCRIPTION OF BOND RATINGS</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">III-1</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">EXHIBIT IV &#151; PORTFOLIO INSURANCE</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">IV-1</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">EXHIBIT V &#151; CHARTER OF THE AUDIT COMMITTEE</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">V-1</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">EXHIBIT VI &#151; CHARTER OF THE NOMINATING COMMITTEE</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right">
      <p><font size="2">VI-1</font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td><font size="2">&lt;/R&gt;</font></td>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</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>INTRODUCTION</B></font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&lt;R&gt;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;
      or the &#147;Investment Adviser&#148;), 800 Scudders Mill Road, Plainsboro,
      New Jersey on Wednesday, May 19, 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
      22, 2004. &lt;/R&gt;</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;FOR&#148; the election of Directors
and  &#147;FOR&#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;&lt;R&gt;<b></b>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 plurality of the votes
      cast by MuniInsured&#146;s stockholders at the Meeting, voting in person
      or by proxy. &#147;Plurality of the votes&#148; means a candidate must receive
      more votes than any other candidate for the same position, but not necessarily
      a majority of the votes cast. 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 8,083,214
      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.
      &lt;/R&gt;<b></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 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>

<p><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;&lt;R&gt;<b></b>At the Meeting,
      Class III Directors of MuniInsured will be elected to serve until the expiration
      of their term and 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 MuniYield Insured is not divided into
      classes and all Directors of MuniYield Insured stand for election each year.
      The Board 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 or until their earlier resignation or removal.
      &lt;/R&gt; </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;FOR&#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;&lt;R&gt;<b></b>Certain biographical
      and other information relating to the nominees and the other Directors of
      MuniInsured 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. &lt;/R&gt;<b></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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<!-- MARKER PAGE="sheet: 2; page: 2" -->



<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;&lt;R&gt;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 AMEX (the &#147;non-interested
      Directors&#148;). Currently, Ms. Ramo and Messrs. Bodurtha, Grills, London,
      Perold, Salomon and Swensrud are members of MuniInsured&#146;s Audit Committee
      and Nominating Committee. &lt;/R&gt;</font></td>
  </tr></table>

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

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&lt;R&gt;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; (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><table width=600><tr>
    <td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MuniInsured adopted a revised
      Audit Committee Charter (the &#147;Audit Charter&#148;) at a meeting held
      on November 21, 2003. A copy of the Audit 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 Deloitte &amp; Touche <FONT SIZE="1">LLP</FONT> (&#147;D&amp;T&#148;),
      MuniInsured&#146;s independent auditors, and (b) discussed with D&amp;T
      certain matters required to be discussed by Statement on Auditing Standards
      No. 61. The Committee has considered whether the provision of non-audit
      services by D&amp;T 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 November
      21, 2003, the Audit Committee reviewed and discussed the audit of the Fund&#146;s
      financial statements with Fund management and D&amp;T. 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 Audit Committee would have been notified by Fund management
      or D&amp;T. The Audit Committee received no such notifications. The Audit
      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 September 30, 2003. &lt;/R&gt;</font></td>
  </tr></table>

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

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&lt;R&gt;<b></b>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 MuniInsured&#146;s
      non-interested Directors, the Nominating Committee may consider nominations
      for the office of Director made by Fund stockholders 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 all nominees 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. &lt;/R&gt;<b></b></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 </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;





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



<p><table width=600><tr><td><font size=2>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;&lt;R&gt;<b></b>During MuniInsured&#146;s
      most recently completed fiscal year, the Fund held four Board meetings and
      four 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 September 30, 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 Director at P.O. Box 9095,
      Princeton, New Jersey 08543-9095. 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 be forwarded
      to the entire Board or to the individual Director, as appropriate. 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. &lt;/R&gt;<b></b></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 Fund&#146;s 2003 Annual Meeting. </font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>Independent Auditors&#146; 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;&lt;R&gt;<b></b>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 MuniInsured&#146;s Affiliated Service Providers that relate
      directly to MuniInsured&#146;s operations and financial reporting, and,
      therefore, require Audit Committee pre-approval. Services under the caption:
      &lt;/R&gt;<b></b> </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><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>

<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>

<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>

<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>&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;





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



<p><table width=600><tr>
    <td><FONT SIZE="2"><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</I>&lt;R&gt;<I>Fees for
      audit and non-audit services provided directly to MuniInsured by D&amp;T:</I></FONT>
    </td>
  </tr></table>

<table border=0 cellspacing=0 cellpadding=0 width="600">
  <tr>
    <td valign=top>&nbsp;</td>
    <td valign=bottom align="center" colspan="3"><b><font size="1">Audit Fees
      ($) </font> </b>
      <hr size="1" noshade>
    </td>
    <td valign=bottom align="center"><b></b></td>
    <td valign=bottom align="center" colspan="3"><b><font size="1">Audit-Related
      Fees ($)</font> </b>
      <hr size="1" noshade>
    </td>
    <td valign=bottom align="center"><b></b></td>
    <td valign=bottom align="center" colspan="3"><b><font size="1">Tax Fees ($)</font>
      </b>
      <hr size="1" noshade>
    </td>
    <td valign=bottom align="center"><b></b></td>
    <td valign=bottom align="center" colspan="3"><b><font size="1">All Other Fees
      ($)</font> </b>
      <hr size="1" noshade width="100%">
    </td>
    <td valign=bottom align="center">&nbsp;</td>
  </tr>
  <tr>
    <td valign=top>
      <p>&nbsp;</p>
    </td>
    <td valign=bottom align="center"> <b><font size="1">2003 </font> </b>
      <hr size="1" noshade width="80%">
    </td>
    <td valign=bottom align="center">&nbsp; </td>
    <td valign=bottom align="center"> <b><font size="1">2002</font> </b>
      <hr size="1" noshade width="80%">
    </td>
    <td valign=bottom align="center">&nbsp; </td>
    <td valign=bottom align="center"> <b><font size="1">2003</font> </b>
      <hr size="1" noshade width="80%">
    </td>
    <td valign=bottom align="center">&nbsp; </td>
    <td valign=bottom align="center"> <b><font size="1">2002</font> </b>
      <hr size="1" noshade width="80%">
    </td>
    <td valign=bottom align="center">&nbsp; </td>
    <td valign=bottom align="center"> <b><font size="1">2003*</font> </b>
      <hr size="1" noshade width="80%">
    </td>
    <td valign=bottom align="center">&nbsp; </td>
    <td valign=bottom align="center"> <b><font size="1">2002*</font> </b>
      <hr size="1" noshade width="80%">
    </td>
    <td valign=bottom align="center">&nbsp; </td>
    <td valign=bottom align="center"> <b><font size="1">2003</font> </b>
      <hr size="1" noshade width="80%">
    </td>
    <td valign=bottom align="center">&nbsp; </td>
    <td valign=bottom align="center"> <b><font size="1">2002</font> </b>
      <hr size="1" noshade width="80%">
    </td>
    <td valign=bottom align="center">&nbsp; </td>
  </tr>
  <tr>
    <td valign=top>
      <p>&nbsp;</p>
    </td>
    <td valign=bottom align="center">
      <p><font size="1">$23,000</font></p>
    </td>
    <td valign=bottom align="center">
      <p>&nbsp;</p>
    </td>
    <td valign=bottom align="center">
      <p><font size="1">$33,100</font></p>
    </td>
    <td valign=bottom align="center">
      <p>&nbsp;</p>
    </td>
    <td valign=bottom align="center">
      <p><font size="1">$0</font></p>
    </td>
    <td valign=bottom align="center">
      <p>&nbsp;</p>
    </td>
    <td valign=bottom align="center">
      <p><font size="1">$0</font></p>
    </td>
    <td valign=bottom align="center">
      <p>&nbsp;</p>
    </td>
    <td valign=bottom align="center">
      <p><font size="1">$4,800</font></p>
    </td>
    <td valign=bottom align="center">
      <p>&nbsp;</p>
    </td>
    <td valign=bottom align="center">
      <p><font size="1">$4,700</font></p>
    </td>
    <td valign=bottom align="center">
      <p>&nbsp;</p>
    </td>
    <td valign=bottom align="center">
      <p><font size="1">$0</font></p>
    </td>
    <td valign=bottom align="center">
      <p>&nbsp;</p>
    </td>
    <td valign=bottom align="center">
      <p><font size="1">$0</font></p>
    </td>
    <td valign=bottom align="center">
      <p>&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td valign=top>&nbsp;</td>
    <td valign=bottom align="right">&nbsp;</td>
    <td valign=bottom align="center">&nbsp;</td>
    <td valign=bottom align="center">&nbsp;</td>
    <td valign=bottom align="center">&nbsp;</td>
    <td valign=bottom align="center">&nbsp;</td>
    <td valign=bottom align="center">&nbsp;</td>
    <td valign=bottom align="center">&nbsp;</td>
    <td valign=bottom align="center">&nbsp;</td>
    <td valign=bottom align="center">&nbsp;</td>
    <td valign=bottom align="center">&nbsp;</td>
    <td valign=bottom align="center">&nbsp;</td>
    <td valign=bottom align="center">&nbsp;</td>
    <td valign=bottom align="center">&nbsp;</td>
    <td valign=bottom align="center">&nbsp;</td>
    <td valign=bottom align="center">&nbsp;</td>
    <td valign=bottom align="center">&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 tax  compliance services associated with reviewing MuniInsured&#146;s tax
returns. </font></td></tr></table>

<p><table width=600><tr><td><FONT SIZE="2"><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fees
for non-audit services provided to MuniInsured&#146;s Affiliated Service
Providers by D&amp;T for which pre-approval by the Audit Committee was required:</I></FONT> </td></tr></table>

<P><table border=0 cellspacing=0 cellpadding=0 width="600">
    <tr valign="bottom" align="center">
      <td>
        <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
      </td>
      <td> <b><font size="1">Audit-Related Fees ($)</font></b>
        <hr size="1" noshade width="60%">
      </td>
      <td>
        <p>&nbsp;</p>
      </td>
      <td> <b><font size="1">Tax Fees ($)</font></b>
        <hr size="1" noshade width="60%">
      </td>
      <td>
        <p>&nbsp;</p>
      </td>
      <td> <b><font size="1">All Other Fees ($)</font></b>
        <hr size="1" noshade width="60%">
      </td>
      <td>
        <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
      </td>
    </tr>
    <tr valign="bottom" align="center">
      <td>
        <p>&nbsp;</p>
      </td>
      <td> <b><font size="1">2003*</font></b>
        <hr size="1" noshade width="20%">
      </td>
      <td>&nbsp; </td>
      <td> <b><font size="1">2003*</font></b>
        <hr size="1" noshade width="40%">
      </td>
      <td>&nbsp; </td>
      <td> <b><font size="1">2003*</font></b>
        <hr size="1" noshade width="40%">
      </td>
      <td>
        <p>&nbsp;</p>
      </td>
    </tr>
    <tr valign="bottom" align="center">
      <td>
        <p>&nbsp;</p>
      </td>
      <td>

      <p><font size="2">$485,000**</font></p>
      </td>
      <td>
        <p>&nbsp;</p>
      </td>
      <td>

      <p><font size="2">$4,800</font></p>
      </td>
      <td>
        <p>&nbsp;</p>
      </td>
      <td>

      <p><font size="2">$56,140***</font></p>
      </td>
      <td>
        <p>&nbsp;</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% 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>

<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">Primarily associated with project management
      of non-financial service systems implementation.</font></td>
  </tr>
</table>
<p><table width=600><tr><td><FONT SIZE="2"><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Aggregate
non-audit fees for services provided to MuniInsured and its Affiliated Service Providers
by D&amp;T, regardless of whether pre-approval by the Audit Committee was required.</I></FONT> </td></tr></table>


<P><table border=0 cellspacing=0 cellpadding=0 width="600">
    <tr valign="bottom" align="center">
      <td>
        <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
      </td>
      <td colspan="3"> <b><font size="1">Aggregate Non-Audit Fees ($)</font></b>
        <hr size="1" noshade width="80%">
      </td>
      <td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
    </tr>
    <tr valign="bottom" align="center">

    <td height="33">
      <p>&nbsp;</p>
      </td>

    <td height="33"> <b><font size="1">2003</font></b>
      <hr size="1" noshade width="60%">
      </td>

    <td height="33">&nbsp; </td>

    <td height="33"> <b><font size="1">2002</font></b>
      <hr size="1" noshade width="60%">
      </td>

    <td height="33">&nbsp;</td>
    </tr>
    <tr valign="bottom" align="center">
      <td>
        <p>&nbsp;</p>
      </td>
      <td>
        <p><font size="2">$18,695,237&#134;</font></p>
      </td>
      <td>
        <p>&nbsp;</p>
      </td>

    <td>
      <p><font size="2">$17,016,858&#134;</font></p>
      </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">&#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. Fees are
      also 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;The Audit Committee has reviewed
      the non-audit services provided by D&amp;T, 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. &lt;/R&gt;</font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2><B>Audit Committee&#146;s Pre-Approval Policies and
Procedures</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 (<I>e.g.</I> 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 align="left">
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&lt;R&gt;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 Merrill Lynch &amp; Co., Inc.
      (&#147;ML &amp; Co.&#148;) 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 received from ML &amp; Co. and its affiliates. &lt;/R&gt;</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;





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



<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;&lt;R&gt;Section 16(a) of the
      Exchange Act, 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. &lt;/R&gt;</font></td>
  </tr></table>

<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>i.e.</I>,
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;&lt;R&gt;<b></b>MuniInsured
      considers Terry K. 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 and a Director 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 non-interested
      Director 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, Merrill Lynch Investment Managers,
      L.P. (&#147;MLIM&#148;) 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-interested Directors of MuniInsured, including
      the Class III nominees, from the Fund for the fiscal year ended September
      30, 2003, and the aggregate compensation paid to the non-interested Directors,
      including the Class III nominees, from all MLIM/FAM-advised funds, for the
      calendar year ended December 31, 2003. </font></td>
  </tr></table>

<P><table border=0 cellspacing=0 cellpadding=0 width=600>
    <tr valign="bottom" align="center">
      <td align="left"> <font size="1"><b>Name</b></font>
        <hr size="1" noshade align="left" width="15%">
      </td>
      <td>&nbsp; </td>
      <td> <font size="1"><b>Compensation <br>
        From Fund </b></font>
        <hr size="1" noshade width="80%">
      </td>
      <td>&nbsp; </td>
      <td> <font size="1"><b>Pension or <br>
        Retirement Benefits<br>
        Accrued as Part of <br>
        Fund Expense </b></font>
        <hr size="1" noshade width="80%">
      </td>
      <td>&nbsp; </td>
      <td> <font size="1"><b>Aggregate<br>
        Compensation from<br>
        Fund and Other <br>
        MLIM/FAM-<br>
        Advised Funds&#134; </b></font>
        <hr size="1" noshade width="80%">
      </td>
    </tr>
    <tr valign="bottom">
      <td> <font size="2">James H. Bodurtha*</font></td>
      <td>&nbsp; </td>
      <td align="center"> <font size="2">$3,264</font></td>
      <td align="center">&nbsp; </td>
      <td align="center"> <font size="2">None</font></td>
      <td align="center">&nbsp; </td>
      <td align="center"> <font size="2">$183,219</font></td>
    </tr>
    <tr valign="bottom">
      <td> <font size="2">Joe Grills*</font></td>
      <td>&nbsp; </td>
      <td align="center"> <font size="2">$3,264</font></td>
      <td align="center">&nbsp; </td>
      <td align="center"> <font size="2">None</font></td>
      <td align="center">&nbsp; </td>
      <td align="center"> <font size="2">$182,219</font></td>
    </tr>
    <tr valign="bottom">
      <td> <font size="2">Herbert I. London</font></td>
      <td>&nbsp; </td>
      <td align="center"> <font size="2">$3,230</font></td>
      <td align="center">&nbsp; </td>
      <td align="center"> <font size="2">None</font></td>
      <td align="center">&nbsp; </td>
      <td align="center"> <font size="2">$163,219</font></td>
    </tr>
    <tr valign="bottom">
      <td> <font size="2">Andr&#233; F. Perold</font></td>
      <td>&nbsp; </td>
      <td align="center"> <font size="2">$3,230</font></td>
      <td align="center">&nbsp; </td>
      <td align="center"> <font size="2">None</font></td>
      <td align="center">&nbsp; </td>
      <td align="center"> <font size="2">$162,219</font></td>
    </tr>
    <tr valign="bottom">
      <td> <font size="2">Roberta Cooper Ramo</font></td>
      <td>&nbsp; </td>
      <td align="center"> <font size="2">$3,230</font></td>
      <td align="center">&nbsp; </td>
      <td align="center"> <font size="2">None</font></td>
      <td align="center">&nbsp; </td>
      <td align="center"> <font size="2">$163,219</font></td>
    </tr>
    <tr valign="bottom">
      <td> <font size="2">Robert S. Salomon, Jr</font></td>
      <td>&nbsp; </td>
      <td align="center"> <font size="2">$3,230</font></td>
      <td align="center">&nbsp; </td>
      <td align="center"> <font size="2">None</font></td>
      <td align="center">&nbsp; </td>
      <td align="center"> <font size="2">$163,219</font></td>
    </tr>
    <tr valign="bottom">
      <td> <font size="2">Melvin R. Seiden**</font></td>
      <td>&nbsp; </td>
      <td align="center"> <font size="2">$3,200</font></td>
      <td align="center">&nbsp; </td>
      <td align="center"> <font size="2">None</font></td>
      <td align="center">&nbsp; </td>
      <td align="center"> <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        0</font></td>
    </tr>
    <tr valign="bottom">
      <td> <font size="2">Stephen B. Swensrud</font></td>
      <td>&nbsp; </td>
      <td align="center"> <font size="2">$3,230</font></td>
      <td align="center">&nbsp; </td>
      <td align="center"> <font size="2">None</font></td>
      <td align="center">&nbsp; </td>
      <td align="center"> <font size="2">$168,219</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">&#134;</font></td><td width=2%><font size="1"></font></td>
    <td width=94%><font size="1"> For the number of MLIM/FAM-advised funds from
      which each Director receives compensation, see Exhibit I to this Proxy Statement
      and Prospectus. &lt;/R&gt;</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"> 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;





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



<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;&lt;R&gt;<b></b>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 ML &amp; Co. &lt;/R&gt;<b></b></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. <b></b></font></td>
  </tr></table>

<p><table width=600><tr><td><FONT SIZE="2"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>

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

<p><table width=600><tr>
    <td><FONT SIZE="2"><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</I>&lt;R&gt;<b></b><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 II.</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) on a proportionate basis to holders of MuniInsured Common Stock
      and will then liquidate and dissolve under Maryland law and terminate its
      registration under the Investment Company Act. &lt;/R&gt;</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>

<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;&lt;R&gt;</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)
      with an aggregate net asset value equal to the aggregate net asset value
      of the shares of MuniInsured Common Stock owned by such stockholders immediately
      prior to the Reorganization. &lt;/R&gt;</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>&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;





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<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: &lt;R&gt;</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>After
the Reorganization, MuniInsured&#146;s stockholders will remain invested  in a closed-end
fund with an investment objective and policies that are  substantially similar to
MuniInsured&#146;s current investment objective and  policies; </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>After the Reorganization, stockholders of MuniInsured
      will become invested in a fund that can use leverage by issuing Auction
      Market Preferred Stock (&#147;AMPS&#148;) to seek to enhance the yield to
      common stockholders. The use of leverage results in certain additional costs
      to common stockholders that do not currently apply to stockholders of MuniInsured,
      which does not issue AMPS, and also increases the risk of volatility in
      yield, net asset value and market price for common stockholders. However,
      the Board of Directors of MuniInsured determined that the benefits of having
      the flexibility to seek to increase yield by using leverage outweighed these
      additional costs and the risks of using leverage. </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>After the Reorganization, MuniInsured&#146;s stockholders
      will be invested in a fund with substantially greater net assets; and </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>After the Reorganization, the per share operating
      expenses the common stock of the Combined Fund, excluding the additional
      expenses that result from the AMPS, are expected to be lower than the current
      per share operating expenses of the common stock of MuniInsured, which is
      not leveraged and is, therefore, not subject to any additional expenses
      that apply to AMPS. Although the total operating expenses of the common
      stock of the Combined Fund, including the additional expenses that result
      from the Combined Fund&#146;s AMPS, are expected to be higher than MuniInsured&#146;s
      current total operating expenses, the Directors of MuniInsured determined
      that the potential benefits to common stockholders of the Combined Fund
      from the ability to issue AMPS to seek to enhance yield outweighed the potentially
      higher overall operating expense ratio. &lt;/R&gt;</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;&lt;R&gt;The Directors of MuniInsured
      and MuniYield Insured unanimously approved the Reorganization at meetings
      held on November 21, 2003 and recommend that you vote to approve the Agreement
      and Plan. &lt;/R&gt;</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><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>&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;





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



<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>

<p><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" align="center">
    <td align="left"><font size=2>&lt;R&gt;</font></td>
    <td>&nbsp;</td>
    <td colspan="5">&nbsp;</td>
    <td>&nbsp;</td>
    <td colspan="2">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="bottom" align="center">
    <td>
      <p>&nbsp;</p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td colspan="5"> <b><font size="1">Actual</font></b>
      <hr size="1" noshade>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td colspan="2"> <b><font size="1">Pro Forma</font></b>
      <hr size="1" noshade>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
  </tr>
  <tr valign="bottom" align="center">
    <td>
      <p>&nbsp;</p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td colspan="2"> <b><font size="1">MuniInsured</font></b>
      <hr size="1" noshade>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td colspan="2"> <b><font size="1">MuniYield<br>
      Insured </font></b>
      <hr size="1" noshade>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td colspan="2"> <b><font size="1"> MuniYield<br>
      Insured <br>
      Combined <br>
      Fund </font></b>
      <hr size="1" noshade>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">Common Stockholder Transaction Expenses<br>
      &nbsp;&nbsp;&nbsp; Maximum Sales Load (as a percentage of the offering <br>
      &nbsp;&nbsp;&nbsp; price) imposed on purchases of Common Stock</font></td>
    <td>&nbsp; </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>&nbsp; </td>
    <td align="right"> <font size="2">None</font></td>
    <td> <font size="2">(c)</font></td>
    <td>&nbsp; </td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">&nbsp;&nbsp;&nbsp;Dividend Reinvestment and Cash Purchase
      Plan Fees</font></td>
    <td>&nbsp; </td>
    <td align="right"> <font size="2">None</font></td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td align="right"> <font size="2">None</font></td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td align="right"> <font size="2">None</font></td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">Annual Expenses (as a percentage of average net assets<br>
      &nbsp;&nbsp;&nbsp; attributable to Common Stock:(d)</font></td>
    <td>&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td>&nbsp; </td>
    <td>&nbsp;&nbsp;&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td>&nbsp; </td>
    <td>&nbsp;&nbsp;&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">&nbsp;&nbsp;&nbsp;Investment Advisory Fees(e)</font></td>
    <td>&nbsp; </td>
    <td align="right"> <font size="2">0.50%</font></td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td align="right"> <font size="2">0.73%</font></td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td align="right"> <font size="2">0.71%</font></td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">&nbsp;&nbsp;&nbsp;Interest Payments on Borrowed Funds</font></td>
    <td>&nbsp; </td>
    <td align="right"> <font size="2">None</font></td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td align="right"> <font size="2">None</font></td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td align="right"> <font size="2">None</font></td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">&nbsp;&nbsp;&nbsp;Other Expenses</font></td>
    <td>&nbsp; </td>
    <td align="right"> <font size="2">0.29%</font></td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td align="right"> <font size="2">0.22%</font></td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td align="right"> <font size="2">0.21%</font></td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">
      <hr size="1" noshade width="100%">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">
      <hr size="1" noshade width="100%">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">
      <hr size="1" noshade width="100%">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">&nbsp;&nbsp;&nbsp;Total Annual Expenses</font></td>
    <td>&nbsp; </td>
    <td align="right"> <font size="2">0.79%</font></td>
    <td><font size="2">(f)</font> </td>
    <td>&nbsp; </td>
    <td align="right"> <font size="2">0.95%</font></td>
    <td> <font size="2">(f)(g)</font></td>
    <td>&nbsp; </td>
    <td align="right"> <font size="2">0.92%</font></td>
    <td> <font size="2">(f)(g)</font></td>
    <td>&nbsp; </td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">
      <hr size="2" noshade width="100%">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">
      <hr size="2" noshade width="100%">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">
      <hr size="2" noshade width="100%">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td><font size=2>&lt;/R&gt;</font></td>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</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">(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 holders 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% align=right 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% align=right 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% align=right 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% align=right 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%.&lt;R&gt;</font></td>
  </tr></table>

<table width=600><tr><td width=4% align=right valign=top><font size="1">(f) </font></td><td width=2%><font size="1"></font></td>
    <td width=94%><font size="1"> If assets attributable to AMPS of MuniYield
      Insured are included, the Total Annual Expenses (excluding any fee waiver)
      for MuniInsured, MuniYield Insured and the Pro Forma MuniYield Insured Combined
      Fund would be 0.79%, 0.65%, 0.64%, respectively. The ratios shown in the
      table are based on approximate 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).&lt;/R&gt;</font></td>
  </tr></table>

<table width=600><tr><td width=4% align=right valign=top><font size="1">(g) </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>

<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;





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<p><table width=600><tr>
    <td height="51"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&lt;R&gt;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 directly or
      indirectly bear as compared to the costs and expenses that would be borne
      by such investors taking into account the Reorganization. &lt;/R&gt;</font></td>
  </tr></table>

<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;&lt;R&gt;<b></b>These examples
      assume that a stockholder invests $1,000 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 Combined Fund <BR>
      for the Periods Indicated</B></font></td>
  </tr></table>

<P><table border=0 cellspacing=0 cellpadding=0 width="600">
    <tr valign="bottom">
      <td>
        <p>&nbsp;</p>
      </td>
      <td>
        <p><font size="1">&nbsp;&nbsp; </font></p>
      </td>
      <td align="center"> <b><font size="1">1 Year </font> </b>
        <hr noshade size="1">
      </td>
      <td align="center"> <b><font size="1">&nbsp;&nbsp; </font> </b></td>
      <td align="center"> <b><font size="1">3 Years </font> </b>
        <hr noshade size="1">
      </td>
      <td align="center"> <b><font size="1">&nbsp;&nbsp; </font> </b></td>
      <td align="center"> <b><font size="1">5 Years </font> </b>
        <hr noshade size="1">
      </td>
      <td align="center"> <b><font size="1">&nbsp;&nbsp; </font> </b></td>
      <td align="center"> <b><font size="1">10 Years </font> </b>
        <hr noshade size="1">
      </td>
    </tr>
    <tr valign="bottom">
      <td> <font size="2">MuniInsured </font></td>
      <td>&nbsp; </td>
      <td align="center"> <font size="2">$&nbsp;&nbsp;8 </font></td>
      <td align="center">&nbsp; </td>
      <td align="center"> <font size="2">$25 </font></td>
      <td align="center">&nbsp; </td>
      <td align="center"> <font size="2">$44 </font></td>
      <td align="center">&nbsp; </td>
      <td align="center"> <font size="2">$&nbsp;&nbsp;98 </font></td>
    </tr>
    <tr valign="bottom">
      <td> <font size="2">MuniYield Insured </font></td>
      <td>&nbsp; </td>
      <td align="center"> <font size="2">$10 </font></td>
      <td align="center">&nbsp; </td>
      <td align="center"> <font size="2">$30 </font></td>
      <td align="center">&nbsp; </td>
      <td align="center"> <font size="2">$53 </font></td>
      <td align="center">&nbsp; </td>
      <td align="center"> <font size="2">$117 </font></td>
    </tr>
    <tr valign="bottom">
      <td> <font size="2">Pro Forma MuniYield Insured Combined Fund(a) </font></td>
      <td>&nbsp; </td>
      <td align="center"> <font size="2">$&nbsp;&nbsp;9 </font></td>
      <td align="center">&nbsp; </td>
      <td align="center"> <font size="2">$29 </font></td>
      <td align="center">&nbsp; </td>
      <td align="center"> <font size="2">$51 </font></td>
      <td align="center">&nbsp; </td>
      <td align="center"> <font size="2">$113 </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"> Assumes that the Reorganization took place on
      October 31, 2003. &lt;/R&gt;</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><table border=0 cellspacing=0 cellpadding=0 width="600">
    <tr>
      <td width=135 valign=top><font size="2"> <b>MuniYield Insured </b> </font></td>
      <td width=107 valign=top>&nbsp; </td>
      <td width=310 valign=top> <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>
    <tr>
      <td width=135 valign=top> <font size="2">&nbsp;&nbsp; </font></td>
      <td width=107 valign=top>&nbsp; </td>
      <td width=310 valign=top>&nbsp; </td>
    </tr>
    <tr>
      <td width=135 valign=top>&nbsp; </td>
      <td width=107 valign=top>&nbsp; </td>
      <td width=310 valign=top> <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 April
        1, 2004, MuniYield Insured had net assets (including assets attributable
        to all series of MuniYield Insured AMPS) of approximately $1.4 billion.
        </font></td>
    </tr>
    <tr>
      <td width=135 valign=top> <font size="2">&nbsp;&nbsp; </font></td>
      <td width=107 valign=top>&nbsp; </td>
      <td width=310 valign=top>&nbsp; </td>
    </tr>
    <tr>
      <td width=135 valign=top><font size="2"> <b>MuniInsured </b> </font></td>

    <td width=107 valign=top align="right">&nbsp; </td>

    <td width=310 valign=top> <font size="2">&lt;R&gt;<b></b>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>
    <tr>
      <td width=135 valign=top> <font size="2">&nbsp;&nbsp; </font></td>
      <td width=107 valign=top>&nbsp; </td>
      <td width=310 valign=top>&nbsp; </td>
    </tr>
    <tr>
      <td width=135 valign=top>&nbsp; </td>
      <td width=107 valign=top>&nbsp; </td>

    <td width=310 valign=top> <font size="2">MuniInsured has outstanding shares
      of Common Stock. As of April 1, 2004, MuniInsured had net assets of $80.2
      million. &lt;/R&gt;<b></b></font></td>
    </tr>
    <tr>
      <td width=135 valign=top> <font size="2">&nbsp;&nbsp; </font></td>
      <td width=107 valign=top>&nbsp; </td>
      <td width=310 valign=top>&nbsp; </td>
    </tr>
    <tr>
      <td width=135 valign=top><font size="2"> <b>Comparison of the Funds </b>
        </font></td>
      <td width=107 valign=top>&nbsp; </td>
      <td width=310 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>
    <tr>
      <td width=135 valign=top> <font size="2">&nbsp;&nbsp; </font></td>
      <td width=107 valign=top>&nbsp; </td>
      <td width=310 valign=top>&nbsp; </td>
    </tr>
    <tr>
      <td width=135 valign=top> <font size="2">&nbsp; </font></td>
      <td width=107 valign=top> <font size="2">&nbsp; </font></td>

    <td width=310 valign=top> <font size="2">&lt;R&gt;<i>Investment Strategies.</i>
      The investment strategies used by each Fund are substantially similar. Each
      Fund seeks to achieve its investment objective by investing primarily in
      municipal obligations issued by or 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 &lt;/R&gt;</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;





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<P><table border=0 cellspacing=0 cellpadding=0 width="600">
    <tr>
      <td width=135 valign=top>&nbsp;</td>
      <td width=107 valign=top>&nbsp;</td>
      <td width=310 valign=top><font size="2">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>
    <tr>
      <td width=135 valign=top>&nbsp;</td>
      <td width=107 valign=top>&nbsp;</td>
      <td width=310 valign=top>&nbsp;</td>
    </tr>
    <tr>
      <td width=135 valign=top>&nbsp; </td>
      <td width=107 valign=top>&nbsp; </td>

    <td width=310 valign=top> <font size="2">&lt;R&gt;<b></b>As of April 1, 2004,
      the weighted average maturities of the portfolios of MuniYield Insured and
      MuniInsured were approximately 20.84 years and 21.39 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 Objectives and Policies.&#148; </font></td>
    </tr>
    <tr>
      <td width=135 valign=top> <font size="2">&nbsp;&nbsp; </font></td>
      <td width=107 valign=top>&nbsp; </td>
      <td width=310 valign=top>&nbsp; </td>
    </tr>
    <tr>
      <td width=135 valign=top> <font size="2">&nbsp; </font></td>
      <td width=107 valign=top> <font size="2">&nbsp; </font></td>

    <td width=310 valign=top> <font size="2"><i>Main Difference 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;Use of Leverage by
      MuniYield Insured&#148; and &#147;Risk Factors and Special Considerations&#151;Leverage.&#148;
      </font></td>
    </tr>
    <tr>
      <td width=135 valign=top> <font size="2">&nbsp;&nbsp; </font></td>
      <td width=107 valign=top>&nbsp; </td>
      <td width=310 valign=top>&nbsp; </td>
    </tr>
    <tr>
      <td width=135 valign=top> <font size="2">&nbsp; </font></td>
      <td width=107 valign=top> <font size="2">&nbsp; </font></td>

    <td width=310 valign=top> <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 April
      1, 2004, (i) the net asset value per share of MuniInsured Common Stock was
      $9.92 and the market price per share was $9.75 and (ii) the net asset value
      per share of MuniYield Insured Common Stock was $15.73 and the market price
      per share was $15.29. 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; &lt;/R&gt;<b></b> </font></td>
    </tr>
    <tr>
      <td width=135 valign=top> <font size="2">&nbsp;&nbsp; </font></td>
      <td width=107 valign=top>&nbsp; </td>
      <td width=310 valign=top>&nbsp; </td>
    </tr>
    <tr>
      <td width=135 valign=top>&nbsp; </td>
      <td width=107 valign=top>&nbsp; </td>
      <td width=310 valign=top> <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>
    <tr>
      <td width=135 valign=top> <font size="2">&nbsp;&nbsp; </font></td>
      <td width=107 valign=top>&nbsp; </td>
      <td width=310 valign=top>&nbsp; </td>
    </tr>
    <tr>
      <td width=135 valign=top>&nbsp; </td>
      <td width=107 valign=top>&nbsp; </td>

    <td width=310 valign=top> <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. &lt;R&gt;<b></b></font></td>
    </tr>
    <tr>
      <td width=135 valign=top>&nbsp;</td>
      <td width=107 valign=top>&nbsp;</td>
      <td width=310 valign=top>&nbsp;</td>
    </tr>
  </table>

<table border=0 cellspacing=0 cellpadding=0 width="600">
  <tr>
    <td valign=top width="262">
      <p><font size="1">&nbsp;&nbsp; </font></p>
    </td>
    <td valign=bottom align="center" width="119"> <b><font size="1">Auction Date
      </font> </b>
      <hr noshade size="1">
    </td>
    <td valign=bottom align="center" width="8"> <b><font size="1">&nbsp;&nbsp;
      </font> </b></td>
    <td valign=bottom align="center" width="37"> <b><font size="1">Series </font>
      </b>
      <hr noshade size="1">
    </td>
    <td valign=bottom align="center" width="17"> <b>&nbsp;&nbsp; </b></td>
    <td valign=bottom align="center" colspan="2"> <b><font size="1">Auction Schedule
      </font> </b>
      <hr noshade size="1">
    </td>
    <td valign=bottom align="center" width="11">&nbsp;&nbsp;</td>
    <td valign=bottom align="center" width="89"> <b><font size="1">Dividend Rate
      </font> </b>
      <hr noshade size="1">
    </td>
  </tr>
  <tr>
    <td valign=top width="262">
      <p>&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;</p>
    </td>
    <td valign=bottom width="119"> <font size="2">March 10, 2004 </font></td>
    <td valign=bottom width="8">&nbsp; </td>
    <td valign=bottom align="center" width="37"> <font size="2">A </font></td>
    <td valign=bottom width="17">&nbsp; </td>
    <td valign=bottom align="right" width="55"> <font size="2">28 day </font></td>
    <td valign=bottom width="2">&nbsp; </td>
    <td valign=bottom align="center" width="11">&nbsp;</td>
    <td valign=bottom align="center" width="89"> <font size="2">0.90% </font></td>
  </tr>
  <tr>
    <td valign=top width="262">
      <p>&nbsp;</p>
    </td>
    <td valign=bottom width="119"> <font size="2">March 10, 2004 </font></td>
    <td valign=bottom width="8">&nbsp; </td>
    <td valign=bottom align="center" width="37"> <font size="2">B </font></td>
    <td valign=bottom width="17">&nbsp; </td>
    <td valign=bottom align="right" width="55"> <font size="2">28 day </font></td>
    <td valign=bottom width="2">&nbsp; </td>
    <td valign=bottom align="center" width="11">&nbsp;</td>
    <td valign=bottom align="center" width="89"> <font size="2">0.91% </font></td>
  </tr>
  <tr>
    <td valign=top width="262">
      <p>&nbsp;</p>
    </td>
    <td valign=bottom width="119"> <font size="2">March 10, 2004 </font></td>
    <td valign=bottom width="8">&nbsp; </td>
    <td valign=bottom align="center" width="37"> <font size="2">C </font></td>
    <td valign=bottom width="17">&nbsp; </td>
    <td valign=bottom align="right" width="55"> <font size="2">28 day </font></td>
    <td valign=bottom width="2">&nbsp; </td>
    <td valign=bottom align="center" width="11">&nbsp;</td>
    <td valign=bottom align="center" width="89"> <font size="2">0.78% </font></td>
  </tr>
  <tr>
    <td valign=top width="262">
      <p>&nbsp;</p>
    </td>
    <td valign=bottom width="119"> <font size="2">March 3, 2004 </font></td>
    <td valign=bottom width="8">&nbsp; </td>
    <td valign=bottom align="center" width="37"> <font size="2">D </font></td>
    <td valign=bottom width="17">&nbsp; </td>
    <td valign=bottom align="right" width="55"> <font size="2">28 day </font></td>
    <td valign=bottom width="2">&nbsp; </td>
    <td valign=bottom align="center" width="11">&nbsp;</td>
    <td valign=bottom align="center" width="89"> <font size="2">0.82% </font></td>
  </tr>
  <tr>
    <td valign=top width="262">
      <p>&nbsp;</p>
    </td>
    <td valign=bottom width="119"> <font size="2">March 24, 2004 </font></td>
    <td valign=bottom width="8">&nbsp; </td>
    <td valign=bottom align="center" width="37"> <font size="2">E </font></td>
    <td valign=bottom width="17">&nbsp; </td>
    <td valign=bottom align="right" width="55"> <font size="2">7 day </font></td>
    <td valign=bottom width="2">&nbsp; </td>
    <td valign=bottom align="center" width="11">&nbsp;</td>
    <td valign=bottom align="center" width="89"> <font size="2">0.95% </font></td>
  </tr>
  <tr>
    <td valign=top width="262">
      <p>&nbsp;</p>
    </td>
    <td valign=bottom width="119"> <font size="2">March 22, 2004 </font></td>
    <td valign=bottom width="8">&nbsp; </td>
    <td valign=bottom align="center" width="37"> <font size="2">F </font></td>
    <td valign=bottom width="17">&nbsp; </td>
    <td valign=bottom align="right" width="55"> <font size="2">28 day </font></td>
    <td valign=bottom width="2">&nbsp; </td>
    <td valign=bottom align="center" width="11">&nbsp;</td>
    <td valign=bottom align="center" width="89"> <font size="2">0.80% </font></td>
  </tr>
  <tr>
    <td valign=top width="262">
      <p>&nbsp;</p>
    </td>
    <td valign=bottom width="119"> <font size="2">March 22, 2004 </font></td>
    <td valign=bottom width="8">&nbsp; </td>
    <td valign=bottom align="center" width="37"> <font size="2">G </font></td>
    <td valign=bottom width="17">&nbsp; </td>
    <td valign=bottom align="right" width="55"> <font size="2">7 day </font></td>
    <td valign=bottom width="2">&nbsp; </td>
    <td valign=bottom align="center" width="11">&nbsp;</td>
    <td valign=bottom align="center" width="89"> <font size="2">0.85% </font></td>
  </tr>
  <tr>
    <td valign=top width="262">&nbsp;</td>
    <td valign=bottom width="119"><font size=2>&lt;/R&gt;<b></b></font></td>
    <td valign=bottom width="8">&nbsp;</td>
    <td valign=bottom align="center" width="37">&nbsp;</td>
    <td valign=bottom width="17">&nbsp;</td>
    <td valign=bottom align="right" width="55">&nbsp;</td>
    <td valign=bottom width="2">&nbsp;</td>
    <td valign=bottom align="center" width="11">&nbsp;</td>
    <td valign=bottom align="center" width="89">&nbsp;</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;





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<P><table border=0 cellspacing=0 cellpadding=0 width="600">
    <tr>
      <td width=151 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=110 valign=top>
        <p>&nbsp;</p>
      </td>

    <td width=339 valign=top>
      <p><font size="2">&lt;R&gt;<i>Use of Leverage by MuniYield Insured. </i>MuniYield
        Insured may use leverage by issuing AMPS. AMPS are preferred stock that
        pay holders a fixed dividend rate that is set for each series of AMPS
        at an auction held every seven or twenty-eight days. 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 of MuniYield Insured or the Combined
        Fund. </font></p>
      </td>
    </tr>
    <tr>
      <td width=151 valign=top>
        <p><font size="2">&nbsp;&nbsp; </font></p>
      </td>
      <td width=110 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=339 valign=top>
        <p>&nbsp;</p>
      </td>
    </tr>
    <tr>
      <td width=151 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=110 valign=top>
        <p>&nbsp;</p>
      </td>

    <td width=339 valign=top>
      <p><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 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. <br>
        &lt;/R&gt;</font></p>
      </td>
    </tr>
    <tr>
      <td width=151 valign=top>
        <p><font size="2">&nbsp;&nbsp; </font></p>
      </td>
      <td width=110 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=339 valign=top>
        <p>&nbsp;</p>
      </td>
    </tr>
    <tr>
      <td width=151 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=110 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=339 valign=top>
        <p><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></p>
      </td>
    </tr>
    <tr>
      <td width=151 valign=top>
        <p><font size="2">&nbsp;&nbsp; </font></p>
      </td>
      <td width=110 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=339 valign=top>
        <p>&nbsp;</p>
      </td>
    </tr>
    <tr>
      <td width=151 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=110 valign=top>
        <p>&nbsp;</p>
      </td>

    <td width=339 valign=top>
      <p><font size="2">&lt;R&gt;<b></b><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 Pro Forma MuniYield Insured Combined Fund. See &#147;Comparison
        of the Funds&#151;Management of the Funds.&#148; </font></p>
      </td>
    </tr>
    <tr>
      <td width=151 valign=top>
        <p><font size="2">&nbsp;&nbsp; </font></p>
      </td>
      <td width=110 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=339 valign=top>
        <p>&nbsp;</p>
      </td>
    </tr>
    <tr>
      <td width=151 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=110 valign=top>
        <p>&nbsp;</p>
      </td>

    <td width=339 valign=top>
      <p><font size="2"><i>Advisory Fees.</i> FAM is an affiliate of Merrill Lynch
        Investment Managers, L.P. Both FAM and MLIM are owned and controlled by
        Merrill Lynch &amp; Co., Inc. 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 50 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;
        &lt;/R&gt;<b></b></font></p>
      </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;





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<P><table border=0 cellspacing=0 cellpadding=0 width="600">
    <tr>
      <td width=151 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=110 valign=top>
        <p>&nbsp;</p>
      </td>

    <td width=339 valign=top>
      <p><font size="2">&lt;R&gt;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 received 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 Pro
        Forma MuniYield Insured 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 received 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
        fee rate 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; &lt;/R&gt; </font></p>
      </td>
    </tr>
    <tr>
      <td width=151 valign=top>
        <p><font size="2">&nbsp;&nbsp; </font></p>
      </td>
      <td width=110 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=339 valign=top>
        <p>&nbsp;</p>
      </td>
    </tr>
    <tr>
      <td width=151 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=110 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=339 valign=top>
        <p><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></p>
      </td>
    </tr>
    <tr>
      <td width=151 valign=top>
        <p><font size="2">&nbsp;&nbsp; </font></p>
      </td>
      <td width=110 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=339 valign=top>
        <p>&nbsp;</p>
      </td>
    </tr>
    <tr>
      <td width=151 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=110 valign=top>
        <p>&nbsp;</p>
      </td>

    <td width=339 valign=top>
      <p><font size="2">&lt;R&gt;<b></b>Equiserve, BONY and State Street each
        receive fees for providing these services and will continue to provide
        these services to the Pro Forma MuniYield Insured Combined Fund. </font></p>
      </td>
    </tr>
    <tr>
      <td width=151 valign=top>
        <p><font size="2">&nbsp;&nbsp; </font></p>
      </td>
      <td width=110 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=339 valign=top>
        <p>&nbsp;</p>
      </td>
    </tr>
    <tr>
      <td width=151 valign=top>&nbsp;</td>
      <td width=110 valign=top>&nbsp;</td>

    <td width=339 valign=top><font size="2"><i>Overall Annual Expense Ratio.</i>
      MuniInsured is an unleveraged fund that issues only common stock. Because
      MuniInsured does not issue AMPS, it is not subject to the additional costs
      and expenses associated with AMPS. MuniYield Insured, however, is a leveraged
      fund that issues both common stock and AMPS and does incur the additional
      costs and expenses associated with AMPS. The Pro Forma MuniYield Insured
      Combined Fund also will be a leveraged fund that issues both common stock
      and AMPS and will also incur the additional costs and expenses associated
      with AMPS. </font></td>
    </tr>
    <tr>
      <td width=151 valign=top>&nbsp;</td>
      <td width=110 valign=top>&nbsp;</td>
      <td width=339 valign=top>&nbsp;</td>
    </tr>
    <tr>
      <td width=151 valign=top>&nbsp;</td>
      <td width=110 valign=top>&nbsp;</td>

    <td width=339 valign=top><font size="2">The tables below compare the total
      operating expense ratio of the common stock of MuniInsured and MuniYield
      Insured, and the expected total operating expense ratio of the common stock
      of the Pro Forma MuniYield Insured Combined Fund. The first table includes
      the additional costs and expenses associated with the AMPS of MuniYield
      Insured and the Pro Forma MuniYield Insured Combined Fund; therefore, the
      total operating expense ratio of the common stock of both MuniYield Insured
      and the Pro Forma MuniYield Insured Combined Fund is higher than that of
      the common stock of MuniInsured, which does not incur these additional costs.
      The second table excludes the additional costs and expenses associated with
      the AMPS of MuniYield Insured and the Pro Forma MuniYield Insured Combined
      Fund; therefore, the total operating expense ratio of the common stock of
      both MuniYield Insured and the Pro Forma MuniYield Insured Combined Fund
      is lower than that of the common stock of MuniInsured.&lt;/R&gt;</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;





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

<P><table border=0 cellspacing=0 cellpadding=0 width="600">
    <tr>
      <td width=151 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=110 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=339 valign=top>
        <p><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></p>
      </td>
    </tr>
    <tr>
      <td width=151 valign=top>&nbsp;</td>
      <td width=110 valign=top>&nbsp;</td>
      <td width=339 valign=top>&nbsp;</td>
    </tr>
  </table>

<table border=0 cellspacing=0 cellpadding=0 width="600">
    <tr>
      <td valign=top width="261">
        <p><font size="1">&nbsp;&nbsp;&nbsp; </font></p>
      </td>
      <td valign=bottom align="center" width="157"> <b><font size="1"><br>
         </font> </b></td>
      <td valign=bottom align="center" width="14">&nbsp; </td>
      <td valign=bottom align="center" width="94"> <b><font size="1">Approximate<br>
        Average Net Assets <br>
        (Excluding Assets<br>
        Attributable to<br>
        AMPS) as of<br>
        October 31, 2003 </font> </b>
        <hr noshade size="1">
      </td>
      <td valign=bottom align="center" width="18">&nbsp;&nbsp;&nbsp; </td>
      <td valign=bottom align="center" colspan="2"> <b><font size="1">Total<br>
         Annualized<br>
         Operating<br>
         Expense<br>
         Ratio </font> </b>
        <hr noshade size="1">
      </td>
    </tr>
    <tr>
      <td valign=top height="31" width="261">
        <p>&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;</p>
      </td>
      <td valign=bottom height="31" width="157"> <font size="2">MuniInsured </font></td>
      <td valign=bottom height="31" width="14">&nbsp;&nbsp; </td>
      <td valign=bottom height="31" align="center" width="94"> <font size="2">$79.6
        million </font></td>
      <td valign=bottom height="31" width="18">&nbsp; </td>
      <td valign=bottom height="31" align="right" width="28"> <font size="2">0.79
        </font></td>
      <td valign=bottom height="31" align="left" width="28"> <font size="2">%
        </font></td>
    </tr>
    <tr>
      <td valign=top width="261">
        <p>&nbsp;</p>
      </td>
      <td valign=bottom width="157"> <font size="2">MuniYield Insured </font></td>
      <td valign=bottom width="14">&nbsp; </td>
      <td valign=bottom align="center" width="94"> <font size="2">$952.3 million
        </font></td>
      <td valign=bottom width="18">&nbsp; </td>
      <td valign=bottom align="right" width="28"> <font size="2">0.95 </font></td>
      <td valign=bottom align="left" width="28"> <font size="2">%* </font></td>
    </tr>
    <tr>
      <td valign=top width="261">
        <p>&nbsp;</p>
      </td>
      <td valign=bottom width="157"> <font size="2">Pro Forma MuniYield<br>
        &nbsp;&nbsp; Insured Combined Fund </font></td>
      <td valign=bottom width="14">&nbsp; </td>
      <td valign=bottom align="center" width="94"> <font size="2">$1.0 billion
        </font></td>
      <td valign=bottom width="18">&nbsp; </td>
      <td valign=bottom align="right" width="28"> <font size="2">0.92 </font></td>
      <td valign=bottom align="left" width="28"> <font size="2">%* </font></td>
    </tr>
  </table>
  <table border=0 cellspacing=0 cellpadding=0 width="600">
    <tr>
      <td width=24 valign=top height="16">&nbsp;</td>
      <td width=237 valign=top height="16">&nbsp;</td>
      <td valign=top colspan="2" height="16">
        <hr noshade size="1" width="65" align="left">
      </td>
    </tr>
    <tr>
      <td width=24 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=237 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=18 valign=top>
        <p><font size="1">* </font></p>
      </td>
      <td width=321 valign=top>
        <p><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></p>
      </td>
    </tr>
  </table>

  <table border=0 cellspacing=0 cellpadding=0 width="600">
    <tr>
      <td width=145 valign=top>
        <p>&nbsp;&nbsp;</p>
      </td>
      <td width=116 valign=top>
        <p>&nbsp;&nbsp;</p>
      </td>
      <td width=339 valign=top>
        <p>&nbsp;</p>
      </td>
    </tr>
    <tr>
      <td width=145 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=116 valign=top>
        <p>&nbsp;</p>
      </td>

    <td width=339 valign=top><font size="2">&lt;R&gt;The table below sets forth
      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. &lt;/R&gt;</font> </td>
    </tr>
    <tr>
      <td width=145 valign=top>&nbsp;</td>
      <td width=116 valign=top>&nbsp;</td>
      <td width=339 valign=top>&nbsp;</td>
    </tr>
  </table>
  <font size="1">  </font>

<table border=0 cellspacing=0 cellpadding=0 width="600">
  <tr>
      <td valign=top width=261>
        <p><font size="1">&nbsp;&nbsp;&nbsp; </font></p>
      </td>
      <td valign=top width=150>
        <p><font size="1">  </font></p>
      </td>
      <td valign=top width=15>
        <p>&nbsp;</p>
      </td>
      <td valign=bottom align="center" width=97> <b><font size="1">Approximate<br>
        Average Net Assets<br>
        (Excluding Assets<br>
        Attributable to<br>
        AMPS) as of<br>
        October 31, 2003 </font> </b>
        <hr noshade size="1">
      </td>
      <td valign=bottom align="center" width=15>&nbsp; </td>
      <td valign=bottom align="center" colspan="2"> <b><font size="1">Total<br>
         Annualized<br>
         Operating<br>
         Expense<br>
         Ratio </font> </b>
        <hr noshade size="1">
      </td>
    </tr>
    <tr>
      <td valign=top width=261>
        <p>&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;</p>
      </td>
      <td valign=top width=150> <font size="2">MuniInsured </font></td>
      <td valign=top width=15>&nbsp;&nbsp; </td>
      <td valign=top align="center" width=97> <font size="2">$79.6 million </font></td>
      <td valign=top width=15>&nbsp;&nbsp; </td>
      <td valign=top align="right" width=31> <font size="2">0.79 </font></td>
      <td valign=top align="left" width=31> <font size="2">% </font></td>
    </tr>
    <tr>
      <td valign=top width=261>
        <p>&nbsp;</p>
      </td>
      <td valign=top width=150> <font size="2">MuniYield Insured </font></td>
      <td valign=top width=15>&nbsp; </td>
      <td valign=top align="center" width=97> <font size="2">$1.4 billion </font></td>
      <td valign=top width=15>&nbsp; </td>
      <td valign=top align="right" width=31> <font size="2">0.65 </font></td>
      <td valign=top align="left" width=31> <font size="2">%* </font></td>
    </tr>
    <tr>
      <td valign=top width=261>
        <p>&nbsp;</p>
      </td>
      <td valign=top width=150> <font size="2">Pro Forma MuniYield<br>
        &nbsp;&nbsp; Insured Combined Fund </font></td>
      <td valign=top width=15>&nbsp; </td>

    <td valign=bottom align="center" width=97> <font size="2">$1.5 billion </font></td>

    <td valign=bottom width=15>&nbsp; </td>

    <td valign=bottom align="right" width=31> <font size="2">0.64 </font></td>

    <td valign=bottom align="left" width=31> <font size="2">%* </font></td>
    </tr>
  </table>
  <table width=600 cellpadding="0" cellspacing="0" border="0">
    <tr>
      <td width="261">&nbsp; </td>
      <td width="339">
        <hr size=1 noshade align=left  width=75>
      </td>
    </tr>
  </table>
  <table width=600 cellpadding="0" cellspacing="0" border="0">
    <tr>
      <td width=45% align=right valign=top><font size="1">* </font></td>
      <td width=2%><font size="1"></font></td>
      <td width=53%><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>

<table border=0 cellspacing=0 cellpadding=0 width="600">
    <tr>
      <td width=170 valign=top>&nbsp;</td>
      <td width=90 valign=top>&nbsp;</td>
      <td width=340 valign=top>&nbsp;</td>
    </tr>
    <tr>
      <td width=170 valign=top>&nbsp;</td>
      <td width=90 valign=top>&nbsp;</td>

    <td width=340 valign=top><font size="2">&lt;R&gt;As noted above, because of
      the additional costs and expenses of the AMPS, the total operating expenses
      of the common stock of the Pro Forma MuniYield Insured Combined Fund are
      expected to be higher than the current total operating expenses of MuniInsured&#146;s
      common stock. However, the Directors of MuniInsured determined that the
      potential benefits to common stockholders of the Combined Fund from the
      ability to issue AMPS to seek to enhance yield outweighed this potentially
      higher overall operating expense ratio.&lt;/R&gt;</font></td>
    </tr>
    <tr>
      <td width=170 valign=top>&nbsp;</td>
      <td width=90 valign=top>&nbsp;</td>
      <td width=340 valign=top>&nbsp;</td>
    </tr>
    <tr>
      <td width=170 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=90 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=340 valign=top>
        <p><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></p>
      </td>
    </tr>
    <tr>
      <td width=170 valign=top>
        <p><font size="2">&nbsp;&nbsp; </font></p>
      </td>
      <td width=90 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=340 valign=top>
        <p>&nbsp;</p>
      </td>
    </tr>
    <tr>
      <td width=170 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=90 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=340 valign=top>
        <p><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></p>
      </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;





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<!-- MARKER PAGE="sheet: 15; page: 15" -->

<P><table border=0 cellspacing=0 cellpadding=0 width="600">
    <tr>
      <td width=170 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=90 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=340 valign=top>
        <p><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></p>
      </td>
    </tr>
    <tr>
      <td width=170 valign=top>
        <p><font size="2">&nbsp;&nbsp; </font></p>
      </td>
      <td width=90 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=340 valign=top>
        <p>&nbsp;</p>
      </td>
    </tr>
    <tr>
      <td width=170 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=90 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=340 valign=top>
        <p><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></p>
      </td>
    </tr>
    <tr>
      <td width=170 valign=top>
        <p><font size="2">&nbsp;&nbsp; </font></p>
      </td>
      <td width=90 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=340 valign=top>
        <p>&nbsp;</p>
      </td>
    </tr>
    <tr>
      <td width=170 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=90 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=340 valign=top>
        <p><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></p>
      </td>
    </tr>
    <tr>
      <td width=170 valign=top>
        <p><font size="2">&nbsp;&nbsp; </font></p>
      </td>
      <td width=90 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=340 valign=top>
        <p>&nbsp;</p>
      </td>
    </tr>
    <tr>
      <td width=170 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=90 valign=top>
        <p>&nbsp;</p>
      </td>

    <td width=340 valign=top>
      <p><font size="2">&lt;R&gt;<b></b><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;Description
        of Bond Ratings.&#148; &lt;/R&gt;<b></b></font></p>
      </td>
    </tr>
    <tr>
      <td width=170 valign=top>
        <p><font size="2">&nbsp;&nbsp; </font></p>
      </td>
      <td width=90 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=340 valign=top>
        <p>&nbsp;</p>
      </td>
    </tr>
    <tr>
      <td width=170 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=90 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=340 valign=top>
        <p><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></p>
      </td>
    </tr>
    <tr>
      <td width=170 valign=top>
        <p><font size="2">&nbsp;&nbsp; </font></p>
      </td>
      <td width=90 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=340 valign=top>
        <p>&nbsp;</p>
      </td>
    </tr>
    <tr>
      <td width=170 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=90 valign=top>
        <p>&nbsp;</p>
      </td>

    <td width=340 valign=top>
      <p><font size="2">&lt;R&gt;<i>Dividends and Distributions.</i> 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. Any dividends declared and payable on MuniYield Insured&#146;s
        AMPS shall be paid in preference to and in priority over any dividends
        on the MuniYield Insured Common Stock. The methods of dividend payment
        and distributions with respect to common stock are substantially similar
        for each Fund. See &#147;Comparison of the Funds-Dividends and Distributions.&#148;&lt;/R&gt;</font></p>
      </td>
    </tr>
    <tr>
      <td width=170 valign=top>
        <p><font size="2">&nbsp;&nbsp; </font></p>
      </td>
      <td width=90 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=340 valign=top>
        <p>&nbsp;</p>
      </td>
    </tr>
    <tr>
      <td width=170 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=90 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=340 valign=top>
        <p><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></p>
      </td>
    </tr>
    <tr>
      <td width=170 valign=top>
        <p><font size="2">&nbsp;&nbsp; </font></p>
      </td>
      <td width=90 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=340 valign=top>
        <p>&nbsp;</p>
      </td>
    </tr>
    <tr>
      <td width=170 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=90 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=340 valign=top>
        <p><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></p>
      </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;





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<!-- MARKER PAGE="sheet: 16; page: 16" -->

<P><table border=0 cellspacing=0 cellpadding=0 width="600">
    <tr>
      <td width=170 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=90 valign=top>
        <p>&nbsp;</p>
      </td>
      <td width=340 valign=top>
        <p><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></p>
      </td>
    </tr>
  </table>

<table border=0 cellspacing=0 cellpadding=0 width="600">
  <tr>
    <td colspan=2>&nbsp;</td>
    <td valign=bottom colspan="8" align="center">&nbsp;</td>
  </tr>
  <tr>
    <td colspan=2>
      <p>&nbsp;
    </td>
    <td valign=bottom colspan="8" align="center"> <b><font size="2">Outstanding
      Securities of MuniInsured and </font> </b></td>
  </tr>
  <tr>
    <td colspan=2>
      <p>&nbsp;
    </td>
    <td valign=bottom colspan="8" align="center"> <b><font size="2">MuniYield
      Insured as of April 1, 2004 </font> </b></td>
  </tr>
  <tr>
    <td colspan=2>
      <p><font size="2">&lt;R&gt;</font>
    </td>
    <td valign=bottom align="center" width=105> <font size="2">&nbsp;&nbsp; </font></td>
    <td valign=bottom align="center" width=12>&nbsp; </td>
    <td colspan=2 valign=bottom align="center">&nbsp; </td>
    <td valign=bottom align="center" width=12>&nbsp; </td>
    <td valign=bottom align="center" width=63>&nbsp; </td>
    <td valign=bottom align="center" width=12>&nbsp; </td>
    <td valign=bottom align="center" width=74>&nbsp; </td>
  </tr>
  <tr>
    <td colspan=2>
      <p>&nbsp;
    </td>
    <td valign=bottom align="center" width=105> <b><font size="1">Title of Class
      </font> </b>
      <hr noshade size="1">
    </td>
    <td valign=bottom align="center" width=12>&nbsp; </td>
    <td colspan=2 valign=bottom align="center"> <b><font size="1">Number<br>
      of Shares<br>
      Authorized </font> </b>
      <hr noshade size="1">
    </td>
    <td valign=bottom align="center" width=12>&nbsp; </td>
    <td valign=bottom align="center" width=63> <b><font size="1">Number <br>
      of Shares <br>
      Held by<br>
      Fund for Its <br>
      Own Account </font> </b>
      <hr noshade size="1">
    </td>
    <td valign=bottom align="center" width=12>&nbsp; </td>
    <td valign=bottom align="center" width=74> <b><font size="1">Number<br>
      of Shares<br>
      Outstanding<br>
      Exclusive of<br>
      Amount Shown<br>
      in Previous<br>
      Column </font> </b>
      <hr noshade size="1">
    </td>
  </tr>
  <tr>
    <td colspan=2>
      <p>&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;
    </td>
    <td valign=bottom width=105> <font size="2">MuniInsured <br>
      &nbsp;&nbsp; Common Stock </font></td>
    <td valign=bottom width=12>&nbsp; </td>
    <td colspan=2 valign=bottom align="center"> <font size="2">150,000,000 </font></td>
    <td valign=bottom align="center" width=12>&nbsp; </td>
    <td valign=bottom align="center" width=63> <font size="2">0 </font></td>
    <td valign=bottom align="center" width=12>&nbsp; </td>
    <td valign=bottom align="center" width=74> <font size="2">8,083,214 </font></td>
  </tr>
  <tr>
    <td colspan=2>
      <p>&nbsp;
    </td>
    <td valign=bottom width=105> <font size="2">MuniYield Insured<br>
      &nbsp;&nbsp;&nbsp;Common Stock </font></td>
    <td valign=bottom width=12>&nbsp;&nbsp; </td>
    <td colspan=2 valign=bottom align="center"> <font size="2">199,982,400 </font></td>
    <td valign=bottom align="center" width=12>&nbsp;&nbsp; </td>
    <td valign=bottom align="center" width=63> <font size="2">0 </font></td>
    <td valign=bottom align="center" width=12>&nbsp;&nbsp; </td>
    <td valign=bottom align="center" width=74> <font size="2">62,099,095 </font></td>
  </tr>
  <tr>
    <td colspan=2>&nbsp;</td>
    <td valign=bottom width=105><font size="2">MuniYield Insured<br>
      &nbsp;&nbsp;&nbsp;AMPS <br>
      </font></td>
    <td valign=bottom width=12>&nbsp;</td>
    <td colspan=2 valign=bottom align="center">&nbsp;</td>
    <td valign=bottom align="center" width=12>&nbsp;</td>
    <td valign=bottom align="center" width=63>&nbsp;</td>
    <td valign=bottom align="center" width=12>&nbsp;</td>
    <td valign=bottom align="center" width=74>&nbsp;</td>
  </tr>
  <tr>
    <td colspan=2>
      <p>&nbsp;
    </td>
    <td valign=bottom width=105> <font size="2">Series A </font></td>
    <td valign=bottom width=12>&nbsp; </td>
    <td colspan=2 valign=bottom align="center"> <font size="2">2,200 </font></td>
    <td valign=bottom align="center" width=12>&nbsp; </td>
    <td valign=bottom align="center" width=63> <font size="2">0 </font></td>
    <td valign=bottom align="center" width=12>&nbsp; </td>
    <td valign=bottom align="center" width=74> <font size="2">2,200 </font></td>
  </tr>
  <tr>
    <td colspan=2>
      <p>&nbsp;
    </td>
    <td valign=bottom width=105> <font size="2">Series B </font></td>
    <td valign=bottom width=12>&nbsp; </td>
    <td colspan=2 valign=bottom align="center"> <font size="2">2,200 </font></td>
    <td valign=bottom align="center" width=12>&nbsp; </td>
    <td valign=bottom align="center" width=63> <font size="2">0 </font></td>
    <td valign=bottom align="center" width=12>&nbsp; </td>
    <td valign=bottom align="center" width=74> <font size="2">2,200 </font></td>
  </tr>
  <tr>
    <td colspan=2>
      <p>&nbsp;
    </td>
    <td valign=bottom width=105> <font size="2">Series C </font></td>
    <td valign=bottom width=12>&nbsp; </td>
    <td colspan=2 valign=bottom align="center"> <font size="2">2,200 </font></td>
    <td valign=bottom align="center" width=12>&nbsp; </td>
    <td valign=bottom align="center" width=63> <font size="2">0 </font></td>
    <td valign=bottom align="center" width=12>&nbsp; </td>
    <td valign=bottom align="center" width=74> <font size="2">2,200 </font></td>
  </tr>
  <tr>
    <td colspan=2>
      <p>&nbsp;
    </td>
    <td valign=bottom width=105> <font size="2">Series D </font></td>
    <td valign=bottom width=12>&nbsp; </td>
    <td colspan=2 valign=bottom align="center"> <font size="2">2,200 </font></td>
    <td valign=bottom align="center" width=12>&nbsp; </td>
    <td valign=bottom align="center" width=63> <font size="2">0 </font></td>
    <td valign=bottom align="center" width=12>&nbsp; </td>
    <td valign=bottom align="center" width=74> <font size="2">2,200 </font></td>
  </tr>
  <tr>
    <td colspan=2>
      <p>&nbsp;
    </td>
    <td valign=bottom width=105> <font size="2">Series E </font></td>
    <td valign=bottom width=12>&nbsp; </td>
    <td colspan=2 valign=bottom align="center"> <font size="2">4,000 </font></td>
    <td valign=bottom align="center" width=12>&nbsp; </td>
    <td valign=bottom align="center" width=63> <font size="2">0 </font></td>
    <td valign=bottom align="center" width=12>&nbsp; </td>
    <td valign=bottom align="center" width=74> <font size="2">4,000 </font></td>
  </tr>
  <tr>
    <td colspan=2>
      <p>&nbsp;
    </td>
    <td valign=bottom width=105> <font size="2">Series F </font></td>
    <td valign=bottom width=12>&nbsp; </td>
    <td colspan=2 valign=bottom align="center"> <font size="2">2,400 </font></td>
    <td valign=bottom align="center" width=12>&nbsp; </td>
    <td valign=bottom align="center" width=63> <font size="2">0 </font></td>
    <td valign=bottom align="center" width=12>&nbsp; </td>
    <td valign=bottom align="center" width=74> <font size="2">2,400 </font></td>
  </tr>
  <tr>
    <td colspan=2>
      <p>&nbsp;
    </td>
    <td valign=bottom width=105> <font size="2">Series G </font></td>
    <td valign=bottom width=12>&nbsp; </td>
    <td colspan=2 valign=bottom align="center"> <font size="2">2,400 </font></td>
    <td valign=bottom align="center" width=12>&nbsp; </td>
    <td valign=bottom align="center" width=63> <font size="2">0 </font></td>
    <td valign=bottom align="center" width=12>&nbsp; </td>
    <td valign=bottom align="center" width=74> <font size="2">2,400 </font></td>
  </tr>
  <td width=126></td>
  <td width=132></td>
  <td width=105></td>
  <td width=12></td>
  <td width=32></td>
  <td width=32></td>
  <td width=12></td>
  <td width=63></td>
  <td width=12></td>
  <td width=74></td>
  </tr>
</table>
  <table border=0 cellspacing=0 cellpadding=0 width="600">
    <tr>

    <td valign=top width=167><font size="2">&lt;/R&gt;</font></td>
      <td colspan=4 valign=top>&nbsp;</td>
      <td colspan=5 valign=top width=342>&nbsp;</td>
    </tr>
    <tr>
      <td valign=top width=167><font size="2"> <b>Tax Considerations </b> </font></td>
      <td colspan=4 valign=top> <font size="2">&nbsp;&nbsp; </font></td>
      <td colspan=5 valign=top width=342> <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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<!-- MARKER PAGE="sheet: 17; page: 17" -->




<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;&lt;R&gt;<b></b>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 an 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. &lt;/R&gt;<b></b></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;&lt;R&gt;<b></b>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,
      each Fund 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
S&amp;P, Moody&#146;s or Fitch Ratings (&#147;Fitch&#148;) 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&#148; (&#147;PABs&#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; &lt;/R&gt;<b></b></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;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 objectives and policies. </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: 18; page: 18" -->



<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>i.e.</I>, 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>i.e.</I>, 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>

<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>

<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>

<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>&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;





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



<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;&lt;R&gt;MuniYield Insured
      currently has outstanding seven series of AMPS (each series paying dividends
      at a rate that is adjusted every seven or 28 days). Assuming that the AMPS
      represents approximately 29% of the Fund&#146;s capital after the Reorganization
      at an annual weighted average dividend rate of 0.938% payable on such AMPS
      based on recent market rates, the annual return that MuniYield Insured&#146;s
      portfolio must experience (net of expenses) in order to cover such dividend
      payments would be 0.27%. &lt;/R&gt;</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 29% of MuniYield
Insured&#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>

<P><table border=0 cellspacing=0 cellpadding=0 width="600">
    <tr valign="bottom">
      <td width=334> <font size="2"><b>Assumed Portfolio Return </b><br>
        &nbsp;&nbsp; (net of expenses) </font></td>
      <td width=14>&nbsp; </td>
      <td align="center" width=56> <font size="2">(10)% </font></td>
      <td align="center" width=50> <font size="2">(5)% </font></td>
      <td align="center" width=37> <font size="2">0% </font></td>
      <td align="center" width=54> <font size="2">5% </font></td>
      <td align="center" width=55> <font size="2">10% </font></td>
    </tr>
    <tr valign="bottom">
      <td width=334> <font size="2">Corresponding Common Stock Return </font></td>
      <td width=14>&nbsp;&nbsp; </td>
      <td align="center" width=56> <font size="2">(14)% </font></td>
      <td align="center" width=50> <font size="2">(7)% </font></td>
      <td align="center" width=37> <font size="2">0% </font></td>
      <td align="center" width=54> <font size="2">7% </font></td>
      <td align="center" width=55> <font size="2">14% </font></td>
    </tr>
  </table>


<p><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><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;&lt;R&gt;The Articles of Incorporation
      of each Fund, as amended and supplemented (in each case, the &#147;Charter&#148;),
      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. &lt;/R&gt;</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;





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



<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;&lt;R&gt;<b></b>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 should not
      be confused with ratings on the portfolio securities held by MuniYield Insured.
      &lt;/R&gt;<b></b> </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;&lt;R&gt;<b></b>The Board of
      Directors of MuniYield Insured, without stockholder approval, may amend,
      alter or repeal certain definitions or restrictions that 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. &lt;/R&gt;<b></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">
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: 21; page: 21" -->



<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</B></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;&lt;R&gt;The Financial Highlights
      table is intended to help you understand MuniYield Insured&#146;s financial
      performance for the periods shown. Certain information reflects financial
      results for a single MuniYield Insured share. The total returns in the table
      represent the rate an investor would have earned or lost on an investment
      in shares of MuniYield Insured (assuming reinvestment of all dividends).
      The information has been audited by Ernst &amp; Young <font size="1">LLP</font>,
      whose report, along with MuniYield Insured&#146;s financial statements,
      is included in the Annual Report, which accompanies this Proxy Statement
      and Prospectus. The following per share data and ratios have been derived
      from information provided in the financial statements. </font></td>
  </tr></table>

<P>
<table border=0 cellspacing=0 cellpadding=0 width=720>
  <tr>
    <td valign=top>
      <p><sub>&nbsp;</sub></p>
    </td>
    <td valign=top>
      <p>&nbsp;</p>
    </td>
    <td valign=bottom colspan="29" align="center"> <font size="1"><b>For the Year
      Ended October 31, </b> </font>
      <hr noshade size="1">
    </td>
  </tr>
  <tr valign="bottom">
    <td> <b><font size="1">Increase (Decrease) in Net Asset Value: </font> </b></td>
    <td></td>
    <td align="center"> <b><font size="1">2003 </font> </b>
      <hr noshade size="1">
    </td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="center"> <b><font size="1">2002 </font> </b>
      <hr noshade size="1">
    </td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="center"> <b><font size="1">2001&#134;&#134; </font> </b>
      <hr noshade size="1">
    </td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="center"> <b><font size="1">2000&#134;&#134; </font> </b>
      <hr noshade size="1">
    </td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="center"> <b><font size="1">1999&#134;&#134; </font> </b>
      <hr noshade size="1">
    </td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="center"> <b><font size="1">1998 </font> </b>
      <hr noshade size="1">
    </td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="center"> <b><font size="1">1997 </font> </b>
      <hr noshade size="1">
    </td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="center"> <b><font size="1">1996 </font> </b>
      <hr noshade size="1">
    </td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="center"> <b><font size="1">1995 </font> </b>
      <hr noshade size="1">
    </td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="center"> <b><font size="1">1994 </font> </b>
      <hr noshade size="1">
    </td>
    <td></td>
  </tr>
  <tr valign="bottom">
    <td><b><font size="1"> Per Share Operating Performance </font> </b></td>
    <td></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;Net asset value, beginning of year </font></td>
    <td></td>
    <td align="right"> <font size="1">$15.15 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$15.18 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$14.16 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$13.64 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$16.28 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$15.84 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$15.52 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$15.46 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$13.85 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$16.76 </font></td>
    <td align="left"></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;Investment income &#151; net </font></td>
    <td></td>
    <td align="right"> <font size="1">1.08 </font></td>
    <td align="left"> <font size="1">&#135; </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">1.07 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">1.08 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">1.09 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">1.10 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">1.15 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">1.15 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">1.18 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">1.20 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">1.20 </font></td>
    <td align="left"></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;Realized and unrealized gain (loss)
      an <br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; investments &#151; net </font></td>
    <td></td>
    <td align="right"> <font size="1">.16 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(.04 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">1.05 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">.57 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(2.14 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">.62 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">.54 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">.15 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">1.66 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(2.66 </font></td>
    <td align="left"> <font size="1">) </font></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;Dividends and distributions to <br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Preferred Stock shareholders: </font></td>
    <td></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Investment income
      &#151; net </font></td>
    <td></td>
    <td align="right"> <font size="1">(.08 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(.11 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(.23 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(.29 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(.19 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Realized gain on
      investments &#151; net </font></td>
    <td></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"> <font size="1">&#134; </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"> <font size="1">&#134; </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In excess of realized
      gain on<br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; investments &#151; net </font></td>
    <td></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(.06 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;Total from investment operations </font></td>
    <td></td>
    <td align="right"> <font size="1">1.16 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">.92 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">1.90 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">1.37 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(1.29 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">1.77 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">1.69 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">1.33 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">2.86 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(1.46 </font></td>
    <td align="left"> <font size="1">) </font></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;Less dividends and distributions to
      <br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Common Stock shareholders: </font></td>
    <td></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Investment income
      &#151; net </font></td>
    <td></td>
    <td align="right"> <font size="1">(.95 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(.95 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(.88 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(.85 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(.90 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(.88 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(.92 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(.91 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(.92 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(.98 </font></td>
    <td align="left"> <font size="1">) </font></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Realized gain on
      investments &#151; net </font></td>
    <td></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"> <font size="1">&#134; </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(.02 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(.16 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(.15 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(.09 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"> <font size="1">*** </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(.26 </font></td>
    <td align="left"> <font size="1">) </font></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In excess of realized
      gain on<br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; investments
      &#151; net </font></td>
    <td></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(.43 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(.04 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;Total dividends and distributions to<br>
      &nbsp;&nbsp;&nbsp;&nbsp; Common Stock shareholders: </font></td>
    <td></td>
    <td align="right"> <font size="1">(.95 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(.95 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(.88 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(.85 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(1.35 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(1.04 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(1.07 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(1.00 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(.96 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(1.24 </font></td>
    <td align="left"> <font size="1">) </font></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;Capital charge resulting from the <br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; issuance of Common Stock </font></td>
    <td></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(.01 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;Effect of Preferred Stock activity&#134;&#134;&#134;&#134;
      </font></td>
    <td></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Dividends and distributions
      to <br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Preferred &nbsp;Stock
      shareholders: </font></td>
    <td></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Investment income
      &#151; net </font></td>
    <td></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(.21 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(.25) </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(.24 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(.28 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(.17 </font></td>
    <td align="left"> <font size="1">) </font></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Realized gain on
      investments &#151; <br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;net </font></td>
    <td></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(.08 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(.04) </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(.03 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"> <font size="1">*** </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(.04 </font></td>
    <td align="left"> <font size="1">) </font></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In excess of realized
      gain on<br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;investments &#151; net </font></td>
    <td></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(.01 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;Total effect of Preferred Stock activity
      </font></td>
    <td></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(.29 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(.29 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(.27 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(.29 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(.21 </font></td>
    <td align="left"> <font size="1">) </font></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;Net asset value, end of year </font></td>
    <td></td>
    <td align="right"> <font size="1">$15.36 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$15.15 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$15.18 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$14.16 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$13.64 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$16.28 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$15.84 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$15.52 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$15.46 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$13.85 </font></td>
    <td align="left"></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;Market price per share, end of year
      </font></td>
    <td></td>
    <td align="right"> <font size="1">$14.51 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$14.31 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$15.06 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$12.75 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$12.875 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$16.00 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$14.8125 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$14.00 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$13.625 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$11.625 </font></td>
    <td align="left"></td>
  </tr>
  <tr valign="bottom">
    <td><font size="1"> <b>Total Investment Return* </b> </font></td>
    <td></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;Based on market price per share </font></td>
    <td></td>
    <td align="right"> <font size="1">8.19 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">1.42 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">25.49 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">5.94 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(12.04 </font></td>
    <td align="left"> <font size="1">%) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">15.55 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">13.92 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">10.30 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">26.09 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(20.23 </font></td>
    <td align="left"> <font size="1">%) </font></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;Based on net asset value per share </font></td>
    <td></td>
    <td align="right"> <font size="1">8.18 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">6.52 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">13.89 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">11.06 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(8.42 </font></td>
    <td align="left"> <font size="1">%) </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">9.95 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">9.89 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">7.76 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">20.09 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">(9.98 </font></td>
    <td align="left"> <font size="1">%) </font></td>
  </tr>
  <tr valign="bottom">
    <td><font size="1"> <b>Ratios Based on Average Net <br>
      &nbsp;&nbsp;&nbsp; Assets of Common Stock </b> </font></td>
    <td></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;Total expenses, net of reimbursement**
      </font></td>
    <td></td>
    <td align="right"> <font size="1">.94 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">.97 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">.98 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">.99 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">.94 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;Total expenses** </font></td>
    <td></td>
    <td align="right"> <font size="1">.95 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">.97 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">.98 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">.99 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">.94 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;Total investment income &#151; net**
      </font></td>
    <td></td>
    <td align="right"> <font size="1">6.99 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">7.16 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">7.34 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">7.92 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">7.26 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;Amount of dividends to Preferred <br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Stock shareholders </font></td>
    <td></td>
    <td align="right"> <font size="1">.49 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">.73 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">1.59 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">2.13 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">1.27 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;Investment income &#151; net, to Common<br>
      &nbsp;&nbsp;&nbsp;&nbsp; Stock shareholders </font></td>
    <td></td>
    <td align="right"> <font size="1">6.50 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">6.43 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">5.75 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">5.79 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">5.99 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
  </tr>
  <tr valign="bottom">
    <td><font size="1"> <b>Ratios Based on Average Net Assets <br>
      &nbsp;&nbsp;&nbsp; of Common &amp; Preferred Stock** </b> </font></td>
    <td></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;Total expenses, net of reimbursement
      </font></td>
    <td></td>
    <td align="right"> <font size="1">.64 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">.66 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">.66 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">.65 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">.64 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;Total expenses </font></td>
    <td></td>
    <td align="right"> <font size="1">.65 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">.66 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">.66 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">.65 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">.64 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">.63 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">.63 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">.64 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">.65 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">.66 </font></td>
    <td align="left"> <font size="1">% </font></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;Total investment income &#151; net </font></td>
    <td></td>
    <td align="right"> <font size="1">4.78 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">4.86 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">4.95 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">5.22 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">4.95 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">4.94 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">5.17 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">5.22 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">5.55 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">5.35 </font></td>
    <td align="left"> <font size="1">% </font></td>
  </tr>
  <tr valign="bottom">
    <td><font size="1"> <b>Ratios Based on Average Net <br>
      &nbsp;&nbsp;&nbsp;&nbsp;Assets of Preferred Stock </b> </font></td>
    <td></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;Dividends to Preferred Stock <br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shareholders </font></td>
    <td></td>
    <td align="right"> <font size="1">1.06 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">1.53 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">3.30 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">4.11 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">2.72 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
  </tr>
  <tr valign="bottom">
    <td><font size="1"> <b>Supplemental Data </b> </font></td>
    <td></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;Net assets applicable to Common <br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Stock, end of year (in thousands) </font></td>
    <td></td>
    <td align="right"> <font size="1">$953,662 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$940,852 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$940,359 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$877,390 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$844,944 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$998,819 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$971,614 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$701,473 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$698,512 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$625,630 </font></td>
    <td align="left"></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;Preferred Stock outstanding, end <br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; of year (in thousands) </font></td>
    <td></td>
    <td align="right"> <font size="1">$440,000 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$440,000 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$440,000 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$440,000 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$440,000 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$440,000 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$440,000 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$320,000 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$320,000 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$320,000 </font></td>
    <td align="left"></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;Portfolio turnover </font></td>
    <td></td>
    <td align="right"> <font size="1">114.05 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">97.34 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">99.00 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">107.11 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">121.88 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">112.78 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">98.91 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">100.49 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">59.71 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right"></td>
    <td align="right"> <font size="1">45.71 </font></td>
    <td align="left"> <font size="1">% </font></td>
  </tr>
  <tr valign="bottom">
    <td><font size="1"> <b>Leverage: </b> </font></td>
    <td></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">Asset coverage per $1,000 </font></td>
    <td></td>
    <td align="right"> <font size="1">$3,167 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$3,138 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$3,137 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$2,994 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$2,920 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$3,270 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$3,208 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$3,192 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$3,183 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$2,955 </font></td>
    <td align="left"></td>
  </tr>
  <tr valign="bottom">
    <td><font size="1"> <b>Dividends Per Share on Preferred <br>
      &nbsp;&nbsp;&nbsp;&nbsp;Stock Outstanding&#134;&#134;&#134; </b> </font></td>
    <td></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"></td>
    <td align="left"></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">Series A - Investment income &#151; net </font></td>
    <td></td>
    <td align="right"> <font size="1">$270 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$364 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$833 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$1,051 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$745 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$676 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$808 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$832 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$1,043 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$1,184 </font></td>
    <td align="left"></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">Series B - Investment income &#151; net </font></td>
    <td></td>
    <td align="right"> <font size="1">$273 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$364 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$842 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$1,051 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$675 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$737 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$813 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$835 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$1,043 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$1,090 </font></td>
    <td align="left"></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">Series C - Investment income &#151; net </font></td>
    <td></td>
    <td align="right"> <font size="1">$268 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$360 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$849 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$1,063 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$752 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$673 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$812 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$841 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$1,042 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$1,278 </font></td>
    <td align="left"></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">Series D - Investment income &#151; net </font></td>
    <td></td>
    <td align="right"> <font size="1">$247 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$348 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$825 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$986 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$637 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$728 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$789 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$865 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$950 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$1,144 </font></td>
    <td align="left"></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">Series E - Investment income &#151; net </font></td>
    <td></td>
    <td align="right"> <font size="1">$240 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$352 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$790 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$1,048 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$640 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$726 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$797 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$842 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$933 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$1,282 </font></td>
    <td align="left"></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">Series F - Investment income &#151; net </font></td>
    <td></td>
    <td align="right"> <font size="1">$274 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$359 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$860 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$1,010 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$664 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$750 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$706 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">Series G - Investment income &#151; net </font></td>
    <td></td>
    <td align="right"> <font size="1">$304 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$545 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$799 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$992 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$661 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$728 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">$675 </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
    <td align="right"></td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"></td>
  </tr>
</table>
<font size=2>&lt;/R&gt;<b></b></font>
<p><table width=600><tr><td align=right><FONT SIZE="1"><I>(footnotes on next page)</I></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: 22; page: 22" --> <br>
  <br>

<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"> Total investment returns based on market value,
      which can be significantly greater or lesser than the net asset value, may
      result in substantially different returns. Total investment returns exclude
      the effects of sales charges. &lt;R&gt;</font></td>
  </tr></table>

<table width=600><tr>
    <td width=4% align=right valign=top height="18"><font size="1">** </font></td>
    <td width=2% height="18"><font size="1"></font></td>
    <td width=94% height="18"><font size="1"> Do not reflect the effect of dividends
      to Preferred Stock shareholders. &lt;/R&gt;</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"> Amount
is less than $.01 per share. </font></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"> Amount
is less than $(.01) per share. </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"> Certain
prior year amounts have been reclassified to conform to current year  presentation. </font></td></tr></table>

<table width=600><tr><td width=4% align=right valign=top><font size="1">&#134;&#134;&#134;
</font></td><td width=2%><font size="1"></font></td><td width=94%><font size="1"> Dividends
per share have been adjusted to reflect a two-for-one stock split that  occurred on
December 1, 1994.</font></td></tr></table>

<table width=600><tr><td width=4% align=right valign=top><font size="1">&#134;&#134;&#134;&#134;
</font></td><td width=2%><font size="1"></font></td><td width=94%><font size="1"> The
Fund&#146;s Preferred Stock was issued on May 22, 1992 (Series A,B,C, D and  E) and
January 27, 1997 (Series F and G). </font></td></tr></table>

<table width=600><tr><td width=4% align=right valign=top><font size="1">&#135;</font></td><td width=2%><font size="1"></font></td><td width=94%><font size="1"> Based
on average shares outstanding. </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: 23; page: 23" -->



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

<p><table width=600><tr><td><FONT SIZE="2"><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MuniInsured Fund</I></FONT></td></tr></table>

<p><table width=600><tr>
    <td><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&lt;R&gt;The Financial Highlights
      table is intended to help you understand MuniInsured&#146;s financial performance
      for the periods shown. Certain information reflects financial results for
      a single MuniInsured share. The total returns in the table represent the
      rate an investor would have earned or lost on an investment in shares of
      MuniInsured (assuming reinvestment of all dividends). The information, has
      been audited by Deloitte &amp; Touche <FONT SIZE="1">LLP</FONT>, whose report,
      along with MuniInsured&#146;s financial statements, is included in MuniInsured&#146;s
      Annual Report, which is available upon request. The following per share
      data and ratios have been derived from information provided in the financial
      statements.</FONT> </td>
  </tr></table>

<P>
<table border=0 cellspacing=0 cellpadding=0 width=640>
  <tr>
    <td valign=top>
      <p>&nbsp;</p>
    </td>
    <td valign=top>
      <p>&nbsp;</p>
    </td>
    <td valign=bottom align="center" colspan="29"> <font size="1"><b>For the Year
      Ended September 30, </b> </font>
      <hr noshade size="1">
    </td>
  </tr>
  <tr valign="bottom">
    <td> <b><font size="1">Increase (Decrease) in Net Asset Value: </font> </b></td>
    <td>&nbsp; </td>
    <td align="center"> <font size="1"><b>2003</b></font>
      <hr noshade size="1">
    </td>
    <td align="center">&nbsp; </td>
    <td align="center">&nbsp; </td>
    <td align="center"> <font size="1"><b>2002</b></font>
      <hr noshade size="1">
    </td>
    <td align="center">&nbsp; </td>
    <td align="center">&nbsp; </td>
    <td align="center"> <font size="1"><b>2001</b></font>
      <hr noshade size="1">
    </td>
    <td align="center">&nbsp; </td>
    <td align="center">&nbsp; </td>
    <td align="center"> <font size="1"><b>2000</b></font>
      <hr noshade size="1">
    </td>
    <td align="center">&nbsp; </td>
    <td align="center">&nbsp; </td>
    <td align="center"> <font size="1"><b>1999</b></font>
      <hr noshade size="1">
    </td>
    <td align="center">&nbsp; </td>
    <td align="center">&nbsp; </td>
    <td align="center"> <font size="1"><b>1998</b></font>
      <hr noshade size="1">
    </td>
    <td align="center">&nbsp; </td>
    <td align="center">&nbsp; </td>
    <td align="center"> <font size="1"><b>1997</b></font>
      <hr noshade size="1">
    </td>
    <td align="center">&nbsp; </td>
    <td align="center">&nbsp; </td>
    <td align="center"> <font size="1"><b>1996</b></font>
      <hr noshade size="1">
    </td>
    <td align="center">&nbsp; </td>
    <td align="center">&nbsp; </td>
    <td align="center"> <font size="1"><b>1995</b></font>
      <hr noshade size="1">
    </td>
    <td align="center">&nbsp; </td>
    <td align="center">&nbsp; </td>
    <td align="center"> <font size="1"><b>1994</b></font>
      <hr noshade size="1">
    </td>
    <td align="center">&nbsp; </td>
  </tr>
  <tr valign="bottom">
    <td><b><font size="1"> Per Share Operating Performance </font> </b></td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;Net asset value, beginning of year </font></td>
    <td>&nbsp; </td>
    <td align="right"> <font size="1">$10.06 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">$9.76 </font></td>
    <td align="left">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right"> <font size="1">$9.29 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">$9.27 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">$10.30 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">$10.02 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">$9.77 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">$9.64 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">$9.50 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">$10.72 </font></td>
    <td align="left">&nbsp; </td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;Investment income &#151; net </font></td>
    <td>&nbsp; </td>
    <td align="right"> <font size="1">.47 </font></td>
    <td align="left"> <font size="1">&#134; </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">.46 </font></td>
    <td align="left">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right"> <font size="1">.46 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">.46 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">.47 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">.50 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">.51 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">.51 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">.52 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">.57 </font></td>
    <td align="left">&nbsp; </td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;Realized and unrealized gain (loss)<br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; an investments &#151; net </font></td>
    <td>&nbsp; </td>
    <td align="right"> <font size="1">(.23 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">.30 </font></td>
    <td align="left">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right"> <font size="1">.47 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">.04 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">(.84 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">.43 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">.31 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">.13 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">.34 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">(.99 </font></td>
    <td align="left"> <font size="1">) </font></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;Total from investment operations. </font></td>
    <td>&nbsp; </td>
    <td align="right"> <font size="1">.24 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">.76 </font></td>
    <td align="left">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right"> <font size="1">.93 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">.50 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">(.37 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">.93 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">.82 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">.64 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">.86 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">(.42 </font></td>
    <td align="left"> <font size="1">) </font></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;Less dividends and distributions: </font></td>
    <td>&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="left">&nbsp; </td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investment income
      &#151; net </font></td>
    <td>&nbsp; </td>
    <td align="right"> <font size="1">(.46 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">(.46 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="left">&nbsp; </td>
    <td align="right"> <font size="1">(.46 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">(.46 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">(.47 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">(.50 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">(.51 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">(.51 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">(.53 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">(.57 </font></td>
    <td align="left"> <font size="1">) </font></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Realized gain on investments
      &#151; net </font></td>
    <td>&nbsp; </td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">(.15 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">(.15 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">(.06 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">(.19 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">(.23 </font></td>
    <td align="left"> <font size="1">) </font></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In excess of realized
      gain on <br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; investments &#151; net
      </font></td>
    <td>&nbsp; </td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">(.02 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">(.04 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left"> <font size="1">** </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">&#151; </font></td>
    <td align="left">&nbsp; </td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;Total dividends and distributions </font></td>
    <td>&nbsp; </td>
    <td align="right"> <font size="1">(.46 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">(.46 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="left">&nbsp; </td>
    <td align="right"> <font size="1">(.46 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">(.48 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">(.66 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">(.65 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">(.57 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">(.51 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">(.72 </font></td>
    <td align="left"> <font size="1">) </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">(.80 </font></td>
    <td align="left"> <font size="1">) </font></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;Net asset value, end of year </font></td>
    <td>&nbsp; </td>
    <td align="right"> <font size="1">$9.84 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">$10.06 </font></td>
    <td align="left">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right"> <font size="1">$9.76 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">$9.29 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">$9.27 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">$10.30 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">$10.02 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">$9.77 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">$9.64 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">$9.50 </font></td>
    <td align="left">&nbsp; </td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;Market price per share, end of year
      </font></td>
    <td>&nbsp; </td>
    <td align="right"> <font size="1">$9.73 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">$9.64 </font></td>
    <td align="left">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right"> <font size="1">$8.92 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">$8.1875 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">$8.00 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">$9.8125 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">$9.50 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">$8.75 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">$8.75 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">$8.75 </font></td>
    <td align="left">&nbsp; </td>
  </tr>
  <tr valign="bottom">
    <td><font size="1"> <b>Total Investment Return* </b> </font></td>
    <td>&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="left">&nbsp; </td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;Based on market price per share </font></td>
    <td>&nbsp; </td>
    <td align="right"> <font size="1">5.91 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">13.52 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="left">&nbsp; </td>
    <td align="right"> <font size="1">14.84 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">8.79 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">(12.58 </font></td>
    <td align="left"> <font size="1">%) </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">10.55 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">15.73 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">5.91 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">8.46 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">(12.93 </font></td>
    <td align="left"> <font size="1">%) </font></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;Based on net asset value per share </font></td>
    <td>&nbsp; </td>
    <td align="right"> <font size="1">2.64 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">8.27 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="left">&nbsp; </td>
    <td align="right"> <font size="1">10.74 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">6.53 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">(3.49 </font></td>
    <td align="left"> <font size="1">%) </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">10.02 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">9.33 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">7.34 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">10.06 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">(4.10 </font></td>
    <td align="left"> <font size="1">%) </font></td>
  </tr>
  <tr valign="bottom">
    <td><font size="1"> <b>Ratios to Average Net Assets </b> </font></td>
    <td>&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="left">&nbsp; </td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;Expenses, net reimbursement </font></td>
    <td>&nbsp; </td>
    <td align="right"> <font size="1">.79 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">.82 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="left">&nbsp; </td>
    <td align="right"> <font size="1">.83 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">.79 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">.78 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">.77 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">.78 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">.78 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">.79 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">.77 </font></td>
    <td align="left"> <font size="1">% </font></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;Expenses </font></td>
    <td>&nbsp; </td>
    <td align="right"> <font size="1">.79 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">.82 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="left">&nbsp; </td>
    <td align="right"> <font size="1">.83 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">.79 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">.78 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">.77 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">.78 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">.78 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">.79 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">.77 </font></td>
    <td align="left"> <font size="1">% </font></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;Investment income &#151; net </font></td>
    <td>&nbsp; </td>
    <td align="right"> <font size="1">4.73 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">4.78 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="left">&nbsp; </td>
    <td align="right"> <font size="1">4.84 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">5.06 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">4.74 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">4.96 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">5.15 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">5.15 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">5.55 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">5.58 </font></td>
    <td align="left"> <font size="1">% </font></td>
  </tr>
  <tr valign="bottom">
    <td><font size="1"> <b>Supplemental Data </b> </font></td>
    <td>&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="left">&nbsp; </td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;Net assets, end of year (in thousands)
      </font></td>
    <td>&nbsp; </td>
    <td align="right"> <font size="1">$79,495 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">$81,299 </font></td>
    <td align="left">&nbsp; </td>
    <td align="left">&nbsp; </td>
    <td align="right"> <font size="1">$78,840 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">$75,025 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">$74,884 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">$83,255 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">$80,963 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">$78,916 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">$77,858 </font></td>
    <td align="left">&nbsp; </td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">$76,662 </font></td>
    <td align="left">&nbsp; </td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1">&nbsp;&nbsp;&nbsp;Portfolio turnover </font></td>
    <td>&nbsp; </td>
    <td align="right"> <font size="1">92.60 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">50.88 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="left">&nbsp; </td>
    <td align="right"> <font size="1">66.75 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">71.12 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">71.48 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">53.14 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">73.22 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">94.61 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">83.52 </font></td>
    <td align="left"> <font size="1">% </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="1">47.17 </font></td>
    <td align="left"> <font size="1">% </font></td>
  </tr>
  <tr valign="bottom">
    <td><font size=2>&lt;/R&gt;<b></b></font></td>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="left">&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"> Total
investment returns based on market value, which can be significantly  greater or lesser
than the net asset value, may result in substantially  different returns. Total
investment returns exclude the effects of sales  charges. </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">Amount
is less than $.01  per share. </font></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"> Based
on average shares outstanding. </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;





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



<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">&lt;R&gt;</font></td>
  </tr>
  <tr>
    <td><font size=2><B>MuniYield Insured <BR>
      Traded on the New York Stock Exchange</B></font></td>
  </tr>
</table>

<table border=0 cellspacing=0 cellpadding=0 width="600">
  <tr align="center" valign="bottom">
    <td width="222">&nbsp; </td>
    <td align="center" colspan="3"> <b><font size="1">Market Price** </font></b>
      <hr noshade size="1">
    </td>
    <td align="center" width="28">&nbsp; </td>
    <td align="center" colspan="3"> <b><font size="1">Net Asset Value </font></b>
      <hr noshade size="1">
    </td>
    <td align="center" width="19">&nbsp; </td>
    <td align="center" colspan="3"> <b><font size="1">Premium (Discount)<br>
      To Net Asset Value </font></b>
      <hr noshade size="1">
    </td>
  </tr>
  <tr align="center" valign="bottom">
    <td align="left" width="222"> <b><font size="1">Quarter Ended* </font></b>
      <hr noshade size="1" width="30%" align="left">
    </td>
    <td align="center" width="43"> <b><font size="1">High </font></b>
      <hr noshade size="1">
    </td>
    <td align="center" width="24"> <b><font size="1">&nbsp;&nbsp; </font></b></td>
    <td align="center" width="43"> <b><font size="1">Low </font></b>
      <hr noshade size="1">
    </td>
    <td align="center" width="28"> <b><font size="1">&nbsp;&nbsp; </font></b></td>
    <td align="center" width="50"> <b><font size="1">High </font></b>
      <hr noshade size="1">
    </td>
    <td align="center" width="17"> <b><font size="1">&nbsp;&nbsp; </font></b></td>
    <td align="center" width="45"> <b><font size="1">Low </font></b>
      <hr noshade size="1">
    </td>
    <td align="center" width="19"> <b><font size="1">&nbsp;&nbsp; </font></b></td>
    <td align="center" width="46"> <b><font size="1">High </font></b>
      <hr noshade size="1">
    </td>
    <td align="center" width="16"> <b><font size="1">&nbsp;&nbsp; </font></b></td>
    <td align="center" width="47"> <b><font size="1">Low </font></b>
      <hr noshade size="1">
    </td>
  </tr>
  <tr valign="bottom">
    <td width="222"><font size="2"></font></td>
    <td align="center" width="43"><font size="2">$</font></td>
    <td align="center" width="24"><font size="2"></font></td>
    <td align="center" width="43"><font size="2">$</font></td>
    <td align="center" width="28"><font size="2"></font></td>
    <td align="center" width="50"><font size="2">$</font></td>
    <td align="center" width="17"><font size="2"></font></td>
    <td align="center" width="45"><font size="2">$</font></td>
    <td align="center" width="19"><font size="2"></font></td>
    <td align="center" width="46"><font size="2">%</font></td>
    <td align="center" width="16"><font size="2"></font></td>
    <td align="center" width="47"><font size="2">%</font></td>
  </tr>
  <tr valign="bottom">
    <td width="222"> <font size="2">July 31, 2001 </font></td>
    <td align="center" width="43"><font size="2">14.79 </font></td>
    <td align="center" width="24">&nbsp; </td>
    <td align="center" width="43"><font size="2">14.16 </font></td>
    <td align="center" width="28">&nbsp; </td>
    <td align="center" width="50"><font size="2">14.92 </font></td>
    <td align="center" width="17">&nbsp; </td>
    <td align="center" width="45"><font size="2">14.44 </font></td>
    <td align="center" width="19">&nbsp; </td>
    <td align="center" width="46"><font size="2">0.61 </font></td>
    <td align="center" width="16">&nbsp; </td>
    <td align="center" width="47"><font size="2">-2.81 </font></td>
  </tr>
  <tr valign="bottom">
    <td width="222"> <font size="2">October 31, 2001 </font></td>
    <td align="center" width="43"><font size="2">15.21 </font></td>
    <td align="center" width="24">&nbsp; </td>
    <td align="center" width="43"><font size="2">13.90 </font></td>
    <td align="center" width="28">&nbsp; </td>
    <td align="center" width="50"><font size="2">15.27 </font></td>
    <td align="center" width="17">&nbsp; </td>
    <td align="center" width="45"><font size="2">14.92 </font></td>
    <td align="center" width="19">&nbsp; </td>
    <td align="center" width="46"><font size="2">0.07 </font></td>
    <td align="center" width="16">&nbsp; </td>
    <td align="center" width="47"><font size="2">-7.21 </font></td>
  </tr>
  <tr valign="bottom">
    <td width="222"> <font size="2">January 31, 2002 </font></td>
    <td align="center" width="43"><font size="2">15.57 </font></td>
    <td align="center" width="24">&nbsp; </td>
    <td align="center" width="43"><font size="2">14.25 </font></td>
    <td align="center" width="28">&nbsp; </td>
    <td align="center" width="50"><font size="2">15.37 </font></td>
    <td align="center" width="17">&nbsp; </td>
    <td align="center" width="45"><font size="2">14.35 </font></td>
    <td align="center" width="19">&nbsp; </td>
    <td align="center" width="46"><font size="2">1.50 </font></td>
    <td align="center" width="16">&nbsp; </td>
    <td align="center" width="47"><font size="2">-1.83 </font></td>
  </tr>
  <tr valign="bottom">
    <td width="222"> <font size="2">April 30, 2002 </font></td>
    <td align="center" width="43"><font size="2">15.02 </font></td>
    <td align="center" width="24">&nbsp; </td>
    <td align="center" width="43"><font size="2">13.54 </font></td>
    <td align="center" width="28">&nbsp; </td>
    <td align="center" width="50"><font size="2">14.99 </font></td>
    <td align="center" width="17">&nbsp; </td>
    <td align="center" width="45"><font size="2">14.50 </font></td>
    <td align="center" width="19">&nbsp; </td>
    <td align="center" width="46"><font size="2">1.28 </font></td>
    <td align="center" width="16">&nbsp; </td>
    <td align="center" width="47"><font size="2">-6.95 </font></td>
  </tr>
  <tr valign="bottom">
    <td width="222"> <font size="2">July 31, 2002 </font></td>
    <td align="center" width="43"><font size="2">14.96 </font></td>
    <td align="center" width="24">&nbsp; </td>
    <td align="center" width="43"><font size="2">14.01</font></td>
    <td align="center" width="28">&nbsp; </td>
    <td align="center" width="50"><font size="2">15.13 </font></td>
    <td align="center" width="17">&nbsp; </td>
    <td align="center" width="45"><font size="2">14.63 </font></td>
    <td align="center" width="19">&nbsp; </td>
    <td align="center" width="46"><font size="2">0.20 </font></td>
    <td align="center" width="16">&nbsp; </td>
    <td align="center" width="47"><font size="2">-5.21 </font></td>
  </tr>
  <tr valign="bottom">
    <td width="222"> <font size="2">October 31, 2002 </font></td>
    <td align="center" width="43"><font size="2">15.30 </font></td>
    <td align="center" width="24">&nbsp; </td>
    <td align="center" width="43"><font size="2">13.59 </font></td>
    <td align="center" width="28">&nbsp; </td>
    <td align="center" width="50"><font size="2">15.78 </font></td>
    <td align="center" width="17">&nbsp; </td>
    <td align="center" width="45"><font size="2">14.78 </font></td>
    <td align="center" width="19">&nbsp; </td>
    <td align="center" width="46"><font size="2">-1.06 </font></td>
    <td align="center" width="16">&nbsp; </td>
    <td align="center" width="47"><font size="2">-8.06 </font></td>
  </tr>
  <tr valign="bottom">
    <td width="222"> <font size="2">January 31, 2003 </font></td>
    <td align="center" width="43"><font size="2">14.53 </font></td>
    <td align="center" width="24">&nbsp;&nbsp;&nbsp; </td>
    <td align="center" width="43"><font size="2">13.69 </font></td>
    <td align="center" width="28">&nbsp;&nbsp;&nbsp; </td>
    <td align="center" width="50"><font size="2">15.37 </font></td>
    <td align="center" width="17">&nbsp;&nbsp;&nbsp; </td>
    <td align="center" width="45"><font size="2">14.96 </font></td>
    <td align="center" width="19">&nbsp;&nbsp;&nbsp; </td>
    <td align="center" width="46"><font size="2">-5.08 </font></td>
    <td align="center" width="16">&nbsp;&nbsp;&nbsp; </td>
    <td align="center" width="47"><font size="2">-9.40 </font></td>
  </tr>
  <tr valign="bottom">
    <td width="222"> <font size="2">April 30, 2003 </font></td>
    <td align="center" width="43"><font size="2">14.76 </font></td>
    <td align="center" width="24">&nbsp; </td>
    <td align="center" width="43"><font size="2">14.14 </font></td>
    <td align="center" width="28">&nbsp; </td>
    <td align="center" width="50"><font size="2">15.64 </font></td>
    <td align="center" width="17">&nbsp; </td>
    <td align="center" width="45"><font size="2">15.09 </font></td>
    <td align="center" width="19">&nbsp; </td>
    <td align="center" width="46"><font size="2">-4.44 </font></td>
    <td align="center" width="16">&nbsp; </td>
    <td align="center" width="47"><font size="2">-7.66 </font></td>
  </tr>
  <tr valign="bottom">
    <td width="222" height="20"> <font size="2">July 31, 2003 </font></td>
    <td align="center" width="43" height="20"><font size="2">15.46 </font></td>
    <td align="center" width="24" height="20">&nbsp; </td>
    <td align="center" width="43" height="20"><font size="2">13.97 </font></td>
    <td align="center" width="28" height="20">&nbsp; </td>
    <td align="center" width="50" height="20"><font size="2">16.18 </font></td>
    <td align="center" width="17" height="20">&nbsp; </td>
    <td align="center" width="45" height="20"><font size="2">14.83 </font></td>
    <td align="center" width="19" height="20">&nbsp; </td>
    <td align="center" width="46" height="20"><font size="2">-2.30 </font></td>
    <td align="center" width="16" height="20">&nbsp; </td>
    <td align="center" width="47" height="20"><font size="2">-8.57 </font></td>
  </tr>
  <tr valign="bottom">
    <td width="222"> <font size="2">October 31, 2003 </font></td>
    <td align="center" width="43"><font size="2">14.58 </font></td>
    <td align="center" width="24">&nbsp; </td>
    <td align="center" width="43"><font size="2">14.01 </font></td>
    <td align="center" width="28">&nbsp; </td>
    <td align="center" width="50"><font size="2">15.49 </font></td>
    <td align="center" width="17">&nbsp; </td>
    <td align="center" width="45"><font size="2">14.75 </font></td>
    <td align="center" width="19">&nbsp; </td>
    <td align="center" width="46"><font size="2">-3.84 </font></td>
    <td align="center" width="16">&nbsp; </td>
    <td align="center" width="47"><font size="2">-6.76 </font></td>
  </tr>
  <tr valign="bottom">
    <td width="222"> <font size="2">January 31, 2004 </font></td>
    <td align="center" width="43"><font size="2">15.13 </font></td>
    <td align="center" width="24">&nbsp; </td>
    <td align="center" width="43"><font size="2">14.35 </font></td>
    <td align="center" width="28">&nbsp; </td>
    <td align="center" width="50"><font size="2">15.92 </font></td>
    <td align="center" width="17">&nbsp; </td>
    <td align="center" width="45"><font size="2">15.31 </font></td>
    <td align="center" width="19">&nbsp; </td>
    <td align="center" width="46"><font size="2">-4.28 </font></td>
    <td align="center" width="16">&nbsp; </td>
    <td align="center" width="47"><font size="2">-7.34 </font></td>
  </tr>
  <tr valign="bottom">
    <td width="222">&nbsp; </td>
    <td align="center" width="43">&nbsp; </td>
    <td align="center" width="24">&nbsp; </td>
    <td align="center" width="43">&nbsp; </td>
    <td align="center" width="28">&nbsp; </td>
    <td align="center" width="50">&nbsp; </td>
    <td align="center" width="17">&nbsp; </td>
    <td align="center" width="45">&nbsp; </td>
    <td align="center" width="19">&nbsp; </td>
    <td align="center" width="46">&nbsp; </td>
    <td align="center" width="16">&nbsp; </td>
    <td align="center" width="47">&nbsp; </td>
  </tr>
  <tr valign="bottom">
    <td width="222">&nbsp; </td>
    <td align="center" width="43">&nbsp; </td>
    <td align="center" width="24">&nbsp; </td>
    <td align="center" width="43">&nbsp; </td>
    <td align="center" width="28">&nbsp; </td>
    <td align="center" width="50">&nbsp; </td>
    <td align="center" width="17">&nbsp; </td>
    <td align="center" width="45">&nbsp; </td>
    <td align="center" width="19">&nbsp; </td>
    <td align="center" width="46">&nbsp; </td>
    <td align="center" width="16">&nbsp; </td>
    <td align="center" width="47">&nbsp; </td>
  </tr>
  <tr valign="bottom">
    <td colspan="2">
      <p><font size="2"><b>MuniInsured <br>
        Traded on the American Stock Exchange </b></font></p>
    </td>
    <td align="center" width="24">&nbsp; </td>
    <td align="center" width="43">&nbsp; </td>
    <td align="center" width="28">&nbsp; </td>
    <td align="center" width="50">&nbsp; </td>
    <td align="center" width="17">&nbsp; </td>
    <td align="center" width="45">&nbsp; </td>
    <td align="center" width="19">&nbsp; </td>
    <td align="center" width="46">&nbsp; </td>
    <td align="center" width="16">&nbsp; </td>
    <td align="center" width="47">&nbsp; </td>
  </tr>
  <tr valign="bottom">
    <td width="222">&nbsp; </td>
    <td align="center" width="43">&nbsp; </td>
    <td align="center" width="24">&nbsp; </td>
    <td align="center" width="43">&nbsp; </td>
    <td align="center" width="28">&nbsp; </td>
    <td align="center" width="50">&nbsp; </td>
    <td align="center" width="17">&nbsp; </td>
    <td align="center" width="45">&nbsp; </td>
    <td align="center" width="19">&nbsp; </td>
    <td align="center" width="46">&nbsp; </td>
    <td align="center" width="16">&nbsp; </td>
    <td align="center" width="47">&nbsp; </td>
  </tr>
  <tr valign="bottom">
    <td width="222">&nbsp; </td>
    <td align="center" colspan="3"> <font size="1"><b>Market Price** </b> </font>
      <hr noshade size="1">
    </td>
    <td align="center" width="28">&nbsp; </td>
    <td align="center" colspan="3"> <font size="1"><b>Net Asset Value </b> </font>
      <hr noshade size="1">
    </td>
    <td align="center" width="19">&nbsp; </td>
    <td align="center" colspan="3"> <font size="1"><b>Premium (Discount)<br>
      To Net Asset Value </b> </font>
      <hr noshade size="1">
    </td>
  </tr>
  <tr valign="bottom">
    <td width="222"> <font size="1"><b>Quarter Ended* </b> </font>
      <hr noshade size="1" width="30%" align="left">
    </td>
    <td align="center" width="43"> <font size="1"><b>High </b> </font>
      <hr noshade size="1">
    </td>
    <td align="center" width="24"> <font size="1"><b>&nbsp;&nbsp; </b> </font></td>
    <td align="center" width="43"> <font size="1"><b>Low </b> </font>
      <hr noshade size="1">
    </td>
    <td align="center" width="28"> <font size="1"><b>&nbsp;&nbsp; </b> </font></td>
    <td align="center" width="50"> <font size="1"><b>High </b> </font>
      <hr noshade size="1">
    </td>
    <td align="center" width="17"> <font size="1"><b>&nbsp;&nbsp; </b> </font></td>
    <td align="center" width="45"> <font size="1"><b>Low </b> </font>
      <hr noshade size="1">
    </td>
    <td align="center" width="19"> <font size="1"><b>&nbsp;&nbsp; </b> </font></td>
    <td align="center" width="46"> <font size="1"><b>High </b> </font>
      <hr noshade size="1">
    </td>
    <td align="center" width="16"> <font size="1"><b>&nbsp;&nbsp; </b> </font></td>
    <td align="center" width="47"> <font size="1"><b>Low </b> </font>
      <hr noshade size="1">
    </td>
  </tr>
  <tr valign="bottom">
    <td width="222"><font size="2"></font></td>
    <td align="center" width="43"><font size="2">$</font></td>
    <td align="center" width="24"><font size="2"></font></td>
    <td align="center" width="43"><font size="2">$</font></td>
    <td align="center" width="28"><font size="2"></font></td>
    <td align="center" width="50"><font size="2">$</font></td>
    <td align="center" width="17"><font size="2"></font></td>
    <td align="center" width="45"><font size="2">$</font></td>
    <td align="center" width="19"><font size="2"></font></td>
    <td align="center" width="46"><font size="2">%</font></td>
    <td align="center" width="16"><font size="2"></font></td>
    <td align="center" width="47"><font size="2">%</font></td>
  </tr>
  <tr valign="bottom">
    <td width="222"> <font size="2">September 30, 2001 </font></td>
    <td align="right" width="43"><font size="2">9.23 </font></td>
    <td align="center" width="24">&nbsp; </td>
    <td align="center" width="43"><font size="2">8.70 </font></td>
    <td align="center" width="28">&nbsp; </td>
    <td align="center" width="50"><font size="2">9.86 </font></td>
    <td align="center" width="17">&nbsp; </td>
    <td align="center" width="45"><font size="2">9.59 </font></td>
    <td align="center" width="19">&nbsp; </td>
    <td align="center" width="46"><font size="2">-6.10 </font></td>
    <td align="center" width="16">&nbsp; </td>
    <td align="right" width="47"><font size="2">-10.77 </font></td>
  </tr>
  <tr valign="bottom">
    <td width="222"> <font size="2">December 31, 2001 </font></td>
    <td align="right" width="43"><font size="2">9.35 </font></td>
    <td align="center" width="24">&nbsp; </td>
    <td align="center" width="43"><font size="2">8.65 </font></td>
    <td align="center" width="28">&nbsp; </td>
    <td align="center" width="50"><font size="2">9.92 </font></td>
    <td align="center" width="17">&nbsp; </td>
    <td align="center" width="45"><font size="2">9.46 </font></td>
    <td align="center" width="19">&nbsp; </td>
    <td align="center" width="46"><font size="2">-5.46 </font></td>
    <td align="center" width="16">&nbsp; </td>
    <td align="right" width="47"><font size="2">-10.73 </font></td>
  </tr>
  <tr valign="bottom">
    <td width="222"> <font size="2">March 31, 2002 </font></td>
    <td align="right" width="43"><font size="2">9.30 </font></td>
    <td align="center" width="24">&nbsp; </td>
    <td align="center" width="43"><font size="2">8.66 </font></td>
    <td align="center" width="28">&nbsp; </td>
    <td align="center" width="50"><font size="2">9.74 </font></td>
    <td align="center" width="17">&nbsp; </td>
    <td align="center" width="45"><font size="2">9.54 </font></td>
    <td align="center" width="19">&nbsp; </td>
    <td align="center" width="46"><font size="2">-2.62 </font></td>
    <td align="center" width="16">&nbsp; </td>
    <td align="right" width="47"><font size="2">-9.51 </font></td>
  </tr>
  <tr valign="bottom">
    <td width="222"> <font size="2">June 30, 2002 </font></td>
    <td align="right" width="43"><font size="2">9.67 </font></td>
    <td align="center" width="24">&nbsp; </td>
    <td align="center" width="43"><font size="2">9.20 </font></td>
    <td align="center" width="28">&nbsp; </td>
    <td align="center" width="50"><font size="2">9.73 </font></td>
    <td align="center" width="17">&nbsp; </td>
    <td align="center" width="45"><font size="2">9.55 </font></td>
    <td align="center" width="19">&nbsp; </td>
    <td align="center" width="46"><font size="2">-2.06 </font></td>
    <td align="center" width="16">&nbsp; </td>
    <td align="right" width="47"><font size="2">-4.95 </font></td>
  </tr>
  <tr valign="bottom">
    <td width="222"> <font size="2">September 30, 2002 </font></td>
    <td align="right" width="43"><font size="2">9.69 </font></td>
    <td align="center" width="24">&nbsp; </td>
    <td align="center" width="43"><font size="2">9.16 </font></td>
    <td align="center" width="28">&nbsp; </td>
    <td align="center" width="50"><font size="2">10.07&nbsp;&nbsp; </font></td>
    <td align="center" width="17">&nbsp; </td>
    <td align="center" width="45"><font size="2">9.69 </font></td>
    <td align="center" width="19">&nbsp; </td>
    <td align="center" width="46"><font size="2">-1.22 </font></td>
    <td align="center" width="16">&nbsp; </td>
    <td align="right" width="47"><font size="2">-6.72 </font></td>
  </tr>
  <tr valign="bottom">
    <td width="222"> <font size="2">December 31, 2002 </font></td>
    <td align="right" width="43"><font size="2">9.65 </font></td>
    <td align="center" width="24">&nbsp; </td>
    <td align="center" width="43"><font size="2">9.00 </font></td>
    <td align="center" width="28">&nbsp; </td>
    <td align="center" width="50"><font size="2">10.05 &nbsp;&nbsp;</font></td>
    <td align="center" width="17">&nbsp; </td>
    <td align="center" width="45"><font size="2">9.65 </font></td>
    <td align="center" width="19">&nbsp; </td>
    <td align="center" width="46"><font size="2">-2.83 </font></td>
    <td align="center" width="16">&nbsp; </td>
    <td align="right" width="47"><font size="2">-7.87 </font></td>
  </tr>
  <tr valign="bottom">
    <td width="222"> <font size="2">March 31, 2003 </font></td>
    <td align="right" width="43"><font size="2">9.64 </font></td>
    <td align="center" width="24">&nbsp; </td>
    <td align="center" width="43"><font size="2">9.20 </font></td>
    <td align="center" width="28">&nbsp; </td>
    <td align="center" width="50"><font size="2">9.98 </font></td>
    <td align="center" width="17">&nbsp; </td>
    <td align="center" width="45"><font size="2">9.74 </font></td>
    <td align="center" width="19">&nbsp; </td>
    <td align="center" width="46"><font size="2">-1.83 </font></td>
    <td align="center" width="16">&nbsp; </td>
    <td align="right" width="47"><font size="2">-6.19 </font></td>
  </tr>
  <tr valign="bottom">
    <td width="222"> <font size="2">June 30, 2003 </font></td>
    <td align="right" width="43"><font size="2">10.13 </font></td>
    <td align="center" width="24">&nbsp; </td>
    <td align="center" width="43"><font size="2">9.33 </font></td>
    <td align="center" width="28">&nbsp; </td>
    <td align="center" width="50"><font size="2">10.18 &nbsp;&nbsp;</font></td>
    <td align="center" width="17">&nbsp; </td>
    <td align="center" width="45"><font size="2">9.79 </font></td>
    <td align="center" width="19">&nbsp; </td>
    <td align="center" width="46"><font size="2">-0.20 </font></td>
    <td align="center" width="16">&nbsp; </td>
    <td align="right" width="47"><font size="2">-5.09 </font></td>
  </tr>
  <tr valign="bottom">
    <td width="222"> <font size="2">September 30, 2003 </font></td>
    <td align="right" width="43"><font size="2">9.88 </font></td>
    <td align="center" width="24">&nbsp; </td>
    <td align="center" width="43"><font size="2">9.20 </font></td>
    <td align="center" width="28">&nbsp; </td>
    <td align="center" width="50"><font size="2">9.97 </font></td>
    <td align="center" width="17">&nbsp; </td>
    <td align="center" width="45"><font size="2">9.52 </font></td>
    <td align="center" width="19">&nbsp; </td>
    <td align="center" width="46"><font size="2">0.52 </font></td>
    <td align="center" width="16">&nbsp; </td>
    <td align="right" width="47"><font size="2">-4.06 </font></td>
  </tr>
  <tr valign="bottom">
    <td width="222"> <font size="2">December 31, 2003 </font></td>
    <td align="right" width="43"><font size="2">9.99 </font></td>
    <td align="center" width="24">&nbsp; </td>
    <td align="center" width="43"><font size="2">9.33 </font></td>
    <td align="center" width="28">&nbsp; </td>
    <td align="center" width="50"><font size="2">9.93 </font></td>
    <td align="center" width="17">&nbsp; </td>
    <td align="center" width="45"><font size="2">9.65 </font></td>
    <td align="center" width="19">&nbsp; </td>
    <td align="center" width="46"><font size="2">0.81 </font></td>
    <td align="center" width="16">&nbsp; </td>
    <td align="right" width="47"><font size="2">-4.65 </font></td>
  </tr>
  <tr valign="bottom">
    <td width="222"> <font size="2">March 31, 2004 </font></td>
    <td align="right" width="43"><font size="2">10.10 </font></td>
    <td align="center" width="24">&nbsp; </td>
    <td align="center" width="43"><font size="2">9.65 </font></td>
    <td align="center" width="28">&nbsp; </td>
    <td align="center" width="50"><font size="2">9.93 </font></td>
    <td align="center" width="17">&nbsp; </td>
    <td align="center" width="45"><font size="2">9.90 </font></td>
    <td align="center" width="19">&nbsp; </td>
    <td align="center" width="46"><font size="2">1.01 </font></td>
    <td align="center" width="16">&nbsp; </td>
    <td align="right" width="47"><font size="2">-3.27 </font></td>
  </tr>
  <tr valign="bottom">
    <td width="222"><font size="2">&lt;/R&gt;</font></td>
    <td align="right" width="43">&nbsp;</td>
    <td align="center" width="24">&nbsp;</td>
    <td align="center" width="43">&nbsp;</td>
    <td align="center" width="28">&nbsp;</td>
    <td align="center" width="50">&nbsp;</td>
    <td align="center" width="17">&nbsp;</td>
    <td align="center" width="45">&nbsp;</td>
    <td align="center" width="19">&nbsp;</td>
    <td align="center" width="46">&nbsp;</td>
    <td align="center" width="16">&nbsp;</td>
    <td align="right" width="47">&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;&lt;R&gt;For the periods shown,
      share prices for MuniYield Insured&#146;s Common Stock have traded between
      a maximum premium of approximately 1.50% and a maximum discount of approximately
      (9.40%). For the periods shown, share prices for MuniInsured&#146;s common
      stock have traded between a maximum premium of approximately 1.01% and a
      maximum discount of approximately (10.77%). 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 Common Stock of the Combined
      Fund will trade at a premium or discount to their net asset value following
      the Reorganization, or what the extent of any such premium or discount might
      be.&lt;/R&gt; </font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2><B>Investment Objectives 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 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. 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;&lt;R&gt;<b></b>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. This policy is a fundamental policy
      of each Fund and may not be changed without shareholder approval. In addition,
      under &lt;/R&gt;<b></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">
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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<p><table width=600><tr>
    <td><font size=2>&lt;R&gt;<b></b>normal circumstances, each Fund 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. 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. &lt;/R&gt;<b></b></font></td>
  </tr></table>

<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;&lt;R&gt;<b></b>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;Description
      of Bond Ratings&#148; and Exhibit IV&#151;&#147;Portfolio Insurance.&#148;
      &lt;/R&gt;<b></b> </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 </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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<p><table width=600><tr><td><font size=2>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><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>&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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<!-- MARKER PAGE="sheet: 27; page: 27" -->



<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 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;&lt;R&gt;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 Proxy Statement and Prospectus, Non-Municipal
      Tax-Exempt Securities as discussed above will be considered Municipal Bonds.&lt;/R&gt;
      </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  such bonds. The repayment of principal and the payment of
interest on such IDBs</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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<!-- MARKER PAGE="sheet: 28; page: 28" -->



<p><table width=600><tr><td><font size=2>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;<i>&nbsp;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 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">
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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<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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;&lt;R&gt;<b></b>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 maintain 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.
      &lt;/R&gt;<b></b> </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><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 </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>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><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 </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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<!-- MARKER PAGE="sheet: 31; page: 31" -->



<p><table width=600><tr><td><font size=2>(<I>i.e.</I>, 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;Restrictions
on OTC Options. 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><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>&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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<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>i.e.</I>, 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 (<I>e.g.</I>, 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 (<I>e.g.</I>, 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><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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;&lt;R&gt;<b></b>The Funds have
      substantially similar investment restrictions. Certain of the investment
      restrictions are fundamental policies of each Fund and (i) with respect
      to MuniInsured, may not be changed without the approval of a majority of
      the outstanding shares of MuniInsured Common Stock, voting together as a
      single class, and (ii) with respect to MuniYield Insured, may not be changed
      without the approval of a majority of the outstanding &lt;R&gt;<b></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">
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;





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<p><table width=600><tr>
    <td><font size=2>&lt;R&gt;<b></b>shares of MuniYield Insured Common Stock
      and 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. &lt;/R&gt;<b></b></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 subdivisions
are not considered to be part of any industry.</font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&lt;R&gt;<b></b>MuniYield Insured
      has adopted a non-fundamental investment restriction that 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. &lt;/R&gt;<b></b></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>&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;





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<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&lt;R&gt;For so long as shares
      of its AMPS are rated by Moody&#146;s, MuniYield Insured will not change
      its fundamental 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 ML &amp; Co. 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 the terms and 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 the terms and 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 by the SEC. &lt;/R&gt;</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 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;&lt;R&gt;<b></b>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
      65.15%, 32.33% and 2.52% 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 73.35%, 23.15% and
      3.50% of the market value of its portfolio was invested in revenue bonds,
      general obligation bonds, and cash equivalents, respectively. &lt;/R&gt;<b></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">
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;





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



<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;&lt;R&gt;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. &lt;/R&gt;</font></td>
  </tr></table>

<P><table border=0 cellspacing=0 cellpadding=0 width="600">
    <tr>
      <td valign=top width=96>
        <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
      </td>
      <td valign=bottom align="center" width=54> <font size="1"><b>S&amp;P* </b> </font>
        <hr noshade size="1">
      </td>
      <td valign=bottom align="center" width=6> <font size="1"><b>&nbsp;&nbsp; </b> </font></td>
      <td valign=bottom align="center" width=77> <font size="1"><b>Moody&#146;s* </b> </font>
        <hr noshade size="1">
      </td>
      <td valign=bottom align="center" width=6> <font size="1"><b>&nbsp;&nbsp; </b> </font></td>
      <td valign=bottom align="center" colspan="2"> <font size="1"><b>Number of<br>
         Issues </b> </font>
        <hr noshade size="1">
      </td>
      <td valign=bottom align="center" width=6> <font size="1"><b>&nbsp;&nbsp; </b> </font></td>
      <td valign=bottom align="center" colspan="2"> <font size="1"><b>Value<br>
         (in thousands) </b> </font>
        <hr noshade size="1">
      </td>
      <td valign=bottom align="center" width=26> <font size="1"><b>&nbsp;&nbsp; </b> </font></td>
      <td valign=bottom align="center" colspan="2"> <font size="1"><b>Percent </b> </font>
        &nbsp;
        <hr noshade size="1">
      </td>
      <td valign=bottom align="center" width=80>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
    </tr>
    <tr>
      <td valign=top width=96>
        <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
      </td>
      <td valign=bottom align="center" width=54> <font size="2">AAA </font></td>
      <td valign=bottom align="center" width=6>&nbsp; </td>
      <td valign=bottom align="center" width=77> <font size="2">Aaa </font></td>
      <td valign=bottom align="center" width=6>&nbsp; </td>
      <td valign=bottom align="right" width=42> <font size="2">156 </font></td>
      <td valign=bottom align="right" width=19>&nbsp;&nbsp;</td>
      <td valign=bottom align="right" width=6>&nbsp; </td>
      <td valign=bottom align="right" width=80> <font size="2">$1,210,706 </font></td>
      <td valign=bottom align="right" width=19>&nbsp;&nbsp;&nbsp;</td>
      <td valign=bottom align="right" width=26>&nbsp; </td>
      <td valign=bottom align="right" width=68> <font size="2">86.56% </font></td>
      <td valign=bottom align="right" width=21>&nbsp;&nbsp;&nbsp;</td>
      <td valign=top width=80>
        <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
      </td>
    </tr>
    <tr>
      <td valign=top width=96>
        <p>&nbsp;</p>
      </td>
      <td valign=bottom align="center" width=54> <font size="2">A </font></td>
      <td valign=bottom align="center" width=6>&nbsp; </td>
      <td valign=bottom align="center" width=77> <font size="2">Aa </font></td>
      <td valign=bottom align="center" width=6>&nbsp; </td>
      <td valign=bottom align="right" width=42> <font size="2">10 </font></td>
      <td valign=bottom align="right" width=19>&nbsp;</td>
      <td valign=bottom align="right" width=6>&nbsp; </td>
      <td valign=bottom align="right" width=80> <font size="2">40,016 </font></td>
      <td valign=bottom align="right" width=19>&nbsp;</td>
      <td valign=bottom align="right" width=26>&nbsp; </td>
      <td valign=bottom align="right" width=68> <font size="2">2.86% </font></td>
      <td valign=bottom align="right" width=21>&nbsp;</td>
      <td valign=top width=80>
        <p>&nbsp;</p>
      </td>
    </tr>
    <tr>
      <td valign=top width=96>
        <p>&nbsp;</p>
      </td>
      <td valign=bottom align="center" width=54> <font size="2">A </font></td>
      <td valign=bottom align="center" width=6>&nbsp; </td>
      <td valign=bottom align="center" width=77> <font size="2">A </font></td>
      <td valign=bottom align="center" width=6>&nbsp; </td>
      <td valign=bottom align="right" width=42> <font size="2">10 </font></td>
      <td valign=bottom align="right" width=19>&nbsp;</td>
      <td valign=bottom align="right" width=6>&nbsp; </td>
      <td valign=bottom align="right" width=80> <font size="2">44,765 </font></td>
      <td valign=bottom align="right" width=19>&nbsp;</td>
      <td valign=bottom align="right" width=26>&nbsp; </td>
      <td valign=bottom align="right" width=68> <font size="2">3.20% </font></td>
      <td valign=bottom align="right" width=21>&nbsp;</td>
      <td valign=top width=80>
        <p>&nbsp;</p>
      </td>
    </tr>
    <tr>
      <td valign=top width=96>
        <p>&nbsp;</p>
      </td>
      <td valign=bottom align="center" width=54> <font size="2">BBB </font></td>
      <td valign=bottom align="center" width=6>&nbsp; </td>
      <td valign=bottom align="center" width=77> <font size="2">Baa </font></td>
      <td valign=bottom align="center" width=6>&nbsp; </td>
      <td valign=bottom align="right" width=42> <font size="2">14 </font></td>
      <td valign=bottom align="right" width=19>&nbsp;</td>
      <td valign=bottom align="right" width=6>&nbsp; </td>
      <td valign=bottom align="right" width=80> <font size="2">103,147 </font></td>
      <td valign=bottom align="right" width=19>&nbsp;</td>
      <td valign=bottom align="right" width=26>&nbsp; </td>
      <td valign=bottom align="right" width=68> <font size="2">7.38% </font></td>
      <td valign=bottom align="right" width=21>&nbsp;</td>
      <td valign=top width=80>
        <p>&nbsp;</p>
      </td>
    </tr>
    <tr>
      <td valign=top width=96>
        <p>&nbsp;</p>
      </td>
      <td valign=bottom align="center" width=54>&nbsp; </td>
      <td valign=bottom align="center" width=6>&nbsp; </td>
      <td valign=bottom align="center" width=77> <font size="2">Total </font></td>
      <td valign=bottom align="center" width=6>&nbsp; </td>
      <td valign=bottom align="right" width=42> <font size="2">190 </font></td>
      <td valign=bottom align="right" width=19>&nbsp;</td>
      <td valign=bottom align="right" width=6>&nbsp; </td>
      <td valign=bottom align="right" width=80> <font size="2">$1,398,634 </font></td>
      <td valign=bottom align="right" width=19>&nbsp;</td>
      <td valign=bottom align="right" width=26>&nbsp; </td>
      <td valign=bottom align="right" width=68> <font size="2">100% </font></td>
      <td valign=bottom align="right" width=21>&nbsp;</td>
      <td valign=top width=80>
        <p>&nbsp;</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% align=right valign=top><font size="1">* </font></td><td width=2%><font size="1"></font></td>
    <td width=94%><font size="1">&lt;R&gt;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 III&#151;&#147;Description
      of Bond Ratings.&#148; &lt;/R&gt;</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;&lt;R&gt;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. &lt;/R&gt;</font></td>
  </tr></table>

<P><table border=0 cellspacing=0 cellpadding=0 width="600">
    <tr>
      <td valign=top width=96>
        <p><br>
          &nbsp;</p>
      </td>
      <td valign=bottom align="center" width=54> <font size="1"><b>S&amp;P* </b> </font>
        <hr noshade size="1">
      </td>
      <td valign=bottom align="center" width=6> <font size="1"><b>&nbsp;&nbsp; </b> </font></td>
      <td valign=bottom align="center" width=77> <font size="1"><b>Moody&#146;s* </b> </font>
        <hr noshade size="1">
      </td>
      <td valign=bottom align="center" width=6> <font size="1"><b>&nbsp;&nbsp; </b> </font></td>
      <td valign=bottom align="center" colspan="2"> <font size="1"><b>Number of<br>
         Issues </b> </font>
        <hr noshade size="1">
      </td>
      <td valign=bottom align="center" width=6> <font size="1"><b>&nbsp;&nbsp; </b> </font></td>
      <td valign=bottom align="center" colspan="2"> <font size="1"><b>Value<br>
         (in thousands) </b> </font>
        <hr noshade size="1">
      </td>
      <td valign=bottom align="center" width=26> <font size="1"><b>&nbsp;&nbsp; </b> </font></td>
      <td valign=bottom align="center" colspan="2"> <font size="1"><b>Percent </b> </font>
        <hr noshade size="1">
      </td>
      <td valign=bottom align="center" width=80>&nbsp;</td>
    </tr>
    <tr>
      <td valign=top width=96>
        <p>&nbsp;</p>
      </td>
      <td valign=bottom align="center" width=54> <font size="2">AAA </font></td>
      <td valign=bottom align="center" width=6>&nbsp; </td>
      <td valign=bottom align="center" width=77> <font size="2">Aaa </font></td>
      <td valign=bottom align="center" width=6>&nbsp; </td>
      <td valign=bottom align="right" width=42> <font size="2">48 </font></td>
      <td valign=bottom align="right" width=19>&nbsp;</td>
      <td valign=bottom align="right" width=6>&nbsp; </td>
      <td valign=bottom align="right" width=80> <font size="2">$67,952 </font></td>
      <td valign=bottom align="right" width=19>&nbsp;</td>
      <td valign=bottom align="right" width=26>&nbsp; </td>
      <td valign=bottom align="right" width=68> <font size="2">88.01% </font></td>
      <td valign=bottom align="right" width=21>&nbsp;</td>
      <td valign=top width=80>
        <p>&nbsp;</p>
      </td>
    </tr>
    <tr>
      <td valign=top width=96>
        <p>&nbsp;</p>
      </td>
      <td valign=bottom align="center" width=54> <font size="2">AA </font></td>
      <td valign=bottom align="center" width=6>&nbsp; </td>
      <td valign=bottom align="center" width=77> <font size="2">Aa </font></td>
      <td valign=bottom align="center" width=6>&nbsp; </td>
      <td valign=bottom align="right" width=42> <font size="2">2 </font></td>
      <td valign=bottom align="right" width=19>&nbsp;</td>
      <td valign=bottom align="right" width=6>&nbsp; </td>
      <td valign=bottom align="right" width=80> <font size="2">1,618 </font></td>
      <td valign=bottom align="right" width=19>&nbsp;</td>
      <td valign=bottom align="right" width=26>&nbsp; </td>
      <td valign=bottom align="right" width=68> <font size="2">2.09% </font></td>
      <td valign=bottom align="right" width=21>&nbsp;</td>
      <td valign=top width=80>
        <p>&nbsp;</p>
      </td>
    </tr>
    <tr>
      <td valign=top width=96>
        <p>&nbsp;</p>
      </td>
      <td valign=bottom align="center" width=54> <font size="2">BBB </font></td>
      <td valign=bottom align="center" width=6>&nbsp; </td>
      <td valign=bottom align="center" width=77> <font size="2">Baa </font></td>
      <td valign=bottom align="center" width=6>&nbsp; </td>
      <td valign=bottom align="right" width=42> <font size="2">6 </font></td>
      <td valign=bottom align="right" width=19>&nbsp;</td>
      <td valign=bottom align="right" width=6>&nbsp; </td>
      <td valign=bottom align="right" width=80> <font size="2">7,643 </font></td>
      <td valign=bottom align="right" width=19>&nbsp;</td>
      <td valign=bottom align="right" width=26>&nbsp; </td>
      <td valign=bottom align="right" width=68> <font size="2">9.90% </font></td>
      <td valign=bottom align="right" width=21>&nbsp;</td>
      <td valign=top width=80>
        <p>&nbsp;</p>
      </td>
    </tr>
    <tr>
      <td valign=top width=96>
        <p>&nbsp;</p>
      </td>
      <td valign=bottom align="center" width=54>&nbsp; </td>
      <td valign=bottom align="center" width=6>&nbsp; </td>
      <td valign=bottom align="center" width=77> <font size="2">Total </font></td>
      <td valign=bottom align="center" width=6>&nbsp; </td>
      <td valign=bottom align="right" width=42> <font size="2">56 </font></td>
      <td valign=bottom align="right" width=19>&nbsp;</td>
      <td valign=bottom align="right" width=6>&nbsp; </td>
      <td valign=bottom align="right" width=80> <font size="2">$77,213 </font></td>
      <td valign=bottom align="right" width=19>&nbsp;</td>
      <td valign=bottom align="right" width=26>&nbsp; </td>
      <td valign=bottom align="right" width=68> <font size="2">100% </font></td>
      <td valign=bottom align="right" width=21>&nbsp;</td>
      <td valign=top width=80>
        <p>&nbsp;</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% align=right valign=top><font size="1">* </font></td><td width=2%><font size="1"></font></td>
    <td width=94%><font size="1">&lt;R&gt;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 III&#151;&#147;Description
      of Bond Ratings.&#148; &lt;/R&gt;</font></td>
  </tr></table>

<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>

<P>
<table border=0 cellspacing=0 cellpadding=0 width="600">
  <tr valign="bottom">
    <td>
      <p><font size="2">&lt;R&gt;</font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="center" colspan="9">
      <p><font size="1"><b> </b> </font>
    </td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="center" rowspan="2">
      <p><font size="1"><b>Yield-30 days<br>
        ended<br>
        October 31, 2003, </b> </font>
      <hr noshade size="1">
    </td>
    <td align="center">&nbsp;</td>
    <td align="center" rowspan="2">
      <p><font size="1"><b>Tax Equivalent Yield<br>
        30 days ended<br>
        October 31, 2003&#134; </b> </font>
      <hr noshade size="1">
    </td>
    <td align="center">&nbsp;</td>
    <td align="center" colspan="5"><font size="1"><b>Average Annual Total Return
      </b></font>
      <hr noshade size="1">
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p>&nbsp;</p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="center">
      <p>&nbsp;</p>
    </td>
    <td align="center">
      <p>&nbsp;</p>
    </td>
    <td align="center">
      <p><font size="1"><b>One Year ended<br>
        October 31, 2003 </b> </font>
      <hr noshade size="1">
    </td>
    <td align="center">
      <p>&nbsp;</p>
    </td>
    <td align="center">
      <p><font size="1"><b><br>
        Five Years ended <br>
        October 31, 2003 </b></font>
      <hr noshade size="1">
    </td>
    <td align="center">
      <p>&nbsp;</p>
    </td>
    <td align="center">
      <p><font size="1"><b>Ten Years ended<br>
        October 31, 2003 </b> </font>
      <hr noshade size="1">
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">MuniYield Insured </font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="center">
      <p><font size="2">6.06% </font></p>
    </td>
    <td align="center">
      <p>&nbsp;</p>
    </td>
    <td align="center">
      <p><font size="2">8.36% </font></p>
    </td>
    <td align="center">
      <p>&nbsp;</p>
    </td>
    <td align="center">
      <p><font size="2">8.19% </font></p>
    </td>
    <td align="center">
      <p>&nbsp;</p>
    </td>
    <td align="center">
      <p><font size="2">5.11% </font></p>
    </td>
    <td align="center">
      <p>&nbsp;</p>
    </td>
    <td align="center">
      <p><font size="2">6.48% </font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td>
      <p><font size="2">MuniInsured </font></p>
    </td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="center">
      <p><font size="2">4.65% </font></p>
    </td>
    <td align="center">
      <p>&nbsp;</p>
    </td>
    <td align="center">
      <p><font size="2">6.41% </font></p>
    </td>
    <td align="center">
      <p>&nbsp;</p>
    </td>
    <td align="center">
      <p><font size="2">8.32% </font></p>
    </td>
    <td align="center">
      <p>&nbsp;</p>
    </td>
    <td align="center">
      <p><font size="2">4.81% </font></p>
    </td>
    <td align="center">
      <p>&nbsp;</p>
    </td>
    <td align="center">
      <p><font size="2">5.01% </font></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td><font size="2">&lt;/R&gt;</font></td>
    <td>&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&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><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"> 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. </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: 36; page: 36" -->



<p><table width=600><tr><td><font size=2><B>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><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;&lt;R&gt;<b></b>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
      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 services
      placed by such broker-dealer at such auction. &lt;/R&gt;<b></b></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>

<P><table border=0 cellspacing=0 cellpadding=0 width="600">
    <tr valign="bottom">
      <td width=341>
        <p>&nbsp;</p>
      </td>
      <td width=21>
        <p>&nbsp;</p>
      </td>
      <td align="center" colspan="3">
        <p><font size="1"><b>Year Ended<br>
          October 31, </b> </font>
        <hr noshade size="1">
      </td>
    </tr>
    <tr valign="bottom">
      <td width=341>
        <p>&nbsp;</p>
      </td>
      <td width=21>
        <p><font size="2">&nbsp;&nbsp; </font></p>
      </td>
      <td align="center" width=105>
        <p><font size="1"><b>2003 </b> </font>
        <hr noshade size="1">
      </td>
      <td align="center" width=12>
        <p><font size="1"><b>&nbsp;&nbsp; </b> </font></p>
      </td>
      <td align="center" width=121>
        <p><font size="1"><b>2002 </b> </font>
        <hr noshade size="1">
      </td>
    </tr>
    <tr valign="bottom">
      <td width=341>
        <p><font size="2">MuniYield Insured </font></p>
      </td>
      <td width=21>
        <p>&nbsp;</p>
      </td>
      <td align="center" width=105>
        <p><font size="2">114.05% </font></p>
      </td>
      <td align="center" width=12>
        <p>&nbsp;</p>
      </td>
      <td align="center" width=121>
        <p><font size="2">97.34% </font></p>
      </td>
    </tr>
    <tr valign="bottom">
      <td width=341>
        <p>&nbsp;</p>
      </td>
      <td width=21>
        <p>&nbsp;</p>
      </td>
      <td align="center" width=105>
        <p>&nbsp;</p>
      </td>
      <td align="center" width=12>
        <p>&nbsp;</p>
      </td>
      <td align="center" width=121>
        <p>&nbsp;</p>
      </td>
    </tr>
    <tr valign="bottom">
      <td width=341>
        <p>&nbsp;</p>
      </td>
      <td width=21>
        <p>&nbsp;</p>
      </td>
      <td align="center" colspan="3">
        <p><font size="1"><b>Year Ended<br>
          September 30, </b> </font>
        <hr noshade size="1">
      </td>
    </tr>
    <tr valign="bottom">
      <td width=341>
        <p>&nbsp;</p>
      </td>
      <td width=21>
        <p><font size="2">&nbsp;&nbsp; </font></p>
      </td>
      <td align="center" width=105>
        <p><font size="1"><b>2003 </b> </font>
        <hr noshade size="1">
      </td>
      <td align="center" width=12>
        <p><font size="1"><b>&nbsp;&nbsp; </b> </font></p>
      </td>
      <td align="center" width=121>
        <p><font size="1"><b>2002 </b> </font>
        <hr noshade size="1">
      </td>
    </tr>
    <tr valign="bottom">
      <td width=341>
        <p><font size="2">MuniInsured </font></p>
      </td>
      <td width=21>
        <p>&nbsp;</p>
      </td>
      <td align="center" width=105>
        <p><font size="2">92.60% </font></p>
      </td>
      <td align="center" width=12>
        <p>&nbsp;</p>
      </td>
      <td align="center" width=121>
        <p><font size="2">50.88% </font></p>
      </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: 38; page: 38" -->



<p><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 &#151; for MuniYield
Insured &#151; 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. </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, 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><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;&lt;R&gt;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 April 1, 2004, the net asset value
      per share of MuniYield Insured Common Stock was $15.73 and the market price
      per share was $15.29. The shares of MuniInsured Common Stock commenced trading
      on the AMEX in October 1987. As of April 1, 2004, the net asset value per
      share of MuniInsured Common Stock was $9.92 and the market price per share
      was $9.75&lt;/R&gt; </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>

<p><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 such distribution would occur 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>&nbsp;
<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;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>

<P>
<table border=0 cellspacing=0 cellpadding=0 width="600">
  <tr>
    <td valign=top><font size=2>&lt;R&gt;<b></b></font></td>
    <td valign=bottom align="center">&nbsp;</td>
    <td valign=bottom align="center">&nbsp;</td>
    <td valign=bottom align="center">&nbsp;</td>
    <td valign=bottom align="center">&nbsp;</td>
    <td valign=bottom align="center">&nbsp;</td>
    <td valign=bottom align="center">&nbsp;</td>
    <td valign=bottom align="center">&nbsp;</td>
    <td valign=top>&nbsp;</td>
  </tr>
  <tr>
    <td valign=top>
      <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
    </td>
    <td valign=bottom align="center"> <b><font size="1">Auction Date </font> </b>
      <hr noshade size="1">
    </td>
    <td valign=bottom align="center"> <b><font size="1">&nbsp;&nbsp;&nbsp; </font>
      </b></td>
    <td valign=bottom align="center"> <b><font size="1">Series </font> </b>
      <hr noshade size="1">
    </td>
    <td valign=bottom align="center"> <b><font size="1">&nbsp;&nbsp;&nbsp; </font>
      </b></td>
    <td valign=bottom align="center"> <b><font size="1">Auction Schedule </font>
      </b>
      <hr noshade size="1">
    </td>
    <td valign=bottom align="center"> <b><font size="1">&nbsp;&nbsp;&nbsp;&nbsp;
      </font> </b></td>
    <td valign=bottom align="center"> <b><font size="1">Dividend Rate </font>
      </b>
      <hr noshade size="1">
    </td>
    <td valign=top>
      <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td valign=top>
      <p>&nbsp;</p>
    </td>
    <td valign=bottom align="center"> <font size="2">March 10, 2004 </font></td>
    <td valign=bottom align="center">&nbsp; </td>
    <td valign=bottom align="center"> <font size="2">A </font></td>
    <td valign=bottom align="center">&nbsp; </td>
    <td valign=bottom align="center"> <font size="2">28 day </font></td>
    <td valign=bottom align="center">&nbsp; </td>
    <td valign=bottom align="center"> <font size="2">0.90% </font></td>
    <td valign=top>
      <p>&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td valign=top>
      <p>&nbsp;</p>
    </td>
    <td valign=bottom align="center"> <font size="2">March 10, 2004 </font></td>
    <td valign=bottom align="center">&nbsp; </td>
    <td valign=bottom align="center"> <font size="2">B </font></td>
    <td valign=bottom align="center">&nbsp; </td>
    <td valign=bottom align="center"> <font size="2">28 day </font></td>
    <td valign=bottom align="center">&nbsp; </td>
    <td valign=bottom align="center"> <font size="2">0.91% </font></td>
    <td valign=top>
      <p>&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td valign=top>
      <p>&nbsp;</p>
    </td>
    <td valign=bottom align="center"> <font size="2">March 10, 2004 </font></td>
    <td valign=bottom align="center">&nbsp; </td>
    <td valign=bottom align="center"> <font size="2">C </font></td>
    <td valign=bottom align="center">&nbsp; </td>
    <td valign=bottom align="center"> <font size="2">28 day </font></td>
    <td valign=bottom align="center">&nbsp; </td>
    <td valign=bottom align="center"> <font size="2">0.78% </font></td>
    <td valign=top>
      <p>&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td valign=top>
      <p>&nbsp;</p>
    </td>
    <td valign=bottom align="center"> <font size="2">March 3, 2004 </font></td>
    <td valign=bottom align="center">&nbsp; </td>
    <td valign=bottom align="center"> <font size="2">D </font></td>
    <td valign=bottom align="center">&nbsp; </td>
    <td valign=bottom align="center"> <font size="2">28 day </font></td>
    <td valign=bottom align="center">&nbsp; </td>
    <td valign=bottom align="center"> <font size="2">0.82% </font></td>
    <td valign=top>
      <p>&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td valign=top>
      <p>&nbsp;</p>
    </td>
    <td valign=bottom align="center"> <font size="2">March 24, 2004 </font></td>
    <td valign=bottom align="center">&nbsp; </td>
    <td valign=bottom align="center"> <font size="2">E </font></td>
    <td valign=bottom align="center">&nbsp; </td>
    <td valign=bottom align="center"> <font size="2">7 day </font></td>
    <td valign=bottom align="center">&nbsp; </td>
    <td valign=bottom align="center"> <font size="2">0.95% </font></td>
    <td valign=top>
      <p>&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td valign=top>
      <p>&nbsp;</p>
    </td>
    <td valign=bottom align="center"> <font size="2">March 22, 2004 </font></td>
    <td valign=bottom align="center">&nbsp; </td>
    <td valign=bottom align="center"> <font size="2">F </font></td>
    <td valign=bottom align="center">&nbsp; </td>
    <td valign=bottom align="center"> <font size="2">28 day </font></td>
    <td valign=bottom align="center">&nbsp; </td>
    <td valign=bottom align="center"> <font size="2">0.80% </font></td>
    <td valign=top>
      <p>&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td valign=top>
      <p>&nbsp;</p>
    </td>
    <td valign=bottom align="center"> <font size="2">March 22, 2004 </font></td>
    <td valign=bottom align="center">&nbsp; </td>
    <td valign=bottom align="center"> <font size="2">G </font></td>
    <td valign=bottom align="center">&nbsp; </td>
    <td valign=bottom align="center"> <font size="2">7 day </font></td>
    <td valign=bottom align="center">&nbsp; </td>
    <td valign=bottom align="center"> <font size="2">0.85% </font></td>
    <td valign=top>
      <p>&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td valign=top><font size=2>&lt;/R&gt;<b></b></font></td>
    <td valign=bottom align="center">&nbsp;</td>
    <td valign=bottom align="center">&nbsp;</td>
    <td valign=bottom align="center">&nbsp;</td>
    <td valign=bottom align="center">&nbsp;</td>
    <td valign=bottom align="center">&nbsp;</td>
    <td valign=bottom align="center">&nbsp;</td>
    <td valign=bottom align="center">&nbsp;</td>
    <td valign=top>&nbsp;</td>
  </tr>
</table>

<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;&lt;R&gt;<b></b>The redemption
      provisions pertaining to all series of MuniYield Insured AMPS 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<font size="1"><sup>2</sup></font>/<font size="1">3</font>%
      with respect to MuniYield Insured and 75% with respect to MuniInsured 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.&lt;/R&gt; </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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<!-- MARKER PAGE="sheet: 39; page: 39" -->



<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</font><font size="1"><sup>2</sup></font>/<font size="1">3</font><font size=2>%
      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;&lt;R&gt;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. For MuniYield
      Insured, such an amendment would require the affirmative vote of the holders
      of at least 66</font><font size="1"><sup>2</sup></font>/<font size="1">3</font><font size=2>%
      of the Fund&#146;s outstanding shares of capital stock (including the AMPS
      and any other preferred stock) entitled to be voted on the matter, voting
      together as a single class (or a majority of such shares if the amendment
      was previously approved, adopted or authorized by at least two-thirds of
      the total number of Directors fixed in accordance with the by-laws), and,
      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. For MuniInsured,
      such an amendment would require the affirmative vote of the holders of at
      least 75% of the Fund&#146;s outstanding shares of capital stock entitled
      to vote on the matter. 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.
      &lt;/R&gt; </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</font><font size="1"><sup>2</sup></font>/<font size="1">3</font><font size=2>%
      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 of MuniInsured and MuniYield Insured currently consist
      of the same eight individuals, seven of whom are not &#147;interested persons&#148;
      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&#148; 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>&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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<!-- MARKER PAGE="sheet: 40; page: 40" -->



<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&lt;R&gt;<b></b>FAM was organized
      as an investment adviser in 1977. FAM and its affiliates, including MLIM,
      act as the investment adviser to more than 50 registered investment companies
      and offer services to individuals and institutional accounts. As of February
      2004, FAM and its affiliates had a total of approximately $521 billion in
      investment company and other portfolio assets under management. The principal
      business address of FAM is 800 Scudders Mill Road, Plainsboro, New Jersey
      08536. &lt;/R&gt;<b></b></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 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
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;&lt;R&gt;<b></b>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 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 with respect to 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). MuniInsured
      was reimbursed $7 in 2002 in connection with certain investment advisory
      fees paid with respect to its investments in affiliated money market funds.
      </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 &lt;/R&gt;<b></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">
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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<!-- MARKER PAGE="sheet: 41; page: 41" -->



<p><table width=600><tr><td><font size=2>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 for 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>

<P><table border=0 cellspacing=0 cellpadding=0 width="600">
    <tr valign="bottom">
      <td width=294> <font size="1"><b>Fiscal Year Ended October 31, </b> </font>
        <hr noshade size="1" align="left" width="45%">
      </td>
      <td width=2>&nbsp; </td>
      <td align="center" colspan="2"> <font size="1"><b>Paid to State Street </b> </font>
        <hr noshade size="1">
      </td>
      <td align="center" width=36>&nbsp;&nbsp;&nbsp;&nbsp;</td>
      <td align="center" width=122> <font size="1"><b>Paid to FAM </b> </font>
        <hr noshade size="1">
      </td>
      <td width=30>&nbsp;&nbsp;&nbsp; </td>
    </tr>
    <tr valign="bottom">
      <td width=294> <font size="2">2003 </font></td>
      <td width=2>&nbsp;&nbsp; </td>
      <td align="right" width=85> <font size="2">$314,092 </font></td>
      <td width=31>&nbsp; </td>
      <td valign="bottom" width=36>&nbsp;</td>
      <td valign="bottom" width=122 align="center"> <font size="2">$32,712 </font></td>
      <td width=30>&nbsp;</td>
    </tr>
    <tr valign="bottom">
      <td width=294> <font size="2">2002 </font></td>
      <td width=2>&nbsp; </td>
      <td align="right" width=85> <font size="2">$321,681 </font></td>
      <td width=31>&nbsp; </td>
      <td valign="bottom" width=36>&nbsp;</td>
      <td valign="bottom" width=122 align="center"> <font size="2">$37,893 </font></td>
      <td width=30>&nbsp;</td>
    </tr>
    <tr valign="bottom">
      <td width=294> <font size="2">2001 </font></td>
      <td width=2>&nbsp; </td>
      <td align="right" width=85> <font size="2">$313,440 </font></td>
      <td align="left" width=31> <font size="2">* </font></td>
      <td valign="bottom" width=36>&nbsp;</td>
      <td valign="bottom" width=122 align="center"> <font size="2">$70,199 </font></td>
      <td width=30>&nbsp;</td>
    </tr>
    <tr valign="bottom">
      <td width=294>&nbsp; </td>
      <td width=2>&nbsp; </td>
      <td width=85>&nbsp; </td>
      <td width=31>&nbsp; </td>
      <td width=36>&nbsp;</td>
      <td width=122 align="center">&nbsp; </td>
      <td width=30>&nbsp; </td>
    </tr>
    <tr valign="bottom">
      <td width=294>&nbsp; </td>
      <td width=2>&nbsp; </td>
      <td width=85>&nbsp; </td>
      <td width=31>&nbsp; </td>
      <td width=36>&nbsp;</td>
      <td width=122 align="center">&nbsp; </td>
      <td width=30>&nbsp; </td>
    </tr>
    <tr valign="bottom">
      <td width=294>&nbsp; </td>
      <td width=2>&nbsp; </td>
      <td width=85>&nbsp; </td>
      <td width=31>&nbsp; </td>
      <td width=36>&nbsp;</td>
      <td width=122 align="center">&nbsp; </td>
      <td width=30>&nbsp; </td>
    </tr>
    <tr valign="bottom">
      <td width=294>&nbsp; </td>
      <td width=2>&nbsp; </td>
      <td width=85>&nbsp; </td>
      <td width=31>&nbsp; </td>
      <td width=36>&nbsp;</td>
      <td width=122 align="center">&nbsp; </td>
      <td width=30>&nbsp; </td>
    </tr>
    <tr valign="bottom">
      <td width=294> <font size="1"><b>Fiscal Year Ended September 30, </b> </font>
        <hr noshade size="1" align="left" width="48%">
      </td>
      <td width=2>&nbsp; </td>
      <td align="center" colspan="2"> <font size="1"><b>Paid to State Street </b> </font>
        <hr noshade size="1">
      </td>
      <td align="center" width=36>&nbsp;</td>
      <td align="center" width=122> <font size="1"><b>Paid to FAM </b> </font>
        <hr noshade size="1">
      </td>
      <td width=30>&nbsp; </td>
    </tr>
    <tr valign="bottom">
      <td width=294> <font size="2">2003 </font></td>
      <td width=2>&nbsp; </td>
      <td align="right" width=85> <font size="2">$40,493 </font></td>
      <td width=31>&nbsp; </td>
      <td valign="bottom" width=36>&nbsp;</td>
      <td valign="bottom" width=122 align="center"> <font size="2">$&nbsp;&nbsp;1,730 </font></td>
      <td width=30>&nbsp;</td>
    </tr>
    <tr valign="bottom">
      <td width=294> <font size="2">2002 </font></td>
      <td width=2>&nbsp; </td>
      <td align="right" width=85> <font size="2">$40,223 </font></td>
      <td width=31>&nbsp; </td>
      <td valign="bottom" width=36>&nbsp;</td>
      <td valign="bottom" width=122 align="center"> <font size="2">$&nbsp;&nbsp;4,405 </font></td>
      <td width=30>&nbsp;</td>
    </tr>
    <tr valign="bottom">
      <td width=294> <font size="2">2001 </font></td>
      <td width=2>&nbsp; </td>
      <td align="right" width=85> <font size="2">$37,497 </font></td>
      <td align="left" width=31> <font size="2">* </font></td>
      <td valign="bottom" width=36>&nbsp;</td>
      <td valign="bottom" width=122 align="center"> <font size="2">$26,115 </font></td>
      <td width=30>&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">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 </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>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><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;&lt;R&gt;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 MuniYield Insured&#146;s common stock and AMPS and to
      holders of MuniInsured&#146;s common stock. While any shares of MuniYield
      Insured&#146;s AMPS are outstanding, MuniYield Insured 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; &lt;/R&gt;</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 </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>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, 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 </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">
42</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>asset value per share of a 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
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 of 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>&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><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;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 both MuniInsured and 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><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;&lt;R&gt;A holder of common
      stock of MuniYield Insured, who purchased his or her shares through Merrill
      Lynch in that 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.&lt;/R&gt; </font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2><B>Liquidation Rights of Holders of MuniYield
Insured 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 stockholders
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 </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">
44</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>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><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 <FONT SIZE="1">LLP</FONT>, 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 </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><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>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 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 <FONT SIZE="1">LLP</FONT>, 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 <FONT SIZE="1">LLP</FONT> 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 <FONT SIZE="1">LLP</FONT>, 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 (<I>e.g.</I>, 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>&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><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;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 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 a RIC. In that 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>i.e.</I>, 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 and the
Treasury regulations promulgated thereunder. The Code and the Treasury
regulations 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;&lt;R&gt;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 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 under Maryland law. 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 on
      a net asset value basis 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 participating Funds. &lt;/R&gt;</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 and  Prospectus, were the similarity of
investment objectives and policies of the  Funds, their use of substantially the same
management personnel, the relative  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 </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>&lt;R&gt;that the Reorganization is structured as a tax-free
      reorganization (except to the extent that MuniInsured common stockholders
      receive cash representing an interest in their fractional shares of MuniYield
      Insured common stock received in the 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 Funds&#146; portfolios.
      The Boards also considered the relative tax positions of each Fund&#146;s
      portfolio. &lt;/R&gt;</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><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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;&lt;R&gt;<b></b>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;Net Asset Value.&#148; &lt;/R&gt;<b></b></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><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 </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>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;&lt;R&gt;<i>Expenses.</i> The
      expenses of the Reorganization that are directly attributable to MuniInsured
      will be paid by MuniInsured. These expenses 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. 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 (on behalf of MuniYield Insured). The expenses
      of the Reorganization attributable to MuniInsured are currently estimated
      to be $146,000. The expenses of the Reorganization attributable to MuniYield
      Insured (to be paid by FAM) 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 Charter of MuniInsured, relevant Maryland law and the rules of
      the AMEX, 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 (plus cash in lieu of fractional
      shares) 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. &lt;/R&gt;</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&#146;s obligations set forth in the Agreement
      and Plan has not been fulfilled or waived by such Board. </font></td>
  </tr></table>

<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;&lt;R&gt;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 common 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 expenses of the common stock of the Combined
      Fund, including the additional expenses that result from the Combined Fund&#146;s
      AMPS, are expected to be higher than current total &lt;/R&gt;</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>&lt;R&gt;operating expenses of the common stock of MuniInsured,
      which does not issue AMPS and does not incur the additional costs and expenses
      associated with AMPS, the Directors of MuniInsured determined that the potential
      benefits to common stockholders of the Combined Fund from the ability to
      issue AMPS to seek to enhance yield outweighed the potentially higher overall
      operating expense ratio. &lt;/R&gt;</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 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 (<I>e.g.</I>, 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>

<P><table border=0 cellspacing=0 cellpadding=0 width="600">
    <tr valign="bottom">
      <td width=180>
        <p>&nbsp;</p>
      </td>
      <td width=6>
        <p><font size="2">&nbsp;&nbsp; </font></p>
      </td>
      <td align="center" width=104> <b><font size="1">Approximate<br>
        Average<br>
        Net Assets<br>
         (excluding assets<br>
        attributable to AMPS) <br>
         as of October 31, 2003 </font> </b>
        <hr noshade size="1">
      </td>
      <td align="center" width=12> <b>&nbsp;&nbsp;&nbsp; </b></td>
      <td align="center" colspan="2"> <b><font size="1">Total Annualized<br>
         Operating Expense<br>
         Ratio (excluding<br>
         assets attributable<br>
         to AMPS) </font> </b> <b><font size="1">&nbsp;&nbsp; </font> </b>
        <hr noshade size="1">
      </td>
      <td align="center" width=14>&nbsp;&nbsp;&nbsp;</td>
      <td align="center" width=97> <b><font size="1">Approximate Average<br>
         Net Assets (including<br>
         assets attributable<br>
         to AMPS) as of<br>
         October 31, 2003 </font> </b>
        <hr noshade size="1">
      </td>
      <td align="center" width=10> &nbsp;&nbsp;</td>
      <td align="center" colspan="2"> <b><font size="1">Total Annualized<br>
         Operating Expense<br>
         Ratio (including<br>
         assets attributable<br>
         to AMPS) </font> </b>
        <hr noshade size="1">
      </td>
    </tr>
    <tr valign="bottom">
      <td width=180>
        <p><font size="2">MuniInsured </font></p>
      </td>
      <td width=6>
        <p>&nbsp;</p>
      </td>
      <td align="center" width=104>
        <p><font size="2">$&nbsp;&nbsp;79.6 million </font></p>
      </td>
      <td width=12>
        <p>&nbsp;</p>
      </td>
      <td align="right" width=76>
        <p><font size="2">0.79% </font></p>
      </td>
      <td width=10>
        <p>&nbsp;</p>
      </td>
      <td width=14>&nbsp;</td>
      <td align="center" width=97>
        <p><font size="2">$79.6 million </font></p>
      </td>
      <td width=10>
        <p>&nbsp;</p>
      </td>
      <td align="right" width=58>
        <p><font size="2">0.79% </font></p>
      </td>
      <td width=33>
        <p>&nbsp;</p>
      </td>
    </tr>
    <tr valign="bottom">
      <td width=180>
        <p><font size="2">MuniYield Insured </font></p>
      </td>
      <td width=6>
        <p>&nbsp;</p>
      </td>
      <td align="center" width=104>
        <p><font size="2">$952.3 million </font></p>
      </td>
      <td width=12>
        <p>&nbsp;</p>
      </td>
      <td align="right" width=76>
        <p><font size="2">0.95% </font></p>
      </td>
      <td align="left" width=10>
        <p><font size="2">* </font></p>
      </td>
      <td width=14>&nbsp;</td>
      <td align="center" width=97>
        <p><font size="2">$&nbsp;&nbsp;&nbsp;1.4 billion </font></p>
      </td>
      <td width=10>
        <p>&nbsp;</p>
      </td>
      <td align="right" width=58>
        <p><font size="2">0.65% </font></p>
      </td>
      <td align="left" width=33>
        <p><font size="2">** </font></p>
      </td>
    </tr>
    <tr valign="bottom">
      <td width=180>
        <p align=left><font size="2">Pro Forma MuniYield<br>
          &nbsp;&nbsp;&nbsp;Insured Combined Fund </font></p>
      </td>
      <td width=6>
        <p align=left>&nbsp;</p>
      </td>
      <td align="center" width=104>
        <p><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;1.0 billion </font></p>
      </td>
      <td width=12>
        <p align=left>&nbsp;</p>
      </td>
      <td align="right" width=76>
        <p align=right><font size="2">0.92% </font></p>
      </td>
      <td align="left" width=10>
        <p align=left><font size="2">* </font></p>
      </td>
      <td width=14>&nbsp;</td>
      <td align="center" width=97>
        <p><font size="2">$&nbsp;&nbsp;&nbsp;1.5 billion </font></p>
      </td>
      <td width=10>
        <p align=left>&nbsp;</p>
      </td>
      <td align="right" width=58>
        <p align=right><font size="2">0.64% </font></p>
      </td>
      <td align="left" width=33>
        <p align=left><font size="2">** </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% 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><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 </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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<p><table width=600><tr>
    <td><font size=2>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>

<P><table border=0 cellspacing=0 cellpadding=0 width="600">
    <tr>
      <td valign=top> <b><font size="1">If prior to the Reorganization you held: </font> </b>
        <hr noshade size="1" width="80%" align="left">
      </td>
      <td valign=top>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      </td>
      <td valign=top> <b><font size="1">After the Reorganization, you will hold: </font> </b>
        <hr noshade size="1" width="80%" align="left">
      </td>
    </tr>
    <tr>
      <td valign=top> <font size="2">MuniInsured Common Stock </font></td>
      <td valign=top>&nbsp; </td>
      <td valign=top> <font size="2">MuniYield Insured Common Stock </font></td>
    </tr>
    <tr>
      <td valign=top> <font size="2">MuniYield Insured Common Stock </font></td>
      <td valign=top>&nbsp; </td>
      <td valign=top> <font size="2">MuniYield Insured Common Stock </font></td>
    </tr>
  </table>


<p><table width=600><tr><td><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></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;<i>Summary.</i> 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
      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 <FONT SIZE="1">LLP</FONT>,
      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</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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<p><table width=600><tr><td><font size=2>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><table width=600><tr><td><font size=2><B>Capitalization</B></font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&lt;R&gt;The following table
      sets forth as of April 1, 2004 (i) the capitalization of MuniYield Insured,
      (ii) the capitalization of MuniInsured and (iii) the capitalization of the
      Pro Forma MuniYield Insured 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 Pro Forma MuniYield Insured Combined  Fund as of  April 1,
2004 (unaudited)</B></font></td></tr></table>

<P>
<table border=0 cellspacing=0 cellpadding=0 width="600">
  <tr valign="bottom">
    <td>
      <p>&nbsp;</p>
    </td>
    <td>
      <p>&nbsp;&nbsp;</p>
    </td>
    <td align="center"> <b><font size="1">MuniYield Insured </font> </b>
      <hr noshade size="1">
    </td>
    <td align="center"> <b>&nbsp;&nbsp;&nbsp; </b></td>
    <td align="center"> <b><font size="1">MuniInsured </font> </b>
      <hr noshade size="1">
    </td>
    <td align="center"> <b>&nbsp;&nbsp;&nbsp; </b></td>
    <td align="center"> <b><font size="1">Pro Forma<br>
      MuniYield<br>
      Insured<br>
      Combined Fund </font> </b>
      <hr noshade size="1">
    </td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
    <td>&nbsp; </td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">Net Assets: </font></td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right"> <font size="2">$1,416,562,869 </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="2">$80,199,044 </font></td>
    <td>&nbsp; </td>
    <td align="right"> <font size="2">$1,496,761,913 </font></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">Net Assets Attributable to Common Stock: </font></td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right"> <font size="2">$976,562,869 </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="2">$80,199,044 </font></td>
    <td>&nbsp; </td>
    <td align="right"> <font size="2">$1,056,761,913 </font></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">Shares of Common Stock Outstanding: </font></td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right"> <font size="2">62,099,095 </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="2">8,083,214 </font></td>
    <td>&nbsp; </td>
    <td align="right"> <font size="2">67,196,709 </font></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">Net Asset Value Per Share: </font></td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right"> <font size="2">$15.73 </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="2">$9.92 </font></td>
    <td>&nbsp; </td>
    <td align="right"> <font size="2">$15.73 </font></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">Net Assets Attributable to AMPS: </font></td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right"> <font size="2">$440,000,000 </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="2">N/A </font></td>
    <td>&nbsp; </td>
    <td align="right"> <font size="2">$440,000,000 </font></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">Shares of AMPS Outstanding: </font></td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right"> <font size="2">17,600 </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="2">N/A </font></td>
    <td>&nbsp; </td>
    <td align="right"> <font size="2">17,600 </font></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">AMPS Liquidation Preference Per Share: </font></td>
    <td>
      <p>&nbsp;</p>
    </td>
    <td align="right"> <font size="2">$25,000 </font></td>
    <td align="right">&nbsp; </td>
    <td align="right"> <font size="2">N/A </font></td>
    <td>&nbsp; </td>
    <td align="right"> <font size="2">$25,000 </font></td>
  </tr>
  <tr valign="bottom">
    <td><font size="2">&lt;/R&gt;</font></td>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</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;





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<!-- MARKER PAGE="sheet: 55; page: 55" -->



<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 19, 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, 8,083,214 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;&lt;R&gt;To the knowledge of
      the management of each Fund, 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 or AMPS of MuniYield Insured, except that Cede &amp; Co., as
      nominee of The Depository Trust Company, 55 Water Street, New York, New
      York 10041, is the record holder of all outstanding AMPS of MuniYield Insured.
      &lt;/R&gt; </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 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;&lt;R&gt;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
      or AMPS of MuniYield Insured. &lt;/R&gt;</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 plurality 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 </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: 56; page: 56" -->



<p><table width=600><tr><td><font size=2>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 $4,000, plus out-of-pocket expenses
estimated to be approximately $5,084. </font></td></tr></table>

<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. 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 </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: 57; page: 57" -->



<p><table width=600><tr><td><font size=2>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 the common stock of 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><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 <FONT SIZE="1">LLP</FONT>, New York, New York. </font></td></tr></table>

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

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&lt;R&gt;Ernst &amp; Young
      <FONT SIZE="1">LLP</FONT> (&#147;E&amp;Y&#148;), independent auditors, have
      audited the financial statements and financial highlights of MuniYield Insured,
      as of October 31, 2003, as set forth in their report dated December 18,
      2003 which accompanies this Proxy Statement and Prospectus. Deloitte &amp;
      Touche <FONT SIZE="1">LLP</FONT> (&#147;D&amp;T&#148;), independent auditors,
      have audited the financial statements and financial highlights of MuniInsured,
      as of September 30, 2003, as set forth in their report dated November 24,
      2003. The audited financial statements and financial highlights of the Funds
      are included in reliance upon these reports, on the authority of E&amp;Y
      and D&amp;T, respectively, as experts in accounting and auditing. </font></td>
  </tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E&amp;Y, will serve as the
      independent auditors for the Pro Forma MuniYield Insured Combined Fund after
      the Reorganization. The principal business address of E&amp;Y is 99 Wood
      Avenue South, Iselin, New Jersey 08830-0471. &lt;/R&gt;</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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<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;&lt;R&gt;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 2005 Annual Meeting must be received by MuniInsured by
      November 19, 2004 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 2, 2005. Written proposals and notices should
      be sent to the Secretary of the Fund, 800 Scudders Mill Road, Plainsboro,
      New Jersey 08536. &lt;/R&gt;</font></td>
  </tr></table>

<P><table width=600>
  <tr>
    <td align=right width="393">&nbsp;</td>
    <td align=left width="195"><font size=2>By Order of the Boards of Directors
      <br>
      <br>
      Phillip S. Gillespie <br>
      <i>Secretary,</i> <br>
      MuniInsured Fund, Inc. </font></td>
  </tr>
</table>
<p>
<table width=600>
  <tr>
    <td><font size=2>Plainsboro, New Jersey <br>
      &lt;R&gt;Dated: April 16, 2004&lt;/R&gt;</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: 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>&lt;R&gt;<B>INFORMATION PERTAINING TO MUNIYIELD
      INSURED AND MUNIINSURED FUND</B></font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Set forth below is
certain biographical and other information relating to the Directors, including the three
Class III Director  nominees, who are not &#147;interested persons,&#148; as defined in
the Investment Company Act, of each Fund:</font></td></tr></table>


<br>
<table border=0 cellspacing=0 cellpadding=0 width=640>
  <tr valign="bottom" align="center">
    <td> <b><font size="1"> Name, Address* and<br>
      Age of Director </font></b>
      <hr noshade size="1">
    </td>
    <td> <b>&nbsp;&nbsp;&nbsp;</b></td>
    <td> <b><font size="1"> Position(s)<br>
      Held with the<br>
      Funds </font></b>
      <hr noshade size="1">
    </td>
    <td> <b>&nbsp;&nbsp;&nbsp;</b></td>
    <td> <b><font size="1"> Term of<br>
      Office** and<br>
      Length of<br>
      Time Served </font></b>
      <hr noshade size="1">
    </td>
    <td> <b>&nbsp;&nbsp;&nbsp;</b></td>
    <td> <b><font size="1"> Principal Occupation<br>
      During Past Five Years </font></b>
      <hr noshade size="1">
    </td>
    <td> <b>&nbsp;&nbsp;&nbsp;</b></td>
    <td> <b><font size="1"> Number of<br>
      MLIM/FAM-<br>
      Advised Funds<br>
      and Portfolios<br>
      Overseen </font></b>
      <hr noshade size="1">
    </td>
    <td> <b>&nbsp;&nbsp;</b></td>
    <td> <b><font size="1"> Public<br>
      Directorships </font></b>
      <hr noshade size="1">
    </td>
  </tr>
  <tr>
    <td valign=top> <font size="1"> James H. Bodurtha (60) </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> Director </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> Director of MuniInsured since 2002 and MuniYield
      Insured since 2002 </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> Director, The China Business Group, Inc. since
      1996 and Executive Vice President thereof from 1996 to 2003; Chairman of
      the Board, Berkshire Holding Corporation since 1980; Partner, Squire, Sanders
      &amp; Dempsey from 1980 to 1993. </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> 39 registered investment companies consisting
      of<br>
      56 portfolios </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> None </font></td>
  </tr>
  <tr>
    <td valign=top>&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 valign=top>&nbsp; </td>
    <td valign=top>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
  </tr>
  <tr>
    <td valign=top> <font size="1"> Joe Grills (69) </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> Director </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> Director of MuniInsured since 1994 and MuniYield
      Insured since 1994 </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> Member of the Committee of Investment of Employee
      Benefit Assets of the Association of Financial Professionals (&#147;CIEBA&#148;)
      since 1986; Member of CIEBA&#146;s Executive Committee since 1988 and its
      Chairman from 1991 to 1992; Assistant Treasurer of International Business
      Machines Corporation (&#147;IBM&#148;) and Chief Investment Officer of IBM
      Retirement Funds from 1986 to 1993; Member of the Investment Advisory Committee
      of the State of New York Common Retirement Fund since 1989; Member of the
      Investment Advisory Committee of the Howard Hughes Medical Institute from
      1997 to 2000; Director, Duke Management Company since 1992 and Vice Chairman
      thereof since 1998; Director, LaSalle Street Fund from 1995 to 2001; Director,
      Kimco Realty Corporation since 1997; Member of the Investment Advisory Committee
      of the Virginia Retirement System since 1998 and Vice Chairman thereof since
      2002; Director, Montpelier Foundation since 1998 and its Vice Chairman since
      2000; Member of the Investment Committee of the Woodberry Forest School
      since 2000; Member of the Investment Committee of the National Trust for
      Historic Preservation since 2000. </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> 39 registered investment companies consisting
      of<br>
      56 portfolios </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> Kimco Realty Corporation </font></td>
  </tr>
  <tr>
    <td valign=top><font size=2>&lt;/R&gt;</font></td>
    <td valign=top>&nbsp;</td>
    <td valign=top>&nbsp;</td>
    <td valign=top>&nbsp;</td>
    <td valign=top>&nbsp;</td>
    <td valign=top>&nbsp;</td>
    <td valign=top>&nbsp;</td>
    <td valign=top>&nbsp;</td>
    <td valign=top>&nbsp;</td>
    <td valign=top>&nbsp;</td>
    <td valign=top>&nbsp;</td>
  </tr>
</table>
<p><br>
</p>
<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: 1; page: 1" -->
<p>&nbsp;
<table border=0 cellspacing=0 cellpadding=0 width=640>
  <tr valign="bottom">
    <td><font size=2>&lt;R&gt;</font></td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td align="center"> <b><font size="1"> Name, Address* and<br>
      Age of Director </font></b>
      <hr noshade size="1">
    </td>
    <td align="center"> <b>&nbsp;&nbsp;&nbsp;</b></td>
    <td align="center"> <b><font size="1"> Position(s)<br>
      Held with the<br>
      Funds </font></b>
      <hr noshade size="1">
    </td>
    <td align="center"> <b>&nbsp;&nbsp;&nbsp;</b></td>
    <td align="center"> <b><font size="1"> Term of<br>
      Office** and<br>
      Length of<br>
      Time Served </font></b>
      <hr noshade size="1">
    </td>
    <td align="center"> <b>&nbsp;&nbsp;&nbsp;</b></td>
    <td align="center"> <b><font size="1"> Principal Occupation<br>
      During Past Five Years </font></b>
      <hr noshade size="1">
    </td>
    <td align="center"> <b>&nbsp;&nbsp;&nbsp;</b></td>
    <td align="center"> <b><font size="1"> Number of<br>
      MLIM/FAM-<br>
      Advised Funds<br>
      and Portfolios<br>
      Overseen </font></b>
      <hr noshade size="1">
    </td>
    <td align="center"> <b>&nbsp;&nbsp;</b></td>
    <td align="center"> <b><font size="1"> Public<br>
      Directorships </font></b>
      <hr noshade size="1">
    </td>
  </tr>
  <tr>
    <td valign=top> <font size="1"> Herbert I. London (65) </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> Director </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> Director of MuniInsured since 2002 and MuniYield
      Insured since 2002 </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> John M. Olin Professor of Humanities, New
      York University since 1993 and Professor thereof since 1980; President,
      Hudson Institute since 1997 and Trustee thereof since 1980; Dean, Gallatin
      Division of New York University from 1976 to 1993; Distinguished Fellow,
      Herman Kahn Chair, Hudson Institute from 1984 to 1985; Director, Damon Corp.
      from 1991 to 1995; Overseer, Center for Naval Analyses from 1983 to 1993;
      Limited Partner, Hypertech LP since 1996. </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> 39 registered investment companies consisting
      of<br>
      56 portfolios </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> None </font></td>
  </tr>
  <tr>
    <td valign=top>&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 valign=top>&nbsp; </td>
    <td valign=top>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
  </tr>
  <tr>
    <td valign=top> <font size="1"> Andr&#233; F. Perold (52) </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> Director </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> Director of MuniInsured since 2002 and MuniYield
      Insured since 2002 </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> Harvard Business School: George Gund Professor
      of Finance and Banking since 2000; Senior Associate Dean, Director of Faculty
      Recruiting since 2001; Finance Area Chair from 1996 to 2001; Sylvan C. Coleman
      Professor of Financial Management from 1993 to 2000; Director, Genbel Securities
      Limited and Gensec Bank from 1999 to 2003; Director, Stockback, Inc. from
      2000 to 2002; Director, Sanlam Limited from 2001 to 2003; Trustee, Commonfund
      from 1989 to 2001; Director, Sanlam Investment Management from 1999 to 2001;
      Director, Bulldogresearch.com from 2000 to 2001; Director, Quantec Limited
      from 1991 to 1999; Director and Chairman of the Board of UNX Inc. since
      2003. </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> 39 registered investment companies consisting
      of<br>
      56 portfolios </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> None </font></td>
  </tr>
  <tr>
    <td valign=top> <font size="1">&nbsp;&nbsp; </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
  </tr>
  <tr>
    <td valign=top> <font size="1"> Roberta Cooper Ramo (61) </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> Director </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> Director of MuniInsured since 2002 and MuniYield
      Insured since 2002 </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> Shareholder, Modrall, Sperling, Roehl, Harris
      &amp; Sisk, P.A. since 1993; President, American Bar Association from 1995
      to 1996 and Member of the Board of Governors thereof from 1994 to 1997;
      Shareholder, Poole, Kelly &amp; Ramo, Attorneys at Law, P.C. from 1977 to
      1993; Director, Coopers, Inc. since 1999; Director of ECMC Group (service
      provider to students, schools and lenders) since 2001; Director, United
      New Mexico Bank (now Wells Fargo) from 1983 to 1988; Director, First National
      Bank of New Mexico now Wells Fargo) from 1975 to 1976. </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> 39 registered investment companies consisting
      of<br>
      56 portfolios </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> None </font></td>
  </tr>
  <tr>
    <td valign=top> <font size="1">&nbsp;&nbsp; </font><font size=2>&lt;/R&gt;</font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </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;

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

<p>&nbsp;
<table border=0 cellspacing=0 cellpadding=0 width=640>
  <tr valign="bottom" align="center">
    <td align="left"><font size=2>&lt;R&gt;</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="bottom" align="center">
    <td> <b><font size="1"> Name, Address* and<br>
      Age of Director </font></b>
      <hr noshade size="1">
    </td>
    <td> <b>&nbsp;&nbsp;&nbsp;</b></td>
    <td> <b><font size="1"> Position(s)<br>
      Held with the<br>
      Funds </font></b>
      <hr noshade size="1">
    </td>
    <td> <b>&nbsp;&nbsp;&nbsp;</b></td>
    <td> <b><font size="1"> Term of<br>
      Office** and<br>
      Length of<br>
      Time Served </font></b>
      <hr noshade size="1">
    </td>
    <td> <b>&nbsp;&nbsp;&nbsp;</b></td>
    <td> <b><font size="1"> Principal Occupation<br>
      During Past Five Years </font></b>
      <hr noshade size="1">
    </td>
    <td> <b>&nbsp;&nbsp;&nbsp;</b></td>
    <td> <b><font size="1"> Number of<br>
      MLIM/FAM-<br>
      Advised Funds<br>
      and Portfolios<br>
      Overseen </font></b>
      <hr noshade size="1">
    </td>
    <td> <b>&nbsp;&nbsp;</b></td>
    <td> <b><font size="1"> Public<br>
      Directorships </font></b>
      <hr noshade size="1">
    </td>
  </tr>
  <tr>
    <td valign=top> <font size="1"> Robert S. Salomon, Jr. (67) </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> Director </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> Director of MuniInsured since 1996 and MuniYield
      Insured since 1996 </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> Principal of STI Management (investment adviser)
      since 1994; Chairman and CEO of Salomon Brothers Asset Management from 1992
      until 1995; Chairman of Salomon Brothers equity mutual funds from 1992 until
      1995; regular columnist with Forbes Magazine from 1992 to 2002; Director
      of Stock Research and U.S. Equity Strategist at Salomon Brothers from 1975
      until 1991; Trustee, Commonfund from 1980 to 2001. </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> 39 registered investment companies consisting
      of<br>
      56 portfolios </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> None </font></td>
  </tr>
  <tr>
    <td valign=top>&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 valign=top>&nbsp; </td>
    <td valign=top>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
  </tr>
  <tr>
    <td valign=top> <font size="1"> Stephen B. Swensrud (70) </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> Director </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> Director of MuniInsured since 1987 and MuniYield
      Insured since 1992 </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> Chairman of Fernwood Associates (investment
      adviser) since 1996; Principal, Fernwood Associates (financial consultants)
      since 1975; Chairman of R.P.P. Corporation (manufacturing company) since
      1978; Director of International Mobile Communications, Inc. (telecommunications
      company) since 1998. </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> 40 registered investment companies consisting
      of<br>
      57 portfolios </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> 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">* </font></td><td width=2%><font size="1"></font></td><td width=94%><font size="1"> The
address of each non-interested Director is P.O. Box 9095, Princeton, New Jersey
08543-9095.</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"> Each
Director serves until his or her successor is elected and qualified, or until December 31
of the year in which he or  she turns 72, or until his or her death, resignation, or
removal as provided in the Fund&#146;s by-laws, charter or by statute.</font></td></tr></table>

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

<br>
<table border=0 cellspacing=0 cellpadding=0 width=640>
  <tr valign="bottom" align="center">
    <td width="97"> <b><font size="1"> Name, Address* <br>
      and Age </font></b>
      <hr noshade size="1">
    </td>
    <td width="10"> <b><font size="1">&nbsp;&nbsp; </font></b></td>
    <td width="67"> <b><font size="1"> Position(s) <br>
      Held with the<br>
      Funds </font></b>
      <hr noshade size="1">
    </td>
    <td width="10"> <b><font size="1">&nbsp;&nbsp; </font></b></td>
    <td width="68"> <b><font size="1"> Term of<br>
      Office** and<br>
      Length of<br>
      Time Served </font></b>
      <hr noshade size="1">
    </td>
    <td width="10"> <b><font size="1">&nbsp;&nbsp; </font></b></td>
    <td width="223"> <b><font size="1"> Principal Occupation(s) <br>
      During Past Five Years </font></b>
      <hr noshade size="1">
    </td>
    <td width="11"> <b><font size="1">&nbsp;&nbsp; </font></b></td>
    <td width="69"> <b><font size="1"> Number of<br>
      MLIM/FAM<br>
      Advised Funds<br>
      and Portfolios<br>
      Overseen </font></b>
      <hr noshade size="1">
    </td>
    <td width="9"> <b><font size="1">&nbsp;&nbsp; </font></b></td>
    <td width="66"> <b><font size="1"> Public<br>
      Directorships </font></b>
      <hr noshade size="1">
    </td>
  </tr>
  <tr>
    <td valign=top width="97"> <font size="1"> Terry K. Glenn (63)*** </font></td>
    <td valign=top width="10">&nbsp; </td>
    <td valign=top width="67"> <font size="1"> President and Director </font></td>
    <td valign=top width="10">&nbsp; </td>
    <td valign=top width="68"> <font size="1"> President and Director of each
      Fund since 1999**** </font></td>
    <td valign=top width="10">&nbsp; </td>
    <td valign=top width="223"> <font size="1"> President of the MLIM/FAM-advised
      funds since 1999; Chairman (Americas Region) of MLIM from 2000 to 2002;
      Executive Vice President of MLIM and FAM (which terms as used herein include
      their corporate predecessors) from 1983 to 2002; President of FAM Distributors,
      Inc. (&#147;FAMD&#148; or the &#147;Distributor&#148;) from 1986 to 2002
      and Director thereof from 1991 to 2002; Executive Vice President and Director
      of Princeton Services, Inc. (&#147;Princeton Services&#148;) from 1993 to
      2002; President of Princeton Administrators, L.P. from 1988 to 2002; Director
      of Financial Data Services, Inc. from 1985 to 2002. </font></td>
    <td valign=top width="11">&nbsp; </td>
    <td valign=top width="69"> <font size="1"> 126 registered investment companies
      consisting of<br>
      160 portfolios </font></td>
    <td valign=top width="9">&nbsp; </td>
    <td valign=top width="66"> <font size="1"> None </font></td>
  </tr>
  <tr>
    <td valign=top width="97"><font size=2>&lt;/R&gt;</font></td>
    <td valign=top width="10">&nbsp;</td>
    <td valign=top width="67">&nbsp;</td>
    <td valign=top width="10">&nbsp;</td>
    <td valign=top width="68">&nbsp;</td>
    <td valign=top width="10">&nbsp;</td>
    <td valign=top width="223">&nbsp;</td>
    <td valign=top width="11">&nbsp;</td>
    <td valign=top width="69">&nbsp;</td>
    <td valign=top width="9">&nbsp;</td>
    <td valign=top width="66">&nbsp;</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-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: 3; page: 3" -->
<p>&nbsp;
<table border=0 cellspacing=0 cellpadding=0 width=640>
  <tr valign="bottom" align="center">
    <td align="left"><font size=2>&lt;R&gt;</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr valign="bottom" align="center">
    <td> <b><font size="1"> Name, Address* <br>
      and Age </font></b>
      <hr noshade size="1">
    </td>
    <td> <b><font size="1">&nbsp;&nbsp; </font></b></td>
    <td> <b><font size="1"> Position(s) <br>
      Held with the<br>
      Funds </font></b>
      <hr noshade size="1">
    </td>
    <td> <b><font size="1">&nbsp;&nbsp; </font></b></td>
    <td> <b><font size="1"> Term of<br>
      Office** and<br>
      Length of<br>
      Time Served </font></b>
      <hr noshade size="1">
    </td>
    <td> <b><font size="1">&nbsp;&nbsp; </font></b></td>
    <td> <b><font size="1"> Principal Occupation(s) <br>
      During Past Five Years </font></b>
      <hr noshade size="1">
    </td>
    <td> <b><font size="1">&nbsp;&nbsp; </font></b></td>
    <td> <b><font size="1"> Number of<br>
      MLIM/FAM<br>
      Advised Funds<br>
      and Portfolios<br>
      Overseen </font></b>
      <hr noshade size="1">
    </td>
    <td> <b><font size="1">&nbsp;&nbsp; </font></b></td>
    <td> <b><font size="1"> Public<br>
      Directorships </font></b>
      <hr noshade size="1">
    </td>
  </tr>
  <tr>
    <td valign=top> <font size="1"> Donald C. Burke (43) </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> Vice President and Treasurer </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> Vice President of each Fund since 1993 and
      Treasurer of each Fund since 1999 </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> First Vice President of MLIM and FAM since
      1997 and Treasurer thereof since 1999; Senior Vice President and Treasurer
      of Princeton Services since 1999; Vice President of FAMD since 1999; Vice
      President of MLIM and FAM from 1990 to 1997; Director of Taxation of MLIM
      since 1990. </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> 125 registered investment companies consisting
      of<br>
      159 portfolios </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> None </font></td>
  </tr>
  <tr>
    <td valign=top>&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 valign=top>&nbsp; </td>
    <td valign=top>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
  </tr>
  <tr>
    <td valign=top> <font size="1"> William R. Bock (68) </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> Vice President </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> Vice President of MuniInsured since 1997 and
      Vice President of MuniYield Insured since 1993 </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> Vice President of MLIM since 1989. </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> 5 registered investment companies consisting
      of<br>
      5 portfolios </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> None </font></td>
  </tr>
  <tr>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
    <td valign=top>&nbsp; </td>
  </tr>
  <tr>
    <td valign=top> <font size="1"> Phillip S. Gillespie (40) </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> Secretary </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> Secretary of each Fund since 2004 </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> First Vice President of MLIM since 2001; Director
      of MLIM from 2000 to 2001; Vice President of MLIM from 1999 to 2000; Attorney
      associated with MLIM since 1998; Assistant General Counsel of Chancellor
      LGT Asset Management, Inc. from 1997 to 1998; Senior Counsel and Attorney
      in the Division of Investment Management and the Office of General Counsel
      at the U.S. Securities and Exchange Commission from 1993 to 1997. </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> 125 registered investment companies consisting
      of<br>
      159 portfolios </font></td>
    <td valign=top>&nbsp; </td>
    <td valign=top> <font size="1"> 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">* </font></td><td width=2%><font size="1"></font></td><td width=94%><font size="1"> The
address of each officer listed is P.O. Box 9011, Princeton, New Jersey 08543-9011.</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"> Elected
by and serves at the pleasure of the Board of Directors of the Funds.</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.
Glenn is an &#147;interested person,&#148; as defined in the Investment Company Act, of
the Funds based on his former positions  with FAM, MLIM, FAMD, Princeton Services, and
Princeton Administrators, L.P.</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 a Director, Mr. Glenn serves until his successor
      is elected and qualified or until December 31 of the year in which he turns
      72, or until his death, resignation, or removal as provided in the Fund&#146;s
      by-laws, charter or by statute. Mr. Glenn is expected to retire as a Director
      as of May 31, 2004. &lt;/R&gt;</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=2>&lt;R&gt;</font></td>
    <td>&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td> <b><font size="1">Name of Director </font></b>
      <hr noshade size="1" width="40%" align="left">
    </td>
    <td> <b><font size="1">&nbsp;&nbsp;&nbsp; </font></b></td>
    <td align="center"> <b><font size="1">Aggregate Dollar <br>
      Range of Equity in<br>
      MuniInsured Fund </font></b>
      <hr noshade size="1">
    </td>
    <td align="center"> <b><font size="1">&nbsp;&nbsp; </font></b></td>
    <td align="center"> <b><font size="1">Aggregate Dollar Range of<br>
      Securities in Supervised<br>
      Merrill Lynch Funds </font></b>
      <hr noshade size="1">
    </td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2"><i>Interested Director:</i> </font></td>
    <td>&nbsp; </td>
    <td align="center">&nbsp; </td>
    <td align="center">&nbsp; </td>
    <td align="center">&nbsp; </td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">&nbsp;&nbsp;&nbsp;Terry K. Glenn </font></td>
    <td>&nbsp; </td>
    <td align="center"> <font size="2">None </font></td>
    <td align="center">&nbsp; </td>
    <td align="center"> <font size="2">Over $100,000 </font></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2"><i>Non-Interested Directors:</i> </font></td>
    <td>&nbsp; </td>
    <td align="center">&nbsp; </td>
    <td align="center">&nbsp; </td>
    <td align="center">&nbsp; </td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">&nbsp;&nbsp;&nbsp;James H. Bodurtha </font></td>
    <td>&nbsp; </td>
    <td align="center"> <font size="2">None </font></td>
    <td align="center">&nbsp; </td>
    <td align="center"> <font size="2">Over $100,000 </font></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">&nbsp;&nbsp;&nbsp;Joe Grills </font></td>
    <td>&nbsp; </td>
    <td align="center"> <font size="2">None </font></td>
    <td align="center">&nbsp; </td>
    <td align="center"> <font size="2">Over $100,000 </font></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">&nbsp;&nbsp;&nbsp;Herbert I. London </font></td>
    <td>&nbsp; </td>
    <td align="center"> <font size="2">None </font></td>
    <td align="center">&nbsp; </td>
    <td align="center"> <font size="2">Over $100,000 </font></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">&nbsp;&nbsp;&nbsp;Andr&#233; F. Perold </font></td>
    <td>&nbsp; </td>
    <td align="center"> <font size="2">None </font></td>
    <td align="center">&nbsp; </td>
    <td align="center"> <font size="2">None </font></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">&nbsp;&nbsp;&nbsp;Roberta Cooper Ramo </font></td>
    <td>&nbsp; </td>
    <td align="center"> <font size="2">None </font></td>
    <td align="center">&nbsp; </td>
    <td align="center"> <font size="2">$50,001 - $100,000 </font></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">&nbsp;&nbsp;&nbsp;Robert S. Salomon, Jr. </font></td>
    <td>&nbsp; </td>
    <td align="center"> <font size="2">None </font></td>
    <td align="center">&nbsp; </td>
    <td align="center"> <font size="2">None </font></td>
  </tr>
  <tr valign="bottom">
    <td height="18"> <font size="2">&nbsp;&nbsp;&nbsp;Stephen B. Swensrud </font></td>
    <td height="18">&nbsp; </td>
    <td align="center" height="18"> <font size="2">None </font></td>
    <td align="center" height="18">&nbsp; </td>
    <td align="center" height="18"> <font size="2">None </font></td>
  </tr>
  <tr valign="bottom">
    <td height="18"><font size=2>&lt;/R&gt;</font></td>
    <td height="18">&nbsp;</td>
    <td align="center" height="18">&nbsp;</td>
    <td align="center" height="18">&nbsp;</td>
    <td align="center" height="18">&nbsp;</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-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: 4; page: 4" -->
<p>&nbsp;
<table border=0 cellspacing=0 cellpadding=0 width="600">
  <tr valign="bottom">
    <td><font size=2>&lt;R&gt;</font> </td>
    <td>&nbsp; </td>
    <td align="center">&nbsp; </td>
    <td align="center">&nbsp; </td>
    <td align="center">&nbsp; </td>
  </tr>
  <tr valign="bottom">
    <td> <font size="1"><b>Name of Director</b> </font>
      <hr noshade size="1" width="40%" align="left">
    </td>
    <td>&nbsp; </td>
    <td align="center"> <font size="1"><b>Aggregate Dollar <br>
      Range of Equity in<br>
      MuniYield Insured Fund</b> </font>
      <hr noshade size="1">
    </td>
    <td align="center">&nbsp; </td>
    <td align="center"> <font size="1"><b>Aggregate Dollar Range of<br>
      Securities in Supervised<br>
      Merrill Lynch Funds</b> </font>
      <hr noshade size="1">
    </td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2"><i>Interested Director:</i> </font></td>
    <td>&nbsp; </td>
    <td align="center">&nbsp; </td>
    <td align="center">&nbsp; </td>
    <td align="center">&nbsp; </td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">&nbsp;&nbsp;&nbsp;Terry K. Glenn </font></td>
    <td>&nbsp; </td>
    <td align="center"> <font size="2">None </font></td>
    <td align="center">&nbsp; </td>
    <td align="center"> <font size="2">Over $100,000 </font></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2"><i>Non-Interested Directors:</i> </font></td>
    <td>&nbsp; </td>
    <td align="center">&nbsp; </td>
    <td align="center">&nbsp; </td>
    <td align="center">&nbsp; </td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">&nbsp;&nbsp;&nbsp;James H. Bodurtha </font></td>
    <td>&nbsp; </td>
    <td align="center"> <font size="2">None </font></td>
    <td align="center">&nbsp; </td>
    <td align="center"> <font size="2">Over $100,000 </font></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">&nbsp;&nbsp;&nbsp;Joe Grills </font></td>
    <td>&nbsp; </td>
    <td align="center"> <font size="2">None </font></td>
    <td align="center">&nbsp; </td>
    <td align="center"> <font size="2">Over $100,000 </font></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">&nbsp;&nbsp;&nbsp;Herbert I. London </font></td>
    <td>&nbsp; </td>
    <td align="center"> <font size="2">None </font></td>
    <td align="center">&nbsp; </td>
    <td align="center"> <font size="2">Over $100,000 </font></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">&nbsp;&nbsp;&nbsp;Andr&#233; F. Perold </font></td>
    <td>&nbsp; </td>
    <td align="center"> <font size="2">None </font></td>
    <td align="center">&nbsp; </td>
    <td align="center"> <font size="2">None </font></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">&nbsp;&nbsp;&nbsp;Roberta Cooper Ramo </font></td>
    <td>&nbsp; </td>
    <td align="center"> <font size="2">None </font></td>
    <td align="center">&nbsp; </td>
    <td align="center"> <font size="2">$50,001 - $100,000 </font></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">&nbsp;&nbsp;&nbsp;Robert S. Salomon, Jr. </font></td>
    <td>&nbsp; </td>
    <td align="center"> <font size="2">None </font></td>
    <td align="center">&nbsp; </td>
    <td align="center"> <font size="2">None </font></td>
  </tr>
  <tr valign="bottom">
    <td> <font size="2">&nbsp;&nbsp;&nbsp;Stephen B. Swensrud </font></td>
    <td>&nbsp; </td>
    <td align="center"> <font size="2">None </font></td>
    <td align="center">&nbsp; </td>
    <td align="center"> <font size="2">None</font></td>
  </tr>
  <tr valign="bottom">
    <td><font size=2>&lt;/R&gt;</font></td>
    <td>&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</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-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: 5; page: 5" -->





<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;&lt;R&gt;THIS AGREEMENT AND
      PLAN OF REORGANIZATION (&#147;Agreement&#148;) is made as of the 14th day
      of April, 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;).&lt;/R&gt;</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;&lt;R&gt;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 (&#147;MuniYield Insured Shares&#148;) and (2) the subsequent distribution
      of the MuniYield Insured Shares (plus cash in lieu of any fractional shares)
      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,
      stockholders of MuniInsured as of the Valuation Time (as defined in Section
      3(c) of this Agreement) will be entitled to receive MuniYield Insured Shares,
      (plus cash in lieu of any fractional shares) the aggregate net asset value
      which 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 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.
      &lt;/R&gt;</font></td>
  </tr></table>

<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">1. <I>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><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&lt;R&gt;(a) MuniInsured is
      a corporation duly incorporated, 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.&nbsp;&nbsp;&nbsp;&lt;/R&gt;</font></td>
  </tr></table>

<p><table width=600><tr><td><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 </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;





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







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

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&lt;R&gt;(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(d) 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. &lt;/R&gt;</font></td>
  </tr></table>

<p><table width=600><tr><td><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><table width=600><tr>
    <td><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><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><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&lt;R&gt;(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 other than such investigations or violations that
      would not have a material adverse affect on MuniInsured. &lt;/R&gt;</font></td>
  </tr></table>

<p><table width=600><tr><td><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><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&lt;R&gt;(i) MuniInsured is
      not a party to or obligated under any provision of its Articles of Incorporation,
      as amended, restated and supplemented, or its by-laws, as amended, or 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. &lt;/R&gt;</font></td>
  </tr></table>

<p><table width=600><tr><td><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><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 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><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 </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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<p><table width=600><tr><td><font size=2>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><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><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&lt;R&gt;(n) The registration
      statement filed by MuniYield Insured on Form N-14 relating to the MuniYield
      Insured Shares 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. &lt;/R&gt;</font></td>
  </tr></table>

<p><table width=600><tr><td><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><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><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><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&lt;R&gt;(r) MuniInsured will
      not sell or otherwise dispose of any of the MuniYield Insured Shares to
      be received in the Reorganization, except in distribution to its stockholders
      and to pay cash in lieu of fractional shares as provided herein.&lt;/R&gt;</font></td>
  </tr></table>

<p><table width=600><tr><td><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><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">2. <i>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><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&lt;R&gt;(a) MuniYield Insured
      is a corporation duly incorporated, 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. &lt;/R&gt;</font></td>
  </tr></table>

<p><table width=600><tr><td><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>&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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<p><table width=600><tr><td><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, llp, 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><table width=600><tr><td><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><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><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><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><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&lt;R&gt;(h) MuniYield Insured
      is not a party to or obligated under any provision of its Articles of Incorporation,
      as amended, restated and supplemented, or its by-laws, as amended, or 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. &lt;/R&gt;</font></td>
  </tr></table>

<p><table width=600><tr><td><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><table width=600><tr><td><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><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><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 </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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<p><table width=600><tr><td><font size=2>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><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><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><table width=600><tr><td><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 MuniYield Insured Shares to MuniInsured for
distribution to the stockholders of MuniInsured.</font></td></tr></table>

<p><table width=600><tr><td><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">3. <I>The Reorganization.</I></FONT></td>
  </tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&lt;R&gt;(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
      MuniYield Insured Shares, along with any cash in lieu of fractional shares
      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><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 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.&lt;/R&gt;</font></td>
  </tr></table>

<p><table width=600><tr><td><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.  (d) The  Valuation  Time  shall be 4:00
p.m.  New York  time,  on June 4,  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><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><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><table width=600><tr><td><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>&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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<p><table width=600><tr>
    <td> <FONT SIZE="2">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
      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;&lt;R&gt;MuniYield Insured
      shall issue its shares of common stock to MuniInsured and pay cash in lieu
      of any fractional shares by the opening of a stockholder account on the
      stock ledger records of MuniYield Insured registered in the name of MuniInsured.
      MuniInsured shall distribute MuniYield Insured Shares to its stockholders
      and pay cash in lieu of any fractional shares 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 Shares, registered in the name of MuniInsured. MuniInsured then
      shall distribute the MuniYield Insured Shares 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 evidencing ownership to MuniYield
      Insured common stock, exchange MuniYield Insured common stock credited to
      such stockholder&#146;s account for shares of other investment companies
      managed by Fund Asset Management, L.P. (&#147;FAM&#148;) 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. &lt;/R&gt;</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">5. <I>Payment of Expenses.</I></FONT></td>
  </tr></table>

<p><table width=600><tr><td><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 </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;





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<p><table width=600><tr>
    <td><font size=2>&lt;R&gt;the Proxy Statement and Prospectus. The expenses
      of the Reorganization that are directly attributable to MuniYield Insured
      will be borne by its investment adviser, FAM. 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, Securities and Exchange Commission fees, stock exchange
      fees, rating agency fees, legal, transfer agent and audit fees, will be
      borne equally by MuniInsured and FAM. &lt;/R&gt;</font></td>
  </tr></table>

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

<p><table width=600><tr><td><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  meeting at or prior to the
Valuation  Time. </font></td></tr></table>

<p><table width=600><tr><td><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><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&lt;R&gt;(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 MuniYield
      Insured Shares 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. &lt;/R&gt;</font></td>
  </tr></table>

<p><table width=600><tr><td><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><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
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><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) MuniInsured
agrees to mail to its stockholders of record entitled to vote at  the 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>&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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<!-- MARKER PAGE="sheet: 12; page: 12" -->



<p><table width=600><tr><td><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><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><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">7. <I>Closing Date.</I></FONT></td>
  </tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&lt;R&gt;(a) Delivery of the
      assets of MuniInsured to be transferred, together with any other MuniInsured
      Investments, and the MuniYield Insured Shares 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. &lt;/R&gt;</font></td>
  </tr></table>

<p><table width=600><tr><td><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><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><table width=600><tr>
    <td> <FONT SIZE="2">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><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><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><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><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><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&lt;R&gt;(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 MuniYield
      Insured Shares to be issued pursuant to this Agreement are duly authorized
      and, when issued and delivered &lt;/R&gt;</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><FONT SIZE="2">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, 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 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><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) That
MuniInsured  shall have  received a letter from Sidley  Austin Brown &amp; Wood llp, 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 </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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<!-- MARKER PAGE="sheet: 14; page: 14" -->









<p><table width=600><tr><td><font size=2>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><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&lt;R&gt;(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 MuniYield Insured Shares 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 MuniYield Insured Shares 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 MuniYield Insured Shares in exchange for
      their shares of MuniInsured, except to the extent that a stockholder receives
      cash in lieu of fractional shares of 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 MuniYield Insured
      Shares 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 MuniYield Insured Shares 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. &lt;/R&gt;</font></td>
  </tr></table>

<p><table width=600><tr><td><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><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><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&lt;R&gt;(j) That MuniInsured
      shall have received from Ernst &amp; Young, LLP 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 &lt;/R&gt;</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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<!-- MARKER PAGE="sheet: 15; page: 15" -->




<p><table width=600><tr><td><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><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><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 llp, 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">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><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><table width=600><tr><td><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, 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><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><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><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&lt;R&gt;(e) That MuniYield
      Insured shall have received an opinion of Sidley Austin Brown &amp; Wood
      llp, as counsel to MuniInsured and MuniYield Insured, in form and substance
      satisfactory to MuniYield Insured and dated the &lt;/R&gt;</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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<!-- MARKER PAGE="sheet: 16; page: 16" -->




<p><table width=600><tr><td><font size=2>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><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) That MuniYield
Insured shall have received  a letter from Sidley Austin Brown &amp; Wood llp, 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><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><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&lt;R&gt;(h) That MuniYield
      Insured shall have received from Deloitte &amp; Touche, LLP 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 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><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) 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><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) 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><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 MuniInsured  or would  prohibit  the  Reorganization  with respect to
MuniInsured. </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) That
MuniYield  Insured  shall  have  received  from the  Commission  such  orders or
interpretations  as Sidley  Austin  Brown &amp; Wood llp,  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><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) 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. &lt;/R&gt;</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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<!-- MARKER PAGE="sheet: 17; page: 17" -->



<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&lt;R&gt;(n) 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 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. &lt;/R&gt;</font></td>
  </tr></table>

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

<p><table width=600><tr><td><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><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&lt;R&gt;(b) If the transactions
      contemplated by this Agreement have not been consummated by August 31, 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.
      &lt;/R&gt; </font></td>
  </tr></table>

<p><table width=600><tr><td><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><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><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  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><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&lt;R&gt;(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 MuniYield Insured Shares 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. &lt;/R&gt;</font></td>
  </tr></table>

<p><table width=600><tr><td><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">11. <I>Other Matters.</I></FONT></td>
  </tr></table>

<p><table width=600><tr><td><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 </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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<!-- MARKER PAGE="sheet: 18; page: 18" -->



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

<p><table width=600>
<tr><td width=30>&nbsp;</td>
    <td width=570><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;<b>&nbsp;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 IINSURED 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.</b></font></td>
  </tr></table>

<p><table width=600><tr><td><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 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><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><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><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><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-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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<!-- MARKER PAGE="sheet: 19; page: 19" -->


<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>



<br>
<table width=600>
  <tr>
    <td width="284">&nbsp;</td>
    <td width="20">&nbsp;</td>
    <td colspan="2"><font size="2">MUNI YIELD INSURED FUND, INC.</font></td>
  </tr>
  <tr>
    <td width="284" align="left" valign="top"><font size="2">&lt;R&gt;</font></td>
    <td width="20">&nbsp;</td>
    <td width="21">&nbsp;</td>
    <td width="255" align="center">&nbsp;</td>
  </tr>
  <tr>
    <td width="284" align="left" valign="top">&nbsp;</td>
    <td width="20">&nbsp;</td>
    <td width="21"><font size="2">By: </font></td>
    <td width="255" align="center"><font size="2">/s/ D<font size="1">ONALD</font>
      C. B<font size="1">URKE</font>
      <hr size="1" width="80%" noshade>
      Vice President and Treasurer</font></td>
  </tr>
  <tr>
    <td width="284"><font size="2">Attest:</font></td>
    <td width="20"><font size="2"></font></td>
    <td width="21"><font size="2"></font></td>
    <td width="255"><font size="2"></font></td>
  </tr>
  <tr>
    <td align="center" width="284"><font size="2">/s/ Phillip S. Gillespie
      <hr size="1" width="80%" noshade>
      Secretary </font></td>
    <td width="20"><font size="2"></font></td>
    <td width="21"><font size="2"></font></td>
    <td width="255"><font size="2"> </font></td>
  </tr>
  <tr>
    <td align="left" width="284"><font size="2">&lt;/R&gt;</font></td>
    <td width="20">&nbsp;</td>
    <td width="21">&nbsp;</td>
    <td width="255">&nbsp;</td>
  </tr>
</table>
<table width=600>
  <tr>
    <td width="284">&nbsp;</td>
    <td width="20">&nbsp;</td>
    <td colspan="2"><font size="2">MUNI INSURED FUND, INC.</font></td>
  </tr>
  <tr>
    <td width="284" valign="top"><font size="2">&lt;R&gt;</font></td>
    <td width="20">&nbsp;</td>
    <td width="21">&nbsp;</td>
    <td width="255" align="center">&nbsp;</td>
  </tr>
  <tr>
    <td width="284" valign="top">&nbsp;</td>
    <td width="20">&nbsp;</td>
    <td width="21"><font size="2">By: </font></td>
    <td width="255" align="center"><font size="2">/s/ D<font size="1">ONALD</font>
      C. B<font size="1">URKE</font>
      <hr size="1" width="80%" noshade>
      Vice President and Treasurer</font></td>
  </tr>
  <tr>
    <td width="284"><font size="2">Attest:</font></td>
    <td width="20"><font size="2"></font></td>
    <td width="21"><font size="2"></font></td>
    <td width="255"><font size="2"></font></td>
  </tr>
  <tr>
    <td align="center" width="284"><font size="2">/s/ Phillip S. Gillespie
      <hr size="1" width="80%" noshade>
      Secretary </font></td>
    <td width="20"><font size="2"></font></td>
    <td width="21"><font size="2"></font></td>
    <td width="255"><font size="2"> </font></td>
  </tr>
  <tr>
    <td align="left" width="284"><font size="2">&lt;/R&gt;</font></td>
    <td width="20">&nbsp;</td>
    <td width="21">&nbsp;</td>
    <td width="255">&nbsp;</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 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">&nbsp;Aaa </font></td><td width=90%><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">&nbsp;Aa </font></td><td width=90%><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">&nbsp;A </font></td><td width=90%><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">&nbsp;Baa </font></td><td width=90%><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">&nbsp;Ba </font></td><td width=90%><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">&nbsp;B </font></td><td width=90%><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">&nbsp;Caa </font></td><td width=90%><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">&nbsp;Ca </font></td><td width=90%><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">&nbsp;C </font></td><td width=90%><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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<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><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=16% valign=top><font size="2">&nbsp;MIG 1/VMIG 1</font></td>
    <td width=84%><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=16% valign=top><font size="2">&nbsp;MIG 2/VMIG 2 </font></td>
    <td width=84%><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=16% valign=top><font size="2">&nbsp;MIG 3/VMIG 3</font></td>
    <td width=84%><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>&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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<P><table width=600><tr>
    <td width=15% valign=top><font size="2">&nbsp;SG </font></td>
    <td width=85%><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><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">&nbsp;AAA </font></td><td width=90%><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">&nbsp;AA </font></td><td width=90%><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>&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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<!-- MARKER PAGE="sheet: 2; page: 2" -->



<P><table width=600><tr><td width=10% valign=top><font size="2">&nbsp;A </font></td><td width=90%><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">&nbsp;BBB </font></td><td width=90%><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 valign="top">
    <td width="55"><font size="2">BB <br>
      B <br>
      CCC <br>
      CC <br>
      C <br>
      </font></td>
    <td width="533"><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">&nbsp;D </font></td><td width=90%><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">&nbsp;c </font></td><td width=90%><font size="2">The
`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">&nbsp;p </font></td><td width=90%><font size="2">The
letter  `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">&nbsp;* </font></td><td width=90%><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">&nbsp;r </font></td><td width=90%><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><table width=600><tr><td width=10% valign=top><font size="2">&nbsp;N.R. </font></td><td width=90%><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 (+) or 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&#147; 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">&nbsp;A-1 </font></td><td width=90%><font size="2">A
short-term obligation rated &#147;A-1&#147; 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">&nbsp;A-2 </font></td><td width=90%><font size="2">A
short-term  obligation  rated &#147;A-2&#147; 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">&nbsp;A-3 </font></td><td width=90%><font size="2">A
short-term obligation rated  &#147;A-3&#147; 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>&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">&nbsp;B </font></td><td width=90%><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">&nbsp;C </font></td><td width=90%><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">&nbsp;D </font></td><td width=90%><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">&nbsp;c </font></td><td width=90%><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">&nbsp;p </font></td><td width=90%><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">&nbsp;* </font></td><td width=90%><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">&nbsp;r </font></td><td width=90%><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  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=5% valign=top><font size="2">&nbsp; </font></td>
    <td width=95%><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=5% valign=top><font size="2">&nbsp; </font></td>
    <td width=95%><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 width=5% valign=top><font size="2">&nbsp; </font></td>
    <td width=95%><font size="2">Note rating symbols are as follows:</font></td>
  </tr></table>

<P><table width=600><tr><td width=10% valign=top><font size="2">&nbsp;SP-1 </font></td><td width=90%><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">&nbsp;SP-2 </font></td><td width=90%><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">&nbsp;SP-3 </font></td><td width=90%><font size="2">Speculative
capacity to pay principal and 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">
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><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><table width=600><tr><td width=10% valign=top><font size="2">&nbsp;AAA </font></td><td width=90%><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">&nbsp;AA </font></td><td width=90%><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">&nbsp;A </font></td><td width=90%><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">&nbsp;BBB </font></td><td width=90%><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 (+) or 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>&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">&nbsp;BB </font></td><td width=90%><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">&nbsp;B </font></td><td width=90%><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">&nbsp;CCC </font></td><td width=90%><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">&nbsp;CC </font></td><td width=90%><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">&nbsp;C </font></td><td width=90%><font size="2">Bonds
are in imminent  default in  payment of interest  or  principal. </font></td></tr></table>

<P><table width=600><tr>
    <td width=10% valign=top><font size="2">&nbsp;D <br>
      &nbsp;DD <br>
      &nbsp;DDD </font></td>
    <td width=90%><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>
<P>
<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<i>Plus (+) or 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><table width=600><tr>
    <td width=15% valign=top><font size="2">&nbsp;F-1+ </font></td>
    <td width=90%><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=15% valign=top><font size="2">&nbsp;F-1 </font></td>
    <td width=90%><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=15% valign=top><font size="2">&nbsp;F-2 </font></td>
    <td width=90%><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+&#147; and &#147;F-1&#147; ratings. </font></td></tr></table>

<P><table width=600><tr>
    <td width=15% valign=top><font size="2">&nbsp;F-3 </font></td>
    <td width=90%><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=15% valign=top><font size="2">&nbsp;F-S </font></td>
    <td width=90%><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=15% valign=top><font size="2">&nbsp;D </font></td>
    <td width=90%><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=15% valign=top><font size="2">&nbsp;LOC </font></td>
    <td width=90%><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=15% valign=top><font size="2">&nbsp;NR </font></td>
    <td width=90%><font size="2">Indicates
that Fitch  does not rate the specific issue. </font></td></tr></table>

<P><table width=600><tr>
    <td width=15% valign=top><font size="2">&nbsp;Conditional </font></td>
    <td width=90%><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=15% valign=top><font size="2">&nbsp;Suspended </font></td>
    <td width=90%><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>&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=15% valign=top><font size="2">&nbsp;Withdrawn </font></td>
    <td width=90%><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><table width=600><tr>
    <td width=15% valign=top><font size="2">&nbsp;FitchAlert </font></td>
    <td width=90%><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-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 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 height="58"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&lt;R&gt;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 Ratings (&#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. &lt;/R&gt;</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>i.e</I>., debt contracts).</FONT></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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-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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<p><table width=600><tr>
    <td align=right><font size=2>&lt;R&gt;<B>Exhibit V</B>&lt;/R&gt;<B> </B></font></td>
  </tr></table>

<p><table width=600><tr><td  align=center><font size=2><B>Charter of the Audit Committee
<BR>of the Board of Directors/Trustees  <BR>For Exchange Listed Funds</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although  the
Audit  Committee  of  an  investment  company  also  serves  as a  Nominating  Committee,
the  following  charter  pertains only to each Audit and  Nominating  Committee&#146;s
duties  as  an  Audit  Committee.  The  Board  of  Directors/Trustees  of each
investment  company listed on Appendix A hereto has  adopted the following Audit
Committee Charter.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>I. Composition of the Audit Committee</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Audit
Committee shall be composed of at least three Directors/Trustees:</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) each of whom
shall not be an &#147;interested  person&#148; of the Fund, as defined in  Section
2(a)(19) of the  Investment  Company Act of 1940 (the &#147;1940 Act&#148;); </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)  each of whom
shall not accept directly or indirectly any  consulting,  advisory,  or other
compensatory  fee from the Fund  (other  than fees for  serving on the  Board of
Directors/Trustees or any committee thereof);</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)  each  of whom
shall  be  financially  literate  at the  time of his or her  appointment to the Audit
Committee,  as such qualification is interpreted by the  Board  of  Directors/Trustees
in  its  business  judgment,  or  shall  become  financially  literate  within  a
reasonable  period  of time  after  his or her  appointment to the Audit Committee; </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) each of whom
shall otherwise satisfy the  applicable independence  requirements for any stock exchange
or market quotation  system on which Fund shares are or become listed or quoted; and </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) at least one
of whom shall have accounting or related financial  management  expertise as the  Board
of  Directors/Trustees  interprets  such  qualification  in its  business  judgment. </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of
Directors/Trustees  shall determine annually (i) whether  at least one of the  members
of the  Audit  Committee  is an  &#147;audit  committee  financial  expert,&#148; as
defined  in  Item 3 of Form  N-CSR,  and  (ii)  whether  simultaneous  service on more
than three public  company  audit  committees by a  member of the Audit  Committee  would
not impair the  ability of such  member to  serve on the Audit  Committee. </font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>II.  Purposes of the Audit  Committee </B></font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Audit Committee, in its
      capacity as a committee of the Board of Directors/Trustees, shall be responsible
      for: </font></td>
  </tr></table>

<p><table width=600><tr>
    <td height="6"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) overseeing the
      accounting and financial reporting processes of the Fund and the Fund&#146;s
      internal control over financial reporting;</font></td>
  </tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) overseeing the integrity
      of the Fund&#146;s financial statements and the independent audit thereof;
      </font></td>
  </tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) overseeing, or, as appropriate,
      assisting Board oversight of, the Fund&#146;s compliance with legal and
      regulatory requirements that relate to the Fund&#146;s accounting and financial
      reporting, internal control over financial reporting, and independent audits;
      and </font></td>
  </tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the appointment, compensation,
      retention, and oversight of the Fund&#146;s independent accountants, including
      the resolution of disagreements regarding financial reporting between Fund
      management and such independent accountants. </font></td>
  </tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Audit Committee shall report
      regularly to the Board of Directors/Trustees with respect to the matters
      described in this Audit Committee Charter and shall make such recommendations
      to the Board of Directors/Trustees relating thereto as the Audit Committee
      deems necessary or appropriate. The Fund&#146;s independent accountants
      shall report directly to the Audit Committee. </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">
V-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: 9; page: 9" -->



<p><table width=600><tr>
    <td><font size=2>&lt;R&gt;<B>III. Responsibilities and Duties of the Audit
      Committee </B>&lt;/R&gt;</font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The  policies  and
procedures  of the Audit  Committee  shall remain  flexible  to  facilitate  its  ability
to react to  changing  conditions  and to  generally  discharge  its  functions.  The
following  listed  responsibilities  describe areas of attention in broad terms. </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To carry out its
purposes, the Audit  Committee  shall  have  the  following  responsibilities  and
duties: </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) upon
submission of an application form by the Fund&#146;s  independent  accountants to the
Public  Company  Accounting  Oversight  Board,  to  request  copies of: (i) such
application  form; (ii) any material  amendments to such  application  form; and  (iii)
the written findings of the Public Company  Accounting  Oversight Board in  connection
with that Board&#146;s inspection of the Fund&#146;s  independent  accountants;</font></td></tr></table>


<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) to (i)  select
an  accounting  firm to (1) serve as the  Fund&#146;s  independent  accountants,  (2)
audit the Fund&#146;s financial  statements on an annual basis, and  (3) provide an
opinion on an annual basis with  respect to the Fund&#146;s  financial  statements,  and
(ii)  recommend  that  the  members  of  the  Board  of  Directors/Trustees  who are not
&#147;interested  persons&#148; of the Fund, as defined in  Section 2(a)(19) of the 1940
Act, ratify such selection; </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) to approve,
prior  to appointment,  the engagement of the Fund&#146;s independent accountants to
provide  other audit  services to the Fund or non-audit  services to the Fund, the Fund&#146;s
investment  adviser or any entity  controlling,  controlled  by, or under common  control
with the investment adviser (&#147;adviser  affiliate&#148;) that provides ongoing
services  to the  Fund,  if the  engagement  by the  adviser  affiliate  relates
directly to the operations  and financial  reporting of the Fund; </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) to develop
policies  and  procedures  for  pre-approval  of the  engagement  of the  Fund&#146;s
independent  accountants  to  provide  any of the  audit or  non-audit  services
described in Section III(c) above; </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) to consider
whether: (i) the provision of  each  non-audit  service to the Fund by the Fund&#146;s
independent  accountants  is  compatible with maintaining the independence of such
independent accountants and  (ii) the provision of each non-audit service to the Fund&#146;s
investment adviser or  any adviser  affiliate that provides  ongoing services to the Fund
is compatible  with maintaining the independence of such independent accountants; </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) to ensure
that the Fund&#146;s independent  accountants submit on a periodic basis to the Audit
Committee a formal written statement  delineating all relationships between such
independent  accountants and the Fund,  consistent with  Independence  Standards  Board
Standard No. 1, to actively  engage in a dialogue  with,  and receive and  consider
specific  representations from, the Fund&#146;s independent accountants with  respect  to
any  disclosed  relationships  or  services  that  may  affect  the  objectivity and
independence  of such  independent  accountants  and, if deemed  appropriate  by  the
Audit  Committee,  to  recommend  that  the  Board  of  Directors/Trustees  take
appropriate  action in  response to the report of such  independent  accountants  to
satisfy  itself  of  the  independence  of  such  independent  accountants; </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) to receive and
consider specific  representations  from the Fund&#146;s  independent  accountants with
respect to audit partner rotation  and  conflicts  of interest as  described  in Section
10A(l) of the  Securities  Exchange Act of 1934 (the &#147;1934 Act&#148;); </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) to review the
arrangements for annual  and  special  audits and the scope of such  audits  with the Fund&#146;s
independent  accountants; </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) to review and
discuss the Fund&#146;s audited financial  statements  and,  to the  extent  required  by
applicable  law or  regulations,  the Fund&#146;s  semi-annual financial statements with
Fund management and the Fund&#146;s independent  accountants; </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) to review and
approve  the fees  proposed to be charged to the  Fund by the Fund&#146;s independent
accountants for each audit and non-audit service;</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) to discuss
with the Fund&#146;s independent accountants those matters required by  Statement  of
Accounting  Standards  Nos.  61 and  90  relating  to the  Fund&#146;s  financial
statements,  including,  without  limitation,  any adjustment to such  financial
statements recommended by such independent  accountants,  or any other  results of any
audit; </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">
V-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: 11; page: 11" -->



<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&lt;R&gt;(l) to cause to be
      prepared and to review and submit any report, including any recommendation
      of the Audit Committee, required under rules promulgated by the Securities
      and Exchange Commission to be included in any proxy statement used by the
      Fund; &lt;/R&gt;</font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) to review
legal and regulatory matters  presented  by counsel  and the Fund&#146;s  independent
accountants  that may have a  material  impact  on the  Fund&#146;s  financial
statements; </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) to  establish
and  administer  policies and procedures relating to: (i) the hiring by the Fund, its
investment  adviser,  or any  administrator  that  is an  adviser  affiliate  of
employees or former employees of the Fund&#146;s  independent  accountants;  and (ii)
the  resolution  of any  disagreements  between Fund  management  and the Fund&#146;s
independent accountants regarding accounting and/or financial reporting policies  and
procedures; </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) to  consider
information  and  comments  from the  Fund&#146;s  independent  accountants  with respect
to the Fund&#146;s  accounting  and  financial  reporting  policies,  procedures and
internal  control over financial  reporting  (including  the  Fund&#146;s  critical
accounting  policies  and  practices)  and  management&#146;s  responses to any such
comments; </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) to consider
information  and  comments from the Fund&#146;s independent  accountants with respect to,
and meet with  such independent  accountants to discuss any matters of concern relating
to, the  Fund&#146;s  financial  statements,  including  any  adjustments  to such
statements  recommended  by such  independent  accountants,  and to review  the
independent  accountants&#146; opinion on the Fund&#146;s financial statements; </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) at least
annually,  to obtain and review a report by the Fund&#146;s independent  accountants
describing:  (i) such independent accountants&#146; internal quality-control  procedures;
(ii) any  material issues raised by the most recent internal  quality-control  review,
or  peer review, of such independent accountants, or by any inquiry or investigation  by
governmental or  professional  authorities,  within the preceding five years,  respecting
one or more  independent  audits  carried out by such firm,  and any  steps taken to deal
with any such issues;  and (iii) all  relationships  between  the Fund&#146;s
independent  accountants  and the Fund, the  investment  adviser and  adviser  affiliates
(to  assess  the  independence  of the  Fund&#146;s  independent  accountants); </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) to receive and
consider  reports from the Fund&#146;s  independent  accountants regarding:  (i) all
critical accounting policies and practices to be  used; (ii) all alternative  treatments
of financial information within generally  accepted  accounting  principles that have
been discussed with Fund  management,  ramifications of the use of such alternative
disclosures and treatments, and the  treatment  preferred by the  independent
accountants;  and (iii) other material  written communications between the independent
accountants and Fund management,  such as any  management  letter or schedule of
unadjusted  differences; </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) to  receive
reports  from the Fund&#146;s  principal  executive  officer  and  principal  financial
officer, or persons performing similar functions,  regarding:  (i) all  significant
deficiencies  in the design or  operation  of the  Fund&#146;s  internal  controls  that
could  adversely  affect the Fund&#146;s  ability to record,  process,  summarize,  and
report  financial  data and the  identification  for the Fund&#146;s  independent
accountants of any material  weaknesses in internal controls;  (ii)  any fraud,  whether
or not  material,  that  involves  Fund  management or other  employees or employees of
the investment  adviser who have a significant role in  the Fund&#146;s internal
controls;  and (iii) whether or not there were  significant  changes  in  the  Fund&#146;s
internal  controls  or in  other  factors  that  could  significantly  affect the Fund&#146;s
internal  controls  subsequent  to the date of  their  evaluation,  including any
corrective  actions with regard to significant  deficiencies and material  weaknesses; </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) to establish
procedures for: (i) the  receipt,  retention,  and treatment of complaints received by
the Fund regarding  accounting,  internal  accounting  controls,  or auditing matters;
and (ii) the  confidential,  anonymous  submission  of  concerns  by  employees  of the
Fund&#146;s  investment adviser, manager, administrator,  principal underwriter, or any
other  provider of  accounting  related  services for the Fund  regarding  questionable
accounting or auditing  matters; </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u) to address
reports received from attorneys  in accordance with procedures  adopted by the Fund&#146;s
investment adviser relating  to the  possible  violation of federal or state law or
fiduciary  duty; </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) to  address
reports received from the Fund&#146;s independent accountants relating to the  possible
violation  of federal or state law and to  investigate  or initiate an  investigation  of
reports  of  improprieties  or  suspected  improprieties  in  connection  with the Fund&#146;s
accounting or financial  reporting; </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">
V-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: 12; page: 12" -->



<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&lt;R&gt;(w) to discuss with
      Fund management and the Fund&#146;s independent accountants policies with
      respect to risk assessment and risk management; &lt;/R&gt;</font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) to assist  the
Fund,  if  necessary,  in  preparing  any  written  affirmation  or  written
certification  required to be filed with any stock exchange or market quotation system on
which  Fund  shares are or become  listed or quoted; </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(y) to review  and
reassess  the  adequacy of this Audit  Committee  Charter on an annual basis and
recommend any  changes to the Board of  Directors/Trustees  and to evaluate the
performance of  the Audit Committee on an annual basis;  and </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(z) to perform
such other functions  and to have such other powers consistent with this Audit Committee
Charter,  the  Fund&#146;s  Articles  of  Incorporation  or  Declaration  of Trust,  as
amended  and  supplemented,  the Fund&#146;s By-laws, as amended,  and applicable law, as
the Audit  Committee or the Board of Directors/Trustees deems necessary or appropriate. </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The  Audit
Committee  may  delegate  any  portion of its  authority,  including  the  authority  to
grant  preapprovals  of  audit  related  services  and  permitted  non-audit  services,
to a  subcomittee  of one or  more  members  of the  Audit  Committee  pursuant to
preapproval  policies and  procedures  established by the  Audit Committee;  provided,
however,  that the Audit Committee may not delegate  preapproval  of the  audit  required
by the  1934  Act.  Any  decision  of such  subcommittee of the Audit Committee to grant
preapprovals shall be presented to  the full Audit Committee at its next regularly
scheduled meeting. </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The function  of
the Audit Committee is oversight; it is the responsibility of Fund management  to
maintain  appropriate  systems  for  accounting  and  internal  control  over  financial
reporting,  and  the  responsibility  of  the  Fund&#146;s  independent  accountants to
plan and carry out a proper audit. Specifically,  Fund management  is  responsible  for:
(1) the  preparation,  presentation  and  integrity of the  Fund&#146;s financial
statements;  (2) the maintenance of appropriate  accounting and  financial reporting
principles and policies; and (3) the maintenance of internal  control  over  financial
reporting  and  other  procedures  designed  to assure  compliance  with  accounting
standards  and related laws and  regulations.  The  Fund&#146;s independent  accountants
are responsible for planning and carrying out an  audit consistent with applicable legal
and professional  standards and the terms  of their  engagement  letter.  Nothing in this
Audit Committee  Charter shall be  construed to reduce the  responsibilities  or
liabilities of the Fund&#146;s service  providers,  including  the Fund&#146;s
independent  accountants. </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although the Audit
Committee is expected to review  appropriately  the matters that come before it,  such
review of a Fund&#146;s  financial  statements by the Audit  Committee is not an  audit,
nor does the Committee&#146;s  review substitute for the  responsibilities  of  the Fund&#146;s
management for preparing,  or the Fund&#146;s independent  accountants for  auditing,
the  financial  statements.  Members of the Audit  Committee  are not  full-time
employees of the Fund and, in serving on the Audit Committee, are not,  and do not hold
themselves  out to be, acting as  accountants  or auditors.  As  such, it is not the duty
or responsibility of the Audit Committee or its members  to conduct  &#147;field  work&#148; or
other types of auditing  or  accounting  reviews or  procedures. </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In discharging
their duties, the members of the Audit Committee are  entitled to rely on information,
opinions,  reports,  or statements,  including  financial  statements and other financial
data, if prepared or presented by: (1)  one or more officers of the Fund whom the
Directors/Trustees  reasonably believe  to be reliable and competent in the matters
presented; (2) legal counsel, public  accountants,  or other persons as to matters the
Directors/Trustees  reasonably  believe are within the  person&#146;s  professional  or
expert  competence;  or (3) a  Board committee of which the  Directors/Trustees  are not
members. </font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>IV. Meetings</B></font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&lt;R&gt;The Audit Committee
      shall meet regularly with the Fund&#146;s independent accountants (outside
      the presence of Fund management) and Fund management and at least once annually
      with the representatives of Fund management responsible for the financial
      and accounting operations of the Fund. The Audit Committee shall hold special
      meetings at such times as the Audit Committee believes appropriate. Members
      of the Audit Committee may participate in a meeting of the Audit Committee
      by means of conference call or similar communications equipment by means
      of which all persons participating in such meeting can hear each other.
      &lt;/R&gt; </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">
V-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: 13; page: 13" -->



<p><table width=600><tr>
    <td><font size=2>&lt;R&gt;<B>V. Assistance from Fund Management; Authority
      to Engage Advisers; Funding </B>&lt;/R&gt;</font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The  appropriate
officers  of the Fund shall  provide  or  arrange  to provide  such  information,  data
and services as the Audit  Committee  may request.  The Audit  Committee  shall have the
power and  authority  to take all  action it  believes  necessary or appropriate to
discharge its responsibilities,  including the power  and authority to retain independent
counsel and other advisers.  The Fund shall  provide for  appropriate  funding,  as
determined  by the Audit  Committee as a  committee of the Board of  Directors/Trustees,
for payment of: (i) compensation  to the Fund&#146;s  independent  accountants or any
other accounting firm engaged for  the purpose of preparing or issuing an audit report or
performing  other audit,  review,  or attest  services  for the Fund,  (ii)  compensation
to any advisers  employed  by the Audit  Committee  under  this  Section  V, and  (iii)
ordinary  administrative expenses of the Audit Committee that are necessary or
appropriate  in carrying out its  responsibilities. </font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>Dated:  May 23, 2000 </B></font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>Revised:  March 19, 2001 </B></font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>Further Revised: October 29, 2002 </B></font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2><B>&lt;R&gt;Further Revised: November 21, 2003 &lt;/R&gt;</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">
V-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: 10; page: 10" -->



<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>

<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;&lt;R&gt;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 as it deems appropriate. Stockholders
      who wish to recommend a nominee should send nominations to the Secretary
      of the Fund that include biographical information and set forth the qualifications
      of the proposed nominee. The Secretary of the Fund will forward all nominations
      received to the Committee. &lt;/R&gt;</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: 14; page: 14" -->



<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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&lt;R&gt;Adopted: February
      18, 2004 &lt;/R&gt;</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;





<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 15; page: 15" -->



<p><table width=600><tr>
    <td  align=center><font size=2>&lt;R&gt;<B>STATEMENT OF ADDITIONAL INFORMATION
      </B></font></td>
  </tr></table>

<p><table width=600><tr><td  align=center><font size=2><B>MUNIYIELD INSURED  FUND, INC.
<BR>800 SCUDDERS MILL ROAD <BR>PLAINSBORO, NEW JERSEY 08543 </B></font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Statement of Additional
      Information is not a prospectus and should be read in conjunction with the
      Proxy Statement and Prospectus dated April 16, 2004 of MuniYield Insured
      Fund, Inc. (the &#147;Fund&#148;) and MuniInsured Fund, Inc. (&#147;MuniInsured&#148;),
      which has been filed with the Securities and Exchange Commission (the Commission&#148;)
      and can be obtained, without charge, by calling (609) 282-2800 or by writing
      to the Fund at 800 Scudders Mill Road, Plainsboro, New Jersey 08536. This
      Statement of Additional Information has been incorporated by reference into
      the Proxy Statement and Prospectus. </font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The  Commission
maintains a web site at  http://www.sec.gov  that contains the annual report of the Fund
and MuniInsured,  other material incorporated by reference herein, and other information
regarding  the Fund and MuniInsured. </font></td></tr></table>

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


<br>
<TABLE width="600">
  <TR VALIGN="TOP">
    <TD><font size="2">General Information </font></TD>
    <TD align="right"><font size="2">B-2</font></TD>
  </TR>
  <TR VALIGN="TOP">
    <TD><font size="2">Financial Statements</font></TD>
    <TD align="right"><font size="2">B-2</font></TD>
  </TR>
</TABLE>


<p><table width=600>
  <tr align="center">
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>The date of this Statement
      of Additional Information is April 16, 2004.</b> &lt;/R&gt;</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: 16; page: 16" -->




<p><table width=600><tr>
    <td  align=center><font size=2>&lt;R&gt;<B>GENERAL INFORMATION </B></font></td>
  </tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The  stockholders
of MuniInsured are being asked to  approve the acquisition of substantially  all of the
assets,  and the assumption  of substantially all of the liabilities, of MuniInsured by
the Fund, in exchange  solely for an equal  aggregate  value of shares of common stock of
the Fund plus  cash  in  lieu  of  fractional  shares  (the  &#147;Reorganization&#148;).
The  Fund is a  closed-end management investment company organized as a Maryland
corporation. An  Annual Meeting of the shareholders of MuniInsured to consider the
Reorganization  will be held at the offices of Fund Asset  Management,  L.P.,  800
Scudders Mill  Road, Plainsboro,  New Jersey, on Wednesday, May 19, 2004, at 9:00 a.m.,
Eastern  time. </font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For  detailed
information  about  the  Reorganization,  shareholders  of  MuniInsured  should  refer to
the  Proxy  Statement  and  Prospectus. </font></td></tr></table>

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

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In accordance with
Part B, Item 14(a), pro forma financial statements  reflecting consummation of the
Reorganization have not been prepared since as of  March 31, 2004, the net asset value of
MuniInsured did not exceed 10% of the net  asset  value  of the  Fund. </font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>MuniYield  Insured  Fund,  Inc. </B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Audited  financial
statements and accompanying notes the Fund for the fiscal year ended October 31,  2003
and the independent  auditor&#146;s report thereon,  dated November 24, 2003 are
incorporated  herein  by  reference  from  the  Company&#146;s  Annual  Report  to
shareholders,  which  accompanies  this  Statement  of  Additional  Information.</font></td></tr></table>

<p><table width=600><tr><td><font size=2><B>MuniInsured  Fund, Inc. </B></font></td></tr></table>

<p><table width=600><tr>
    <td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Audited financial statements
      and accompanying notes of MuniInsured for the fiscal year ended September
      30, 2003 and the independent auditor&#146;s report thereon, dated December
      18, 2003 are incorporated herein by reference from MuniInsured&#146;s Annual
      Report to shareholders, which accompanies this Statement of Additional Information.
      &lt;/R&gt; </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"> B-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;



<pre>




(BULL LOGO)
Merrill Lynch Investment Managers


www.mlim.ml.com


MuniYield Insured Fund, Inc.


Annual Report
October 31, 2003



MuniYield Insured Fund, Inc. seeks to provide shareholders 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.

This report, including the financial information herein, is
transmitted to shareholders of MuniYield Insured Fund, Inc. for
their information. It is not a prospectus. Past performance results
shown in this report should not be considered a representation of
future performance. The Fund has leveraged its Common Stock and
intends to remain leveraged by issuing Preferred Stock to provide
the Common Stock shareholders with a potentially higher rate of
return. Leverage creates risks for Common Stock shareholders,
including the likelihood of greater volatility of net asset value
and market price of shares of the Common Stock, and the risk that
fluctuations in the short-term dividend rates of the Preferred Stock
may affect the yield to Common Stock shareholders. Statements and
other information herein are as dated and are subject to change.



MuniYield Insured Fund, Inc.
Box 9011
Princeton, NJ
08543-9011




MuniYield Insured Fund, Inc.


The Benefits and Risks of Leveraging


MuniYield Insured Fund, Inc. utilizes leveraging to seek to enhance
the yield and net asset value of its Common Stock. However, these
objectives cannot be achieved in all interest rate environments. To
leverage, the Fund issues Preferred Stock, which pays dividends at
prevailing short-term interest rates, and invests the proceeds in
long-term municipal bonds. The interest earned on these investments,
net of dividends to Preferred Stock, is paid to Common Stock
shareholders in the form of dividends, and the value of these
portfolio holdings is reflected in the per share net asset value of
the Fund's Common Stock. However, in order to benefit Common Stock
shareholders, the yield curve must be positively sloped; that is,
short-term interest rates must be lower than long-term interest
rates. At the same time, a period of generally declining interest
rates will benefit Common Stock shareholders. If either of these
conditions change, then the risks of leveraging will begin to
outweigh the benefits.

To illustrate these concepts, assume a fund's Common Stock
capitalization of $100 million and the issuance of Preferred
Stock for an additional $50 million, creating a total value of
$150 million available for investment in long-term municipal bonds.
If prevailing short-term interest rates are approximately 3% and
long-term interest rates are approximately 6%, the yield curve has a
strongly positive slope. The fund pays dividends on the $50 million
of Preferred Stock based on the lower short-term interest rates. At
the same time, the fund's total portfolio of $150 million earns the
income based on long-term interest rates. Of course, increases in
short-term interest rates would reduce (and even eliminate) the
dividends of the Common Stock.

In this case, the dividends paid to Preferred Stock shareholders are
significantly lower than the income earned on the fund's long-term
investments, and therefore the Common Stock shareholders are the
beneficiaries of the incremental yield. However, if short-term
interest rates rise, narrowing the differential between short-term
and long-term interest rates, the incremental yield pickup on the
Common Stock will be reduced or eliminated completely. At the same
time, the market value of the fund's Common Stock (that is, its
price as listed on the New York Stock Exchange) may, as a result,
decline. Furthermore, if long-term interest rates rise, the Common
Stock's net asset value will reflect the full decline in the price
of the portfolio's investments, since the value of the fund's
Preferred Stock does not fluctuate. In addition to the decline in
net asset value, the market value of the fund's Common Stock may
also decline.

As a part of its investment strategy, the Fund may invest in certain
securities whose potential income return is inversely related to
changes in a floating interest rate ("inverse float-ers"). In
general, income on inverse floaters will decrease when short-term
interest rates increase and increase when short-term interest rates
decrease. Investments in inverse floaters may be characterized as
derivative securities and may subject the Fund to the risks of
reduced or eliminated interest payments and losses of invested
principal. In addition, inverse floaters have the effect of
providing investment leverage and, as a result, the market value of
such securities will generally be more volatile than that of fixed-
rate, tax-exempt securities. To the extent the Fund invests in
inverse floaters, the market value of the Fund's portfolio and the
net asset value of the Fund's shares may also be more volatile than
if the Fund did not invest in such securities. As of October 31,
2003, the percentage of the Fund's total net assets invested in
inverse floaters was 15.79%.


Swap Agreements


The Fund may also invest in swap agreements, which are over-the-
counter contracts in which one party agrees to make periodic
payments based on the change in market value of a specified bond,
basket of bonds, or index in return for periodic payments based on a
fixed or variable interest rate or the change in market value of a
different bond, basket of bonds or index. Swap agreements may be
used to obtain exposure to a bond or market without owning or taking
physical custody of securities.



MUNIYIELD INSURED FUND, INC., OCTOBER 31, 2003



A Letter From the President


Dear Shareholder

As 2003 draws to a close, it seems appropriate to reflect on what
has been a meaningful year in many respects. We saw the beginning
and the end of all-out war in Iraq, equity market uncertainty turned
to strength and sub par gross domestic product growth of 1.4% in the
first quarter of 2003 grew to an extraordinary 8.2% in the third
quarter. Amid the good news, fixed income investments, which had
become the asset class of choice during the preceding three-year
equity market decline, faced new challenges.

During 2003, municipal bond yields rose and fell in reaction to
geopolitical events, equity market performance, economic activity
and employment figures. By the end of October, long-term municipal
revenue bond yields were slightly higher than they were one year
earlier, at 5.24% as measured by the Bond Buyer Revenue Bond Index.
With many state deficits at record levels, municipalities issued
nearly $400 billion in new long-term tax-exempt bonds during the
12-month period ended October 31, 2003. The availability of bonds,
together with attractive yield ratios relative to U.S. Treasury
issues, made municipal bonds a popular fixed income investment
alternative.

Throughout the year, our portfolio managers continued to work
diligently to deliver on our commitment to provide superior
performance within reasonable expectations for risk and return.
This included striving to outperform our peers and the market
indexes. With that said, remember that the advice and guidance of a
skilled financial advisor often can mean the difference between
successful and unsuccessful investing. A financial professional can
help you choose those investments that will best serve you as you
plan for your financial future.

Finally, I am proud to premiere a new look to our shareholder
communications. Our portfolio manager commentaries have been trimmed
and organized in such a way that you can get the information you
need at a glance, in plain language. Today's markets are confusing
enough. We want to help you put it all in perspective. The report's
new size also allows us certain mailing efficiencies. Any cost
savings in production or postage are passed on to the Fund and,
ultimately, to Fund shareholders.

We thank you for trusting Merrill Lynch Investment Managers with
your investment assets, and we look forward to serving you in the
months and years ahead.


Sincerely,



(Terry K. Glenn)
Terry K. Glenn
President and Director



MUNIYIELD INSURED FUND, INC., OCTOBER 31, 2003



A Discussion With Your Fund's Portfolio Manager


We maintained a conservative stance throughout the period and
focused on enhancing yield and preserving the Fund's net asset value
in a highly volatile interest rate environment.


Describe the market environment relative to municipal bonds during
the fiscal year.

At the end of October, long-term tax-exempt bond yields were
90% - 95% of comparable U.S. Treasury securities, substantially
exceeding their historical average of 85% - 88%. Considering their
tax-free status, this made long-term municipal bonds an attractive
investment alternative during the past 12 months.

Long-term U.S. Treasury bond yields declined throughout most of the
first seven months of the fiscal year, while bond prices--which move
in the opposite direction of yields--rose in response to weak equity
markets, concerns about a growing conflict in Iraq and continued sub
par U.S. economic growth. The Federal Reserve Board continued to
lower short-term interest rates to stimulate business and consumer
economic activity. Bond yields reversed course in July and August,
rising sharply as economic conditions began to improve and as most
analysts agreed the Federal Reserve Board had finished lowering
interest rates. In mid-August, U.S. Treasury bond yields reached
5.45%, their highest level during the period, before again moving
lower for the remainder of the fiscal year. At the end of the
12-month period, long-term U.S. Treasury bond yields were 5.13%,
15 basis points (.15%) higher than a year earlier. The relatively
modest yield increase year-over-year masks the considerable month-to-
month volatility in interest rates during the period.

Long-term tax-exempt bond yields also rose from year-ago levels,
although to a lesser extent than U.S. Treasury bonds. Yield
movements were less volatile than those experienced by U.S. Treasury
issues, because municipal bond prices typically are less sensitive
to short-term economic and geopolitical pressures. By the end of
October, long-term municipal revenue bond yields stood at 5.24%, a
small increase compared to the previous year. Yields for long-term
Aaa-rated tax-exempt bonds (the highest rated) declined 10 basis
points during the past year. The decline largely reflected
investors' growing demand for high-quality bonds, which provided
valuable stability in an uncertain market.

The municipal market's outperformance of the U.S. Treasury market
was especially impressive given the dramatic increase in new bond
issuance during the fiscal year. State and local governments took
advantage of historically low interest rates to finance existing
infrastructure needs and refinance outstanding high-interest-rate
debt. During the past 12 months, municipalities issued nearly
$400 billion in new securities, an increase of more than 12%
compared to last year's issuance. More recently, however, new
municipal bond issuance slowed as tax-exempt bond yields rose,
making borrowing more expensive. Less than $90 billion in long-term
tax-exempt bonds was underwritten during the period's last three
months, a decline of nearly 10% versus the same three months of
2002. This decline in supply helped support the tax-exempt market's
recent performance.


How did the Fund perform during the fiscal year in light of the
existing market conditions?

For the year ended October 31, 2003, the Common Stock of MuniYield
Insured Fund, Inc. had a net annualized yield of 6.17%, based on a
year-end per share net asset value of $15.36 and $.948 per share
income dividends. Over the same period, the total investment return
on the Fund's Common Stock was +8.18%, based on a change in per
share net asset value from $15.15 to $15.36, and assuming
reinvestment of $.948 per share ordinary income dividends.

For the six-month period ended October 31, 2003, the total
investment return on the Fund's Common Stock was +1.88%, based on a
change in per share net asset value from $15.57 to $15.36, and
assuming reinvestment of $.474 per share ordinary income dividends.

For the six-month period ended October 31, 2003, the Fund's Auction
Market Preferred Stock had average yields of: 1.03% for Series A;
1.03% for Series B; 1.02% for Series C; .92% for Series D; .84% for
Series E; .74% for Series F; and .92% for Series G.



MUNIYIELD INSURED FUND, INC., OCTOBER 31, 2003



For a description of the Fund's total investment return based on a
change in the per share market value of the Fund's Common Stock (as
measured by the trading price of the Fund's shares on the New York
Stock Exchange), and assuming reinvestment of dividends, please
refer to the Financial Highlights section of the Financial
Statements included in this report. As a closed-end fund, the Fund's
shares may trade in the secondary market at a premium or discount to
the Fund's net asset value. As a result, total investment returns
based on changes in the market value of the Fund's Common Stock can
vary significantly from total investment return based on changes in
the Fund's net asset value.

For the year ended October 31, 2003, the Fund's return, based on net
asset value, outperformed its comparable Lipper category of Insured
Municipal Debt Funds (Leveraged), which had an average return of
+6.72%. We focused on enhancing the Fund's dividend yield and
preserving net asset value in what was a period of elevated
volatility. Over the past 12 months, 30-year municipal bond yields
moved 53 basis points, yet ended the period at virtually the same
level as one year ago.


What changes were made to the portfolio during the period?

Our dominant investment strategy was to purchase premium-coupon
bonds maturing in the 20-year-25-year maturity range, with the focus
on enhancing the Fund's dividend yield. We also increased the
duration of the Fund by replacing our lower-yielding, shorter-
maturity derivative position with longer-maturity derivatives that
offered a higher yield. To offset the price volatility associated
with derivative securities, we made use of hedge positions. We also
added some 25-year-30-year bonds to the portfolio to take advantage
of the opportunities that accompanied the market volatility. The
steepness of the municipal yield curve during the period made it
advantageous to extend maturities and capture the incremental yield
the longer maturities had to offer. Our view was that these bonds
offered the best balance of risk and reward at the time of purchase.

In terms of leverage, the Fund's borrowing costs remained between
..75% and 1.25% during the fiscal year. These attractive funding
levels, in combination with a steep tax-exempt yield curve, have
generated a significant income benefit to the Fund's Common Stock
shareholders. Further declines in the Fund's borrowing costs would
require significant easing of monetary policy by the Federal Reserve
Board. While such action is not expected, neither is an imminent
increase in short-term interest rates. We expect short-term
borrowing costs to remain near current attractive levels for the
coming months. However, should the spread between short-term and
long-term interest rates narrow, the benefits of leverage will
decline, and as a result, reduce the yield on the Fund's Common
Stock. (For a more complete explanation of the benefits and risks of
leveraging, see page 2 of this report to shareholders.)


How would you characterize the portfolio's position at the close of
the period?

Given the expected pickup in economic growth, which could be greater
than initially anticipated, and the fact that the U.S. Treasury is
expected to bring more than $100 billion in new financing in the
fourth quarter, we have become more cautious toward the market. We
anticipate that interest rates will move higher in the near term.
Amidst these conditions, we have shifted to a more defensive stance.
This involved raising our cash levels and increasing our hedge
position to bring the duration of the Fund to a lower level. We
believe that investment opportunities will present themselves at the
end of the calendar year as municipalities rush to market with new
transactions before the conclusion of their fiscal year.

We believe the Fund's dual strategy of seeking to enhance portfolio
yield and reduce net asset value volatility remains a prudent
approach in the near term as we continue to monitor economic
conditions.


William R. Bock
Vice President and Portfolio Manager


November 12, 2003



MUNIYIELD INSURED FUND, INC., OCTOBER 31, 2003



Schedule of Investments                                                                                      (In Thousands)

                 S&P        Moody's   Face
State         Ratings+++  Ratings+++ Amount  Municipal Bonds                                                        Value

Alaska--1.7%      AAA      Aaa      $ 3,695  Alaska Energy Authority, Power Revenue Refunding Bonds
                                             (Bradley Lake), Fourth Series, 6% due 7/01/2018 (g)                 $    4,303
                  AAA      Aaa        6,185  Alaska State Housing Finance Corporation, Mortgage Revenue
                                             Bonds, AMT, Series C, 6% due 12/01/2031 (i)                              6,433
                  AAA      Aaa        5,145  Alaska State Housing Finance Corporation, Revenue Refunding Bonds,
                                             RITR, Series 2, 10.27% due 12/01/2024 (d)(i)(k)(m)                       5,509

Arizona--0.2%     NR*      Aaa        2,000  Arizona Tourism and Sports Authority, Tax Revenue Bonds
                                             (Multi-Purpose Stadium Facility), Series A, 5.375% due
                                             7/01/2023 (i)                                                            2,121

California--      AAA      Aaa        8,300  California Infrastructure and Economic Development Bank, Bay
32.6%                                        Area Toll Bridges Revenue Bonds, First Lien, Series A, 5% due
                                             7/01/2025 (c)                                                            8,401
                  AAA      Aaa       16,500  California Pollution Control Financing Authority, PCR, Refunding
                                             (Pacific Gas & Electric), AMT, Series A, 5.35% due 12/01/2016 (i)       17,623
                                             California State Department of Water Resources, Power Supply
                                             Revenue Bonds, Series A:
                  AAA      Aaa       10,000     5.25% due 5/01/2020 (i)                                              10,670
                  BBB+     A3         3,675     5.375% due 5/01/2021                                                  3,785
                  AAA      Aaa       10,010     5.375% due 5/01/2022 (i)                                             10,586
                  AAA      Aaa       10,000  California State, GO, Refunding, 6% due 4/01/2017 (a)                   11,832
                  BBB      Aaa        5,000  California State, GO, Refunding, RIB, Series 471X, 9.67% due
                                             9/01/2024 (i)(k)                                                         5,480
                                             California State, Various Purpose, GO:
                  BBB      A3        10,000     5.25% due 11/01/2029                                                  9,888
                  BBB      A3        10,000     5.50% due 11/01/2033                                                 10,146
                  A-       A3         7,740  California Statewide Communities Development Authority, Health
                                             Facility Revenue Bonds (Memorial Health Services), Series A, 6%
                                             due 10/01/2023                                                           8,184
                  NR*      Aaa        5,000  Foothill-De Anza, California, Community College District, GO, RIB,
                                             Series 473X, 10.72% due 8/01/2030 (i)(k)                                 6,950
                  AAA      Aaa        4,000  Garden Grove, California, Community Development Agency, Tax
                                             Allocation Refunding Bonds (Garden Grove Community Project), 5%
                                             due 10/01/2025 (a)                                                       4,040
                                             Golden State Tobacco Securitization Corporation of California,
                                             Tobacco Settlement Revenue Bonds:
                  BBB      Baa2       3,000     Series A-2, 7.90% due 6/01/2042                                       3,087
                  BBB      Baa2       2,200     Series A-3, 7.875% due 6/01/2042                                      2,260
                  BBB      Baa2      11,100     Series A-4, 7.80% due 6/01/2042                                      11,346
                  BBB-     Baa1      27,500     Series B, 5.50% due 6/01/2033                                        26,640
                  AAA      Aaa       34,525     Series B, 5% due 6/01/2038 (a)                                       33,965
                  AAA      NR*       11,245  Los Angeles, California, Community College District, DRIVERS,
                                             Series 216, 9.645% due 8/01/2018 (i)(k)                                 13,605
                  AAA      Aaa        4,000  Los Angeles, California, Harbor Department Revenue Bonds, RITR,
                                             AMT, Series RI-7, 10.945% due 11/01/2026 (i)(k)                          4,954
                  AAA      NR*        6,265  Los Angeles, California, Unified School District, GO, DRIVERS,
                                             Series 261, 9.44% due 7/01/2022 (c)(k)                                   7,056
                  AAA      Aaa        4,000  Los Angeles, California, Wastewater System Revenue Refunding
                                             Bonds, Series A, 6% due 6/01/2021 (c)                                    4,707
                                             Los Angeles, California, Water and Power Revenue Bonds
                                             (Power System), Series B (g):
                  AAA      Aaa        3,365     5% due 7/01/2023                                                      3,435
                  AAA      Aaa        6,000     5% due 7/01/2025                                                      6,073
                  AAA      Aaa        3,315  North Orange County, California, Community College District, GO,
                                             Series A, 5% due 8/01/2023 (i)                                           3,384
                  AAA      Aaa       14,000  Orange County, California, Sanitation District, COP, 5% due
                                             2/01/2033 (c)                                                           14,053
                  AAA      Aaa        9,465  Port Oakland, California, Revenue Refunding Bonds, AMT,
                                             Series L, 5.375% due 11/01/2027 (c)                                      9,724
                  NR*      Aaa        6,000  Port Oakland, California, Trust Receipts, Revenue Bonds, AMT,
                                             Class R, Series K, 10.099% due 11/01/2021 (c)(k)                         6,671



Portfolio Abbreviations


To simplify the listings of MuniYield Insured Fund, Inc.'s portfolio
holdings in the Schedule of Investments, we have abbreviated the
names of many of the securities according to the list at right.


AMT        Alternative Minimum Tax (subject to)
COP        Certificates of Participation
DRIVERS    Derivative Inverse Tax-Exempt Receipts
EDA        Economic Development Authority
GO         General Obligation Bonds
HDA        Housing Development Authority
HFA        Housing Finance Agency
IDA        Industrial Development Authority
M/F        Multi-Family
PCR        Pollution Control Revenue Bonds
RIB        Residual Interest Bonds
RITR       Residual Interest Trust Receipts
S/F        Single-Family
VRDN       Variable Rate Demand Notes



MUNIYIELD INSURED FUND, INC., OCTOBER 31, 2003



Schedule of Investments (continued)                                                                          (In Thousands)

                 S&P        Moody's   Face
State         Ratings+++  Ratings+++ Amount  Municipal Bonds                                                        Value
California                                   Sacramento, California, Municipal Utility District, Electric
(concluded)                                  Revenue Bonds, Series I (I):
                  AAA      Aaa      $   220     6% due 1/01/2004 (j)                                             $      226
                  AAA      Aaa          445     6% due 1/01/2024                                                        457
                                             San Diego, California, Unified School District, Election 1998, GO:
                  AAA      Aaa        3,945     Series D, 5.25% due 7/01/2022 (c)                                     4,170
                  AAA      Aaa        1,280     Series D, 5.25% due 7/01/2024 (c)                                     1,338
                  AAA      Aaa        1,100     Series E, 5% due 7/01/2026 (g)                                        1,112
                  AAA      Aaa        2,170     Series E, 5% due 7/01/2028 (g)                                        2,190
                  AAA      Aaa        6,000  San Francisco, California, City and County Airport Commission,
                                             International Airport Revenue Bonds, AMT, Second Series, Issue 6,
                                             6.60% due 5/01/2024 (a)                                                  6,277
                  AAA      Aaa        5,000  San Francisco, California, City and County, COP (San Francisco
                                             Courthouse Project), 5.875% due 4/01/2021 (g)                            5,406
                  AAA      Aaa        7,660  San Francisco, California, City and County Public Utilities
                                             Commission, Water Revenue Refunding Bonds, Series A, 5% due
                                             11/01/2027 (i)                                                           7,732
                  AAA      Aaa        6,895  San Jose, California, Redevelopment Agency, Tax Allocation
                                             Refunding Bonds (Merged Area Redevelopment Project), 5.60% due
                                             8/01/2019 (i)                                                            7,636
                  AAA      Aaa        3,000  Santa Clara, California, Subordinated Electric Revenue Bonds,
                                             Series A, 5% due 7/01/2025 (i)                                           3,037
                  AAA      Aaa        3,000  Santa Rosa, California, Wastewater Revenue Refunding Bonds,
                                             Series A, 5.25% due 9/01/2016 (c)                                        3,326
                  AAA      Aaa        3,750  University of California General Revenue Refunding Bonds,
                                             Series A, 5% due 5/15/2024 (a)                                           3,804
                                             West Basin, California, Municipal Water District Revenue Refunding
                                             Bonds, COP, Series A (I):
                  AAA      Aaa        2,500     5% due 8/01/2024                                                      2,536
                  AAA      Aaa        3,000     5% due 8/01/2027                                                      3,030

Colorado--0.8%    AA       NR*        3,410  Boulder County, Colorado, Hospital Development Revenue Bonds
                                             (Longmont United Hospital Project), 6% due 12/01/2030 (f)                3,720
                  A1       VMIG1++    4,000  Moffat County, Colorado, PCR, Refunding (Pacificorp Projects),
                                             VRDN, 1.10% due 5/01/2013 (a)(h)                                         4,000

Connecticut--     AAA      Aaa        5,730  Connecticut State HFA Revenue Bonds (Housing Mortgage Finance
0.6%                                         Program), AMT, Sub-Series A-2, 5.50% due 11/15/2022                      5,948

District of       AAA      Aaa        5,000  Metropolitan Washington, D.C. Airports Authority, Airport System
Columbia--0.5%                               Revenue Refunding Bonds, AMT, Series A, 5% due 10/01/2033 (c)            4,961

Florida--3.0%     NR*      Aaa        3,500  Escambia County, Florida, Health Facilities Authority, Health
                                             Facility Revenue Bonds (Florida Health Care Facility Loan), 5.95%
                                             due 7/01/2020 (a)                                                        3,701
                  AAA      Aaa       10,750  Miami-Dade County, Florida, Aviation Revenue Refunding Bonds (Miami
                                             International Airport), AMT, 5.375% due 10/01/2025 (c)                  11,076
                                             Orange County, Florida, Health Facilities Authority, Hospital
                                             Revenue Bonds:
                  A        A3         5,000     (Adventist Health System), 5.625% due 11/15/2032                      5,072
                  A-       A2         2,000     (Orlando Regional Healthcare), 5.75% due 12/01/2032                   2,041
                                             Palm Coast, Florida, Utility System Revenue Bonds (I):
                  AAA      Aaa        1,000     5% due 10/01/2023                                                     1,020
                  AAA      Aaa        1,000     5% due 10/01/2024                                                     1,016
                  AAA      Aaa        5,000     5% due 10/01/2033                                                     5,047

Georgia--0.7%     AAA      Aaa        6,765  Georgia Municipal Electric Authority, Power Revenue Refunding Bonds,
                                             Series EE, 6.40% due 1/01/2023 (a)                                       6,952

Hawaii--1.6%      AAA      Aaa        2,000  Hawaii State, GO, Series CX, 5.50% due 2/01/2021 (g)                     2,154
                  AAA      Aaa       12,845  Honolulu, Hawaii, City and County GO, Refunding, Series A, 5.25%
                                             due 3/01/2028 (i)                                                       13,273

Illinois--10.9%   AAA      Aaa       10,000  Chicago, Illinois, GO, Series C, 5% due 1/01/2035 (i)                    9,973
                  AAA      Aaa        2,350  Chicago, Illinois, Midway Airport Revenue Bonds, AMT, Series A,
                                             6.25% due 1/01/2024 (i)                                                  2,416
                  AAA      Aaa       10,000  Chicago, Illinois, O'Hare International Airport, General Airport
                                             Revenue Bonds, Third Lien, AMT, Series B-2, 5.25% due 1/01/2027 (i)     10,165
                  AAA      Aaa       13,400  Chicago, Illinois, O'Hare International Airport, General Airport
                                             Revenue Refunding Bonds, Third Lien, AMT, Series C-2, 5.25% due
                                             1/01/2030 (g)                                                           13,599
                                             Chicago, Illinois, O'Hare International Airport Revenue Bonds,
                                             DRIVERS, AMT (k):
                  AAA      NR*        5,790     Series 212, 10.331% due 1/01/2016 (a)                                 6,664
                  AAA      NR*       13,115     Series 368, 10.57% due 7/01/2011 (i)                                 15,600
                  AAA      NR*        7,500     Series 369, 10.58% due 7/01/2011 (e)                                  8,783



MUNIYIELD INSURED FUND, INC., OCTOBER 31, 2003



Schedule of Investments (continued)                                                                          (In Thousands)

                 S&P        Moody's   Face
State         Ratings+++  Ratings+++ Amount  Municipal Bonds                                                        Value

Illinois          AAA      Aaa      $ 4,775  Chicago, Illinois, Public Building Commission, Building Revenue
(concluded)                                  Bonds (Chicago Transit Authority), 5.25% due 3/01/2023 (a)          $    4,968
                  AAA      Aaa        2,000  Chicago, Illinois, Water Revenue Bonds, Senior Lien, 5.50% due
                                             11/01/2018 (a)                                                           2,196
                  A1+      VMIG1++    6,500  Illinois Health Facilities Authority, Revenue Refunding Bonds
                                             (Resurrection Health Care), VRDN, Series A, 1.15% due
                                             5/15/2029 (g)(h)                                                         6,500
                  AAA      Aaa       10,000  Illinois State, GO, First Series, 5.50% due 4/01/2016 (g)               11,010
                  NR*      Aa3        2,000  Illinois State Sales Tax Revenue Bonds, 6.125% due 6/15/2016             2,307
                  NR*      Aaa        6,035  McLean and Woodford Counties, Illinois, Community Unit, School
                                             District Number 005, GO, Refunding, 6.375% due 12/01/2016 (g)            7,135
                  AAA      NR*        2,400  Metropolitan Pier and Exposition Authority, Illinois, Dedicated
                                             State Tax Revenue Refunding Bonds, DRIVERS, Series 269, 10.13%
                                             due 6/15/2023 (i)(k)                                                     2,875

Indiana--2.3%     AAA      Aaa        2,400  Indiana State Vocational Technical College, Building Facilities
                                             Revenue Refunding Bonds (Student Fee), Series D, 6.50% due
                                             1/01/2005 (a)(j)                                                         2,595
                  AAA      Aaa       11,805  Indiana Transportation Finance Authority, Highway Revenue Bonds,
                                             Series A, 5% due 6/01/2024 (g)                                          11,921
                  AAA      Aaa        7,000  Indianapolis, Indiana, Local Public Improvement Bond Bank Revenue
                                             Bonds (Waterworks Project), Series A, 5.125% due 7/01/2027 (i)           7,114

Kansas--2.5%      AAA      Aaa       20,250  Burlington, Kansas, PCR, Refunding (Kansas Gas and Electric
                                             Company Project), 7% due 6/01/2031 (i)                                  21,164
                  A-       NR*        2,900  University of Kansas, Hospital Authority, Health Facilities
                                             Revenue Bonds (Kansas University Health System), 5.625% due
                                             9/01/2032                                                                2,968

Kentucky--0.4%    A1       VMIG1++    4,025  Kentucky Economic Development Finance Authority, Hospital
                                             Facilities Revenue Refunding Bonds (Baptist Healthcare), VRDN,
                                             Series C, 1.10% due 8/15/2031 (h)(i)                                     4,025

Louisiana--2.0%   AAA      Aaa        2,250  Louisiana Local Government, Environmental Facilities, Community
                                             Development Authority Revenue Bonds (Capital Projects and Equipment
                                             Acquisition), Series A, 6.30% due 7/01/2030 (a)                          2,666
                  AAA      Aaa       15,700  New Orleans, Louisiana, Ernest N. Morial Exhibit Hall Authority,
                                             Special Tax, Sub-Series A, 5.25% due 7/15/2028 (a)                      16,223

Maryland--0.3%    NR*      Aa2        2,085  Maryland State Community Development Administration, M/F Housing
                                             Revenue Refunding Bonds (Department of Housing and Community
                                             Development), Series C, 6.65% due 5/15/2025 (d)(l)                       2,140
                  NR*      Aa2          695  Maryland State Community Development Administration, S/F Revenue
                                             Refunding Bonds (Department of Housing and Community Development),
                                             AMT, Second Series, 6.55% due 4/01/2026                                    720

Massachusetts--   AA-      Aaa        5,000  Massachusetts State, GO, RIB, Series 699X, 9.72% due 3/01/2020 (g)(k)    6,302
0.9%              AAA      Aaa        2,500  Massachusetts State, HFA, Housing Development Revenue Refunding
                                             Bonds, Series B, 5.40% due 12/01/2028 (i)                                2,563

Michigan--2.2%                               Michigan State Strategic Fund, Limited Obligation Revenue Refunding
                                             Bonds (Detroit Edison) Company Project), AMT (e):
                  AAA      Aaa        8,000     Series A, 5.50% due 6/01/2030                                         8,262
                  AAA      Aaa        5,000     Series C, 5.65% due 9/01/2029                                         5,205
                  NR*      VMIG1++    2,200  Michigan State Strategic Fund, PCR, Refunding (Consumers Power
                                             Project), VRDN, 1.10% due 4/15/2018 (a)(h)                               2,200
                  AAA      Aaa        5,000  Monroe County, Michigan, PCR (Detroit Edison Company Project),
                                             AMT, Series CC, 6.55% due 6/01/2024 (i)                                  5,122

Minnesota--2.5%                              Minneapolis and Saint Paul, Minnesota, Metropolitan Airports
                                             Commission, Airport Revenue Bonds (c):
                  AAA      Aaa        6,275     AMT, Series B, 6% due 1/01/2018                                       6,807
                  AAA      Aaa       10,000     Series A, 5.90% due 1/01/2029                                        10,996
                  AAA      Aaa        2,500     Sub-Series C, 5.50% due 1/01/2016                                     2,761
                  AAA      Aaa        2,500     Sub-Series C, 5.50% due 1/01/2017                                     2,749
                  AA+      Aa1          855  Minnesota State HFA, S/F Mortgage Revenue Bonds, AMT, Series L,
                                             6.70% due 7/01/2020                                                        874

Missouri--0.3%    AAA      Aaa        2,800  Saint Louis, Missouri, Airport Revenue Bonds (Airport Development
                                             Program), Series A, 5.625% due 7/01/2019 (i)                             3,098

Nevada--9.2%                                 Clark County, Neveda, School District, GO:
                  AAA      Aaa       15,000     6% due 6/15/2006 (c)(j)                                              16,834
                  AAA      Aaa       10,830     Series A, 5.50% due 6/15/2018 (i)                                    11,932
                  AAA      Aaa        5,000  Humboldt County, Nevada, PCR, Refunding (Sierra Pacific Project),
                                             6.55% due 10/01/2013 (a)                                                 5,217
                  AAA      Aaa        3,000  Las Vegas New Convention and Visitors Authority Revenue Bonds,
                                             6% due 7/01/2019 (a)                                                     3,419
                  AAA      Aaa       20,375  Nevada State, Nevada Municipal Bond Bank, GO, Series A, 5.50%
                                             due 11/01/2025 (c)                                                      21,529
                  AAA      Aaa        3,130  Reno, Nevada, Capital Improvement Revenue Bonds, 5.50% due
                                             6/01/2019 (c)                                                            3,392



MUNIYIELD INSURED FUND, INC., OCTOBER 31, 2003



Schedule of Investments (continued)                                                                          (In Thousands)

                 S&P        Moody's   Face
State         Ratings+++  Ratings+++ Amount  Municipal Bonds                                                        Value

Nevada                                       Washoe County, Nevada, Gas Facilities Revenue Bonds (Sierra
(concluded)                                  Pacific Power Company), AMT:
                  AAA      Aaa      $15,000     6.65% due 12/01/2017 (a)                                         $   15,293
                  AAA      Aaa        5,000     6.55% due 9/01/2020 (i)                                               5,206
                  AAA      Aaa        5,000  Washoe County, Nevada, Water Facility Revenue Bonds (Sierra
                                             Pacific Power Company), AMT, 6.65% due 6/01/2017 (i)                     5,230

New Hampshire--   BBB+     Baa1       2,900  New Hampshire Health and Education Facilities Authority, Revenue
0.3%                                         Refunding Bonds (Elliot Hospital), Series B, 5.60% due 10/01/2022        2,880

New Jersey--      AAA      Aaa        6,600  New Jersey EDA, Water Facilities Revenue Refunding Bonds (American
2.1%                                         Water), AMT, Series B, 5.125% due 4/01/2022 (a)                          6,715
                  NR*      Aaa        8,000  Port Authority of New York and New Jersey, Special Obligation
                                             Revenue Bonds (JFK International Air Terminal LLC), RIB, AMT,
                                             Series 353, 11.143% due 12/01/2014 (i)(k)                               10,167
                  BBB      Baa2       3,380  Tobacco Settlement Financing Corporation of New Jersey,
                                             Asset-Backed Revenue Refunding Bonds, 6% due 6/01/2037                   2,768

New Mexico--0.4%  NR*      A2         1,635  New Mexico Educational Assistance Foundation, Student Loan
                                             Revenue Refunding Bonds (Student Loan Program), AMT, First
                                             Sub-Series A-2, 6.65% due 11/01/2025                                     1,637
                  AAA      NR*        1,520  New Mexico Mortgage Finance Authority, S/F Mortgage Revenue Bonds,
                                             AMT, Series C-2, 6.95% due 9/01/2031 (l)(m)                              1,642

New York--7.9%    AAA      Aaa       12,500  Metropolitan Transportation Authority, New York, Commuter
                                             Facilities Revenue Refunding Bonds, Series B, 5.125% due
                                             7/01/2024 (a)(b)                                                        12,945
                  AAA      Aaa        8,740  Metropolitan Transportation Authority, New York, Transit
                                             Facilities Revenue Refunding Bonds, Series B, 4.75% due
                                             7/01/2026 (b)(c)                                                         8,739
                  AAA      Aaa       25,830  New York City, New York, City Municipal Water Finance Authority,
                                             Water and Sewer System Revenue Bonds, RITR, Series FR-6, 9.995%
                                             due 6/15/2026 (i)(k)                                                    30,921
                  A        Aaa        5,920  New York City, New York, GO, RIB, Series 394, 10.472% due
                                             8/01/2016 (i)(k)                                                         7,649
                  A        A2         5,000  New York City, New York, GO, Series J, 5.50% due 6/01/2020               5,321
                  AAA      Aaa       10,000  Triborough Bridge and Tunnel Authority, New York, Revenue
                                             Refunding Bonds, 5% due 11/15/2032 (i)                                  10,079

North Dakota--    AAA      Aaa        2,500  Grand Forks, North Dakota, Health Care Facilities Revenue Bonds
0.7%                                         (United Hospital Obligated Group), 6.25% due 12/01/2024 (i)              2,684
                  NR*      Aa2        4,070  North Dakota State Housing Finance Agency, Home Mortgage Revenue
                                             Refunding Bonds (Housing Finance Program), AMT, Series A, 6.40%
                                             due 7/01/2020                                                            4,305

Ohio--4.4%                                   Cincinnati, Ohio, City School District, Classroom Facilities
                                             Construction and Improvement, GO (g):
                  AAA      Aaa       11,000     5% due 12/01/2024                                                    11,174
                  AAA      Aaa        8,300     5% due 12/01/2031                                                     8,372
                  AAA      Aaa       16,975  Franklin County, Ohio, Hospital Revenue Refunding Bonds (OhioHealth
                                             Corporation), Series C, 5% due 5/15/2033 (i)                            17,128
                  AAA      Aaa        5,000  Plain, Ohio, Local School District, GO, 5% due 12/01/2030 (c)            5,057

Oklahoma--2.0%                               Oklahoma State Industries Authority, Revenue Refunding Bonds (I):
                  AAA      Aaa       15,000     (Health System--Obligation Group), Series A, 5.75% due 8/15/2029     16,008
                  A1+      VMIG1++    3,300     (Integris Baptist), VRDN, Series B, 1.10% due 8/15/2029 (h)           3,300

Oregon--2.3%                                 Multnomah-Clackamas Counties, Oregon, Gresham-Barlo School
                                             District Number 10JT, GO (g):
                  AAA      Aaa        2,625     5.50% due 6/15/2016                                                   2,918
                  AAA      Aaa        2,525     5.50% due 6/15/2017                                                   2,794
                  AAA      Aaa        3,035     5.50% due 6/15/2018                                                   3,344
                  AAA      Aaa        3,140  Oregon State Department of Administrative Services, COP, Series A,
                                             6.25% due 5/01/2010 (a)(j)                                               3,771
                  NR*      Aaa        7,500  Portland, Oregon, Sewer System Revenue Bonds, RIB, Series 386,
                                             10.09% due 8/01/2020 (c)(k)                                              9,326

Pennsylvania--                               Pennsylvania State Public School Building Authority, School Lease
3.7%                                         Revenue Bonds (The School District of Philadelphia Project) (g):
                  AAA      Aaa        3,650     5% due 6/01/2029                                                      3,680
                  AAA      Aaa       10,000     5% due 6/01/2033                                                     10,060
                  AAA      Aaa       10,000  Pennsylvania State Turnpike Commission, Oil Franchise Tax Revenue
                                             Bonds, Sub-Series B, 5% due 12/01/2031 (i)                              10,086
                  AAA      Aaa        5,175  Philadelphia, Pennsylvania, School District, GO, Series B, 5.625%
                                             due 8/01/2021 (c)                                                        5,647
                  A-       NR*        5,000  Sayre, Pennsylvania, Health Care Facilities Authority Revenue
                                             Bonds (Guthrie Health Issue), Series B, 1% due 12/01/2031                5,440


MUNIYIELD INSURED FUND, INC., OCTOBER 31, 2003


Schedule of Investments (continued)                                                                          (In Thousands)

                 S&P        Moody's   Face
State         Ratings+++  Ratings+++ Amount  Municipal Bonds                                                        Value

Rhode Island--    BBB      Baa2     $ 6,940  Tobacco Settlement Financing Corporation of Rhode Island,
0.6%                                         Revenue Bonds, Series A, 6.25% due 6/01/2042                        $    5,813

South Carolina--  NR*      A1         4,200  Spartanburg County, South Carolina, Solid Waste Disposal
0.5%                                         Facilities Revenue Bonds (BMW Project), AMT, 7.55% due 11/01/2024        4,512

Tennessee--4.6%   NR*      VMIG1++   13,300  Blount County, Tennessee, Public Building Authority, Local
                                             Government Public Improvement Revenue Bonds, VRDN, Series A3A,
                                             1.14% due 6/01/2026 (a)(h)                                              13,300
                                             Sevier County, Tennessee, Public Building Authority Revenue
                                             Bonds, Local Government Public Improvement IV-I, VRDN (g)(h):
                  NR*      VMIG1++   11,500     Series 1, 1.14% due 6/01/2023                                        11,500
                  NR*      VMIG1++    3,000     Series B-6, 1.14% due 6/01/2020                                       3,000
                  NR*      VMIG1++    4,200     Series B-12, 1.14% due 6/01/2020                                      4,200
                                             Tennessee HDA, Revenue Bonds (Homeownership Program), AMT, Series 2C:
                  AA       Aa2        1,795     6.05% due 7/01/2012                                                   1,898
                  AA       Aa2        2,250     6.15% due 7/01/2014                                                   2,369
                                             Tennessee HDA, Revenue Refunding Bonds (Homeownership Program),
                                             AMT, Series A (g):
                  AAA      Aaa        4,135     5.25% due 7/01/2022                                                   4,232
                  AAA      Aaa        2,930     5.35% due 1/01/2026                                                   2,992

Texas--17.9%      A+       Aa3        9,000  Austin, Texas, Convention Center Revenue Bonds (Convention
                                             Enterprises Inc.), Trust Certificates, Second Tier, Series B,
                                             5.75% due 1/01/2032                                                      9,407
                  A1+      VMIG1++    2,900  Bell County, Texas, Health Facilities Development Corporation,
                                             Hospital Revenue Bonds (Scott & White Memorial Hospital), VRDN,
                                             Series 2001-2, 1.10% due 8/15/2031 (h)(i)                                2,900
                  AAA      Aaa        1,880  Bexar, Texas, Metropolitan Water District, Waterworks System
                                             Revenue Refunding Bonds, 6.35% due 5/01/2025 (i)                         2,035
                  AAA      Aaa        7,000  Brazos River Authority, Texas, Revenue Refunding Bonds (Houston
                                             Light and Power), Series A, 6.70% due 3/01/2017 (a)                      7,183
                  AAA      NR*       10,000  Dallas-Fort Worth, Texas, International Airport Revenue Bonds,
                                             DRIVERS, AMT, Series 353, 9.59% due 5/01/2011 (i)(k)                    10,700
                  AAA      NR*        6,750  Dallas-Fort Worth, Texas, International Airport Revenue Refunding
                                             Bonds, DRIVERS, AMT, Series 336Z, 9.84% due 11/01/2026 (c)(k)            7,308
                                             Harris County, Houston, Texas, Sports Authority, Revenue Refunding
                                             Bonds, Senior Lien, Series G (I):
                  AAA      Aaa        1,665     5.75% due 11/15/2019                                                  1,862
                  AAA      Aaa        3,500     5.75% due 11/15/2020                                                  3,893
                  AAA      Aaa       10,000     5.25% due 11/15/2030                                                 10,264
                  A1+      VMIG1++    6,890  Harris County, Texas, Health Facilities Development Corporation,
                                             Hospital Revenue Bonds (Texas Children's Hospital), VRDN, Series B-1,
                                             1.15% due 10/01/2029 (h)(i)                                              6,890
                                             Harris County, Texas, Toll Road Revenue Refunding Bonds,
                                             Senior Lien (g):
                  AAA      Aaa        9,000     5.375% due 8/15/2023                                                  9,492
                  AAA      Aaa       10,000     5% due 8/15/2030                                                     10,056
                                             Houston, Texas, Airport System Revenue Refunding Bonds (g):
                  NR*      Aaa       15,000     RIB, Series 845X, 9.98% due 7/01/2030 (k)                            16,646
                  AAA      Aaa        9,500     Sub-Lien, AMT, Series A, 5.70% due 7/01/2030                          9,899
                  AAA      Aaa        4,500  Houston, Texas, Water and Sewer System, Revenue Refunding Bonds,
                                             Junior Lien, Series A, 5.50% due 12/01/2017 (g)                          4,970
                  AAA      Aaa       11,795  Matagorda County, Texas, Navigation District Number 1, Revenue
                                             Refunding Bonds (Houston Light and Power Company), Series A,
                                             6.70% due 3/01/2027 (a)                                                 11,962
                  AAA      Aaa        4,975  Texas State Department of Housing and Community Affairs,
                                             S/F Mortgage Revenue Bonds, AMT, Series A, 5.45% due
                                             9/01/2023 (f)(i)                                                         5,084
                  AAA      Aaa        9,500  Texas State Turnpike Authority, Central Texas Turnpike System
                                             Revenue Bonds, First Tier, Series A, 5.50% due 8/15/2039 (a)            10,039
                  AAA      Aaa        4,000  Texas Technical University, Financing System Revenue Bonds,
                                             Seventh Series, 5.50% due 8/15/2019 (i)                                  4,329
                  AAA      Aaa       10,000  Travis County, Texas, Health Facilities Development Corporation,
                                             Revenue Refunding Bonds, RITR, Series 4, 10.273% due
                                             11/15/2024 (a)(k)                                                       13,625
                  AAA      Aaa       11,240  University of Houston, Texas, University Revenue Bonds, 5.50%
                                             due 2/15/2030 (i)                                                       11,852


MUNIYIELD INSURED FUND, INC., OCTOBER 31, 2003


Schedule of Investments (continued)                                                                          (In Thousands)

                 S&P        Moody's   Face
State         Ratings+++  Ratings+++ Amount  Municipal Bonds                                                        Value

Utah--2.2%        A1       VMIG1++  $16,700  Emery County, Utah, PCR, Refunding (Pacificorp Projects), VRDN,
                                             1.10% due 11/01/2024 (a)(h)                                         $   16,700
                  AAA      Aaa        4,000  Salt Lake City, Utah, Airport Revenue Bonds, AMT, Series A,
                                             6.125% due 12/01/2022 (c)                                                4,096

Vermont--0.2%     AAA      Aaa        1,710  Vermont HFA, S/F Housing Revenue Bonds, AMT, Series 12B, 6.30%
                                             due 11/01/2019 (g)                                                       1,809

Virginia--0.6%    AAA      Aaa        2,500  Halifax County, Virginia, IDA, Exempt Facility Revenue Refunding
                                             Bonds (Old Dominion Electric Cooperative Project), AMT, 5.625%
                                             due 6/01/2028 (a)                                                        2,646
                  AAA      Aaa        2,505  Virginia State, HDA, Commonwealth Mortgage Revenue Bonds, Series J,
                                             Sub-Series J-1, 5.20% due 7/01/2019 (i)                                  2,588

Washington--18.8% AAA      Aaa        3,030  Chelan County, Washington, Public Utility District Number 001,
                                             Consolidated Revenue Bonds (Chelan Hydro System), AMT, Series A,
                                             5.45% due 7/01/2037 (a)                                                  3,095
                                             Chelan County, Washington, Public Utility District Number 001,
                                             Consolidated Revenue Refunding Bonds (Chelan Hydro), AMT (I):
                  AAA      Aaa        6,595     Series B, 6.35% due 7/01/2026                                         7,483
                  AAA      Aaa        6,000     Series C, 5.65% due 7/01/2032                                         6,276
                                             Energy Northwest, Washington, Electric Revenue Refunding Bonds
                                             (Columbia Generating), Series B (g):
                  AAA      Aaa        3,400     5.35% due 7/01/2018                                                   3,650
                  AAA      Aaa        4,625     6% due 7/01/2018                                                      5,246
                                             Energy Northwest, Washington, Electric Revenue Refunding Bonds
                                             (Project Number 1) (I):
                  AAA      Aaa       10,000     Series A, 5.75% due 7/01/2017                                        11,162
                  AAA      Aaa       10,000     Series B, 6% due 7/01/2017                                           11,381
                                             Port Seattle, Washington, Revenue Bonds, Series A:
                  AAA      Aaa        3,500     5.50% due 2/01/2026 (i)                                               3,675
                  AAA      Aaa        3,450     Sub-Lien, 5% due 9/01/2024 (c)                                        3,472
                                             Port Seattle, Washington, Revenue Refunding Bonds (I):
                  AAA      Aaa        7,500     Series A, 5% due 7/01/2033                                            7,517
                  AAA      Aaa       19,565     Series B, AMT, 5.20% due 7/01/2029                                   19,759
                  AAA      Aaa       10,000  Radford Court Properties, Washington, Student Housing Revenue
                                             Bonds, 5.75% due 6/01/2032 (i)                                          10,829
                  AAA      Aaa        9,250  Seattle, Washington, Municipal Light and Power Revenue Bonds, 6%
                                             due 10/01/2024 (i)                                                      10,186
                                             Snohomish County, Washington, Public Utility District Number 001,
                                             Electric Revenue Bonds:
                  AAA      Aaa        1,500     5.50% due 12/01/2023 (g)                                              1,599
                  AAA      Aaa        5,000     (Generation System), AMT, Series B, 5.80% due 1/01/2024 (i)           5,132
                  AAA      NR*        3,750  Tacoma, Washington, Electric System Revenue Refunding Bonds, RIB,
                                             Series 512X, 10.16% due 1/01/2017 (g)(k)                                 4,614
                                             Tacoma, Washington, Solid Waste Utility Revenue Refunding Bonds,
                                             Series B (a):
                  AAA      Aaa        1,455     5.50% due 12/01/2007 (j)                                              1,668
                  AAA      Aaa        7,250     5.50% due 12/01/2019                                                  7,882
                  NR*      Aaa        7,965  Washington State, GO, RIB, Series 390, 10.61% due 1/01/2017 (g)(k)      10,137
                  AAA      Aaa        3,000  Washington State, GO, Series A, 5% due 7/01/2028 (c)                     3,019
                  AAA      Aaa        7,000  Washington State Health Care Facilities Authority Revenue Bonds
                                             (Providence Health System), Series A, 5.25% due 10/01/2021 (i)           7,200
                  AAA      Aaa       12,385  Washington State, Motor Vehicle Fuel Tax GO, Series B, 5% due
                                             7/01/2028 (c)                                                           12,463
                  AAA      Aaa       20,000  Washington State, Various Purpose, GO, Series A, 5.625% due
                                             7/01/2025 (i)                                                           21,311

West Virginia--   AAA      Aaa        4,425  Harrison County, West Virginia, County Commission for Solid Waste
0.7%                                         Disposal Revenue Bonds (Monongahela Power), AMT, Series C, 6.75%
                                             due 8/01/2024 (a)                                                        4,691
                  AAA      Aaa        2,100  West Virginia State Water Development Authority, Water Development
                                             Revenue Refunding Bonds (Loan Program), Series A-1, 5% due
                                             11/01/2026 (a)                                                           2,120

Wisconsin--2.1%   BBB      Baa2       2,375  Badger, Wisconsin, Tobacco Asset Securitization Corporation,
                                             Asset-Backed Revenue Bonds, 6.375% due 6/01/2032                         2,062
                                             Wisconsin Public Power Inc., Power Supply System Revenue Bonds (I):
                  AAA      NR*        6,840     DRIVERS, Series 285, 10.12% due 7/01/2023 (k)                         8,574
                  AAA      Aaa        5,000     Series A, 6% due 7/01/2006 (j)                                        5,666
                  BBB+     NR*        3,395  Wisconsin State Health and Educational Facilities Authority
                                             Revenue Bonds (Synergyhealth Inc.), 6% due 11/15/2032                    3,400

                                             Total Municipal Bonds (Cost--$1,328,259)--147.2%                     1,403,764



MUNIYIELD INSURED FUND, INC., OCTOBER 31, 2003



Schedule of Investments (concluded)                                                                          (In Thousands)

                                      Shares
                                       Held  Short-Term Securities                                                  Value

                                        131  Merrill Lynch Institutional Tax-Exempt Fund++++                     $      131

                                             Total Short-Term Securities (Cost--$131)--0.0%                             131

                  Total Investments (Cost--$1,328,390)--147.2%                                                    1,403,895
                  Unrealized Depreciation on Forward Interest Rate Swaps**--(0.1%)                                    (591)
                  Liabilities in Excess of Other Assets--(1.0%)                                                     (9,600)
                  Preferred Stock, at Redemption Value--(46.1%)                                                   (440,042)
                                                                                                                 ----------
                  Net Assets Applicable to Common Stock--100.0%                                                  $  953,662
                                                                                                                 ==========

(a)AMBAC Insured.

(b)Escrowed to maturity.

(c)FGIC Insured.

(d)FHA Insured.

(e)XL Capital Insured.

(f)Radian Insured.

(g)FSA Insured.

(h)The interest rate is subject to change periodically based upon
prevailing market rates. The interest rate shown is the rate in
effect at October 31, 2003.

(i)MBIA Insured.

(j)Prerefunded.

(k)The interest rate is subject to change periodically and inversely
based upon prevailing market rates. The interest rate shown is the
rate in effect at October 31, 2003.

(l)GNMA Collateralized.

(m)FNMA Collateralized.

++Highest short-term rating by Moody's Investors Service, Inc.

++++Investments in companies considered to be an affiliate of the
Fund (such companies are defined as "Affiliated Companies" in
Section 2(a)(3) of the Investment Company Act of 1940) are as
follows:

                                               (in Thousands)
                                       Net          Dividend
Affiliate                            Activity        Income

Merrill Lynch Institutional
Tax-Exempt Fund                      (42,015)          $183


+++Ratings of issues shown are unaudited.

*Not Rated.

**Forward interest rate swaps entered into as of October 31, 2003
were as follows:

                                               (in Thousands)
                                                   Unrealized
                                     Notional   Appreciation/
                                      Amount     Depreciation

Receive a variable rate equal to
7-Day Bond Market Association
Municipal Swap Index Rate and
pay a fixed rate of 4.285%

Broker, J.P. Morgan Chase Bank
Expires January 2024                  $42,000        $   (78)

Receive a variable rate equal to
7-Day Bond Market Association
Municipal Swap Index Rate and
pay a fixed rate of 4.378%

Broker, J.P. Morgan Chase Bank
Expires January 2024                  $55,000           (549)

Receive a variable rate equal to
3-Month USD LIBOR and pay a
fixed rate of 4.725%

Broker, J.P. Morgan Chase Bank
Expires January 2014                  $40,000             235

Receive a variable rate equal to
3-Month USD LIBOR and pay a
fixed rate of 4.913%

Broker, Morgan Stanley Capital
Services Inc.
Expires February 2014                 $25,000           (199)
                                                     --------
Total                                                $  (591)
                                                     ========

See Notes to Financial Statements.



MUNIYIELD INSURED FUND, INC., OCTOBER 31, 2003


Statement of Net Assets

As of October 31, 2003

Assets

               Investments, at value (identified cost--$1,328,390,449)                                      $ 1,403,895,496
               Cash                                                                                                  94,566
               Receivables:
                 Securities sold                                                          $    29,390,840
                 Interest                                                                      23,560,385
                 Dividends from affiliates                                                              3        52,951,228
                                                                                          ---------------
               Prepaid expenses and other assets                                                                     13,324
                                                                                                            ---------------
               Total assets                                                                                   1,456,954,614
                                                                                                            ---------------

Liabilities

               Unrealized depreciation on forward interest rate swaps                                               591,154
               Payables:
                 Securities purchased                                                          61,090,041
                 Dividends to Common Stock shareholders                                           686,442
                 Investment adviser                                                               665,200
                 Swaps                                                                            102,000
                 Other affiliates                                                                   9,884        62,553,567
                                                                                          ---------------
               Accrued expenses                                                                                     105,929
                                                                                                            ---------------
               Total liabilities                                                                                 63,250,650
                                                                                                            ---------------

Preferred Stock

               Preferred Stock, at redemption value, par value $.10 per share
               (2,200 Series A Shares, 2,200 Series B Shares, 2,200 Series C Shares,
               2,200 Series D Shares, 4,000 Series E Shares, 2,400 Series F Shares
               and 2,400 Series G Shares of AMPS* issued and outstanding at $25,000
               per share liquidation preference)                                                                440,042,360
                                                                                                            ---------------

Net Assets Applicable to Common Stock

               Net assets applicable to Common Stock                                                        $   953,661,604
                                                                                                            ===============

Analysis of Net Assets Applicable to Common Stock

               Common Stock, par value $.10 per share (62,099,095 shares issued
               and outstanding)                                                                             $     6,209,910
               Paid-in capital in excess of par                                                                 869,788,780
               Undistributed investment income--net                                       $    14,405,500
               Accumulated realized capital losses on investments--net                       (11,656,479)
               Unrealized appreciation on investments--net                                     74,913,893
                                                                                          ---------------
               Total accumulated earnings--net                                                                   77,662,914
                                                                                                            ---------------
               Total--Equivalent to $15.36 net asset value per share of Common Stock
               (market price--$14.51)                                                                       $   953,661,604
                                                                                                            ===============

*Auction Market Preferred Stock.

See Notes to Financial Statements.



MUNIYIELD INSURED FUND, INC., OCTOBER 31, 2003



Statement of Operations

For the Year Ended October 31, 2003

Investment Income

               Interest                                                                                     $    75,754,144
               Dividends from affiliates                                                                            183,402
                                                                                                            ---------------
               Total income                                                                                      75,937,546
                                                                                                            ---------------

Expenses

               Investment advisory fees                                                   $     7,001,333
               Commission fees                                                                  1,133,676
               Accounting services                                                                346,804
               Transfer agent fees                                                                147,856
               Professional fees                                                                   83,496
               Custodian fees                                                                      69,144
               Directors' fees and expenses                                                        58,570
               Printing and shareholder reports                                                    55,241
               Listing fees                                                                        44,369
               Pricing fees                                                                        37,411
               Other                                                                               78,823
                                                                                          ---------------
               Total expenses before reimbursement                                              9,056,723
               Reimbursement of expenses                                                         (33,171)
                                                                                          ---------------
               Total expenses after reimbursement                                                                 9,023,552
                                                                                                            ---------------
               Investment income--net                                                                            66,913,994
                                                                                                            ---------------

Realized & Unrealized Gain (Loss) on Investments--Net

               Realized gain on investments--net                                                                 14,488,371
               Change in unrealized appreciation on investments--net                                            (5,044,358)
                                                                                                            ---------------
               Total realized and unrealized gain on investments--net                                             9,444,013
                                                                                                            ---------------

Dividends to Preferred Stock Shareholders

               Investment income--net                                                                           (4,678,286)
                                                                                                            ---------------
               Net Increase in Net Assets Resulting from Operations                                         $    71,679,721
                                                                                                            ===============

See Notes to Financial Statements.



MUNIYIELD INSURED FUND, INC., OCTOBER 31, 2003


Statements of Changes in Net Assets

                                                                                             For the Year Ended October 31,
Increase (Decrease) in Net Assets:                                                              2003               2002

Operations

               Investment income--net                                                     $    66,913,994   $    66,488,601
               Realized gain on investments--net                                               14,488,371         3,197,584
               Change in unrealized appreciation/depreciation on investments--net             (5,044,358)       (5,439,669)
               Dividends and distributions to Preferred Stock shareholders                    (4,678,286)       (6,798,062)
                                                                                          ---------------   ---------------
               Net increase in net assets resulting from operations                            71,679,721        57,448,454
                                                                                          ---------------   ---------------

Dividends & Distributions to Common Stock Shareholders

               Investment income--net                                                        (58,869,942)      (59,023,643)
               Realized gain on investments--net                                                       --         (211,286)
                                                                                          ---------------   ---------------
               Net decrease in net assets resulting from dividends and distributions
               to Common Stock shareholders                                                  (58,869,942)      (59,234,929)
                                                                                          ---------------   ---------------

Common Stock Transactions

               Value of shares issued to Common Stock shareholders in reinvestment
               of dividends and distributions                                                          --         2,279,768
                                                                                          ---------------   ---------------

Net Assets Applicable to Common Stock

               Total increase in net assets applicable to Common Stock                         12,809,779           493,293
               Beginning of year                                                              940,851,825       940,358,532
                                                                                          ---------------   ---------------
               End of year*                                                               $   953,661,604   $   940,851,825
                                                                                          ===============   ===============
                 *Undistributed investment income--net                                    $    14,405,500   $    11,092,600
                                                                                          ===============   ===============

See Notes to Financial Statements.


MUNIYIELD INSURED FUND, INC., OCTOBER 31, 2003

Financial Highlights

The following per share data and ratios have been derived
from information provided in the financial statements.
                                                                                  For the Year Ended October 31,
Increase (Decrease) in Net Asset Value:                         2003         2002       2001++++     2000++++     1999++++

Per Share Operating Performance

               Net asset value, beginning of year            $    15.15   $    15.18   $    14.16   $    13.64   $    16.28
                                                             ----------   ----------   ----------   ----------   ----------
               Investment income--net                           1.08+++         1.07         1.08         1.09         1.10
               Realized and unrealized gain (loss)
               on investments--net                                  .16        (.04)         1.05          .57       (2.14)
               Dividends and distributions to Preferred
               Stock shareholders:
                 Investment income--net                           (.08)        (.11)        (.23)        (.29)        (.19)
                 Realized gain on investments--net                   --         --++           --           --         --++
                 In excess of realized gain on
                 investments--net                                    --           --           --           --        (.06)
                                                             ----------   ----------   ----------   ----------   ----------
               Total from investment operations                    1.16          .92         1.90         1.37       (1.29)
                                                             ----------   ----------   ----------   ----------   ----------
               Less dividends and distributions to
               Common Stock shareholders:
                 Investment income--net                           (.95)        (.95)        (.88)        (.85)        (.90)
                 Realized gain on investments--net                   --         --++           --           --        (.02)
                 In excess of realized gain on
                 investment--net                                     --           --           --           --        (.43)
                                                             ----------   ----------   ----------   ----------   ----------
               Total dividends and distributions to
               Common Stock shareholders                          (.95)        (.95)        (.88)        (.85)       (1.35)
                                                             ----------   ----------   ----------   ----------   ----------
               Net asset value, end of year                  $    15.36   $    15.15   $    15.18   $    14.16   $    13.64
                                                             ==========   ==========   ==========   ==========   ==========
               Market price per share, end of year           $    14.51   $    14.31   $    15.06   $    12.75   $   12.875
                                                             ==========   ==========   ==========   ==========   ==========

Total Investment Return*

               Based on market price per share                    8.19%        1.42%       25.49%        5.94%     (12.04%)
                                                             ==========   ==========   ==========   ==========   ==========
               Based on net asset value per share                 8.18%        6.52%       13.89%       11.06%      (8.42%)
                                                             ==========   ==========   ==========   ==========   ==========

Ratios Based on Average Net Assets of Common Stock

               Total expenses, net of reimbursement**              .94%         .97%         .98%         .99%         .94%
                                                             ==========   ==========   ==========   ==========   ==========
               Total expenses**                                    .95%         .97%         .98%         .99%         .94%
                                                             ==========   ==========   ==========   ==========   ==========
               Total investment income--net**                     6.99%        7.16%        7.34%        7.92%        7.26%
                                                             ==========   ==========   ==========   ==========   ==========
               Amount of dividends to Preferred Stock
               shareholders                                        .49%         .73%        1.59%        2.13%        1.27%
                                                             ==========   ==========   ==========   ==========   ==========
               Investment income--net, to Common Stock
               shareholders                                       6.50%        6.43%        5.75%        5.79%        5.99%
                                                             ==========   ==========   ==========   ==========   ==========

Ratios Based on Average Net Assets of Common & Preferred Stock**

               Total expenses, net of reimbursement                .64%         .66%         .66%         .65%         .64%
                                                             ==========   ==========   ==========   ==========   ==========
               Total expenses                                      .65%         .66%         .66%         .65%         .64%
                                                             ==========   ==========   ==========   ==========   ==========
               Total investment income--net                       4.78%        4.86%        4.95%        5.22%        4.95%
                                                             ==========   ==========   ==========   ==========   ==========


MUNIYIELD INSURED FUND, INC., OCTOBER 31, 2003


Financial Highlights (concluded)

The following per share data and ratios have been derived
from information provided in the financial statements.
                                                                                  For the Year Ended October 31,
Increase (Decrease) in Net Asset Value:                         2003         2002       2001++++     2000++++     1999++++

Ratios Based on Average Net Assets of Preferred Stock

               Dividends to Preferred Stock shareholders          1.06%        1.53%        3.30%        4.11%        2.72%
                                                             ==========   ==========   ==========   ==========   ==========

Supplemental Data

               Net assets applicable to Common Stock,
               end of year (in thousands)                    $  953,662   $  940,852   $  940,359   $  877,390   $  844,944
                                                             ==========   ==========   ==========   ==========   ==========
               Preferred Stock outstanding, end of year
               (in thousands)                                $  440,000   $  440,000   $  440,000   $  440,000   $  440,000
                                                             ==========   ==========   ==========   ==========   ==========
               Portfolio turnover                               114.05%       97.34%       99.00%      107.11%      121.88%
                                                             ==========   ==========   ==========   ==========   ==========

Leverage

               Asset coverage per $1,000                     $    3,167   $    3,138   $    3,137   $    2,994   $    2,920
                                                             ==========   ==========   ==========   ==========   ==========

Dividends Per Share on Preferred Stock Outstanding

               Series A--Investment income--net              $      270   $      364   $      833   $    1,051   $      745
                                                             ==========   ==========   ==========   ==========   ==========
               Series B--Investment income--net              $      273   $      364   $      842   $    1,051   $      675
                                                             ==========   ==========   ==========   ==========   ==========
               Series C--Investment income--net              $      268   $      360   $      849   $    1,063   $      752
                                                             ==========   ==========   ==========   ==========   ==========
               Series D--Investment income--net              $      247   $      348   $      825   $      986   $      637
                                                             ==========   ==========   ==========   ==========   ==========
               Series E--Investment income--net              $      240   $      352   $      790   $    1,048   $      640
                                                             ==========   ==========   ==========   ==========   ==========
               Series F--Investment income--net              $      274   $      359   $      860   $    1,010   $      664
                                                             ==========   ==========   ==========   ==========   ==========
               Series G--Investment income--net              $      304   $      545   $      799   $      992   $      661
                                                             ==========   ==========   ==========   ==========   ==========

*Total investment returns based on market value, which can be
significantly greater or lesser than the net asset value, may result
in substantially different returns. Total investment returns exclude
the effects of sales charges.

**Do not reflect the effect of dividends to Preferred Stock
shareholders.

++Amount is less than $(.01) per share.

++++Certain prior year amounts have been reclassified to conform to
current year presentation.

+++Based on average shares outstanding.

See Notes to Financial Statements.



MUNIYIELD INSURED FUND, INC., OCTOBER 31, 2003



Notes to Financial Statements


1. Significant Accounting Policies:
MuniYield Insured Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940, as amended, as a non-diversified,
closed-end management investment company. The Fund's financial
statements are prepared in conformity with accounting principles
generally accepted in the United States of America, which may
require the use of management accruals and estimates. The Fund
determines and makes available for publication the net asset value
of its Common Stock on a weekly basis. The Fund's Common Stock is
listed on the New York Stock Exchange under the symbol MYI. The
following is a summary of significant accounting policies followed
by the Fund.

(a) Valuation of investments--Municipal bonds are traded primarily
in the over-the-counter markets and are valued at the last available
bid price in the over-the-counter market or on the basis of yield
equivalents as obtained by the Fund's pricing service from one or
more dealers that make markets in such securities. Financial futures
contracts and options thereon, which are traded on exchanges, are
valued at their closing prices as of the close of such exchanges.
Options written or purchased are valued at the last sale price in
the case of exchange-traded options. In the case of options traded
in the over-the-counter market, valuation is the last asked price
(options written) or the last bid price (options purchased). Swap
agreements are valued by quoted fair values received daily by the
Fund from the counterparty. Short-term investments with a remaining
maturity of sixty days or less are valued at amortized cost, which
approximates market value. Securities and assets for which market
quotations are not readily available are valued at fair value as
determined in good faith by or under the direction of the Board of
Directors of the Fund, including valuations furnished by a pricing
service retained by the Fund, which may utilize a matrix system for
valuations. The procedures of the pricing service and its valuations
are reviewed by the officers of the Fund under the general
supervision of the Board of Directors.

(b) Derivative financial instruments--The Fund may engage in various
portfolio investment strategies both to increase the return of the
Fund and to hedge, or protect, its exposure to interest rate
movements and movements in the securities markets. Losses may arise
due to changes in the value of the contract or if the counterparty
does not perform under the contract.

* Financial futures contracts--The Fund may purchase or sell
financial futures contracts and options on such futures contracts.
Futures contracts are contracts for delayed delivery of securities
at a specific future date and at a specific price or yield. Upon
entering into a contract, the Fund deposits and maintains as
collateral such initial margin as required by the exchange on which
the transaction is effected. Pursuant to the contract, the Fund
agrees to receive from or pay to the broker an amount of cash equal
to the daily fluctuation in value of the contract. Such receipts or
payments are known as variation margin and are recorded by the Fund
as unrealized gains or losses. When the contract is closed, the Fund
records a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and the value at the
time it was closed.

* Options--The Fund is authorized to write covered call options and
purchase put options. When the Fund writes an option, an amount
equal to the premium received by the Fund is reflected as an asset
and an equivalent liability. The amount of the liability is
subsequently marked to market to reflect the current market value of
the option written. When a security is purchased or sold through an
exercise of an option, the related premium paid (or received) is
added to (or deducted from) the basis of the security acquired, or
deducted from (or added to) the proceeds of the security sold. When
an option expires (or the Fund enters into a closing transaction),
the Fund realizes a gain or loss on the option to the extent of the
premiums received or paid (or gain or loss to the extent the cost of
the closing transaction exceeds the premium paid or received).

Written and purchased options are non-income producing investments.

* Forward interest rate swaps--The Fund may enter into forward
interest rate swaps. In a forward interest rate swap, the Fund and
the counterparty agree to make periodic net payments on a specified
notional contract amount, commencing on a specified future effective
date, unless terminated earlier. When the agreement is closed, the
Fund records a realized gain or loss in an amount equal to the value
of the agreement.



MUNIYIELD INSURED FUND, INC., OCTOBER 31, 2003



Notes to Financial Statements (continued)


(c) Income taxes--It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its
taxable income to its shareholders. Therefore, no Federal income tax
provision is required.

(d) Security transactions and investment income--Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Realized gains and losses on security
transactions are determined on the identified cost basis. Dividend
income is recorded on the ex-dividend dates. Interest income is
recognized on the accrual basis. The Fund amortizes all premiums and
discounts on debt securities.

(e) Dividends and distributions--Dividends from net investment
income are declared and paid monthly. Distributions of capital gains
are recorded on the ex-dividend dates.

(f) Reclassification--Accounting principles generally accepted in
the United States of America require that certain components of net
assets be adjusted to reflect permanent differences between
financial and tax reporting. Accordingly, the current year's
permanent book/tax difference of $52,867 has been reclassified
between undistributed net investment income and accumulated net
realized capital losses. This reclassification has no effect on net
assets or net asset values per share.


2. Investment Advisory Agreement and Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund
Asset Management, L.P. ("FAM"). The general partner of FAM is
Princeton Services, Inc. ("PSI"), an indirect, wholly-owned
subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is the
limited partner.

FAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of the Fund. For such
services, the Fund pays a monthly fee at an annual rate of .50% of
the Fund's average weekly net assets, including proceeds from the
issuance of Preferred Stock. For the year ended October 31, 2003,
FAM reimbursed the Fund in the amount of $33,171.

For the year ended October 31, 2003, the Fund reimbursed FAM $32,712
for certain accounting services.

Certain officers and/or directors of the Fund are officers and/or
directors of FAM, PSI, and/or ML & Co.


3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the year ended October 31, 2003 were $1,533,510,562 and
$1,559,951,709, respectively.

Net realized gains (losses) for the year ended October 31, 2003 and
net unrealized gains (losses) as of October 31, 2003 were as
follows:

                                      Realized         Unrealized
                                Gains (Losses)     Gains (Losses)

Long-term investments           $   19,579,237     $   75,505,047
Financial futures contracts       (13,994,556)                 --
Forward interest rate swaps          8,903,690          (591,154)
                                --------------     --------------
Total                           $   14,488,371     $   74,913,893
                                ==============     ==============


As of October 31, 2003, net unrealized appreciation for Federal
income tax purposes aggregated $75,583,323, of which $76,274,676
related to appreciated securities and $691,353 related to
depreciated securities. The aggregate cost of investments at
October 31, 2003 for Federal income tax purposes was $1,328,312,173.


4. Stock Transactions:
The Fund is authorized to issue 200,000,000 shares of stock,
including Preferred Stock, par value $.10 per share, all of which
were initially classified as Common Stock. The Board of Directors is
authorized, however, to reclassify any unissued shares of capital
without approval of the holders of Common Stock.

Preferred Stock
Auction Market Preferred Stock ("AMPS") are redeemable shares of
Preferred Stock of the Fund, with a par value of $.10 per share and
a liquidation preference of $25,000 per share, plus accrued and
unpaid dividends, that entitle their holders to receive cash
dividends at an annual rate that may vary for the successive
dividend periods. The yields in effect at October 31, 2003 were as
follows: Series A, 1.07%; Series B, .88%; Series C, .81%; Series D,
..799%; Series E, .723%; Series F, .72%; and Series G, .80%.



MUNIYIELD INSURED FUND, INC., OCTOBER 31, 2003



Notes to Financial Statements (concluded)


The Fund pays commissions to certain broker-dealers at the
end of each auction at an annual rate ranging from .25% to .375%,
calculated on the proceeds of each auction. For the year ended
October 31, 2003, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, an affiliate of FAM, earned $441,515 as commissions.


5. Distributions to Shareholders:
The Fund paid a tax-exempt income dividend to holders of Common
Stock in the amount of $.079000 per share on November 26, 2003 to
shareholders of record on November 14, 2003.

The tax character of distributions paid during the fiscal years
ended October 31, 2003 and October 31, 2002 was as follows:

                                    10/31/2003         10/31/2002

Distributions paid from:
   Tax-exempt income            $   63,548,228     $   65,763,321
   Ordinary income                          --            269,670
                                --------------     --------------
Total distributions             $   63,548,228     $   66,032,991
                                ==============     ==============


As of October 31, 2003, the components of accumulated earnings on a
tax basis were as follows:


Undistributed tax-exempt income--net               $   14,295,853
Undistributed long-term capital gains--net                     --
                                                   --------------
Total undistributed earnings--net                      14,295,853
Capital loss carryforward                            (1,624,552)*
Unrealized gains--net                                64,991,613**
                                                   --------------
Total accumulated earnings--net                    $   77,662,914
                                                   ==============

*On October 31, 2003, the Fund had a net capital loss carryforward
of $1,624,552, all of which expires in 2008. This amount will be
available to offset like amounts of any future taxable gains.

**The difference between book-basis and tax-basis net unrealized
gains is attributable primarily to the tax deferral of losses on
wash sales, the tax deferral of losses on straddles and the
difference between book and tax amortization methods for premiums
and discounts on fixed income securities.



MUNIYIELD INSURED FUND, INC., OCTOBER 31, 2003



Report of Independent Auditors


To the Shareholders and Board of Directors
of MuniYield Insured Fund, Inc.:

We have audited the accompanying statement of net assets of
MuniYield Insured Fund, Inc., including the schedule of investments,
as of October 31, 2003, and the related statement of operations for
the year then ended, the statements of changes in net assets for
each of the two years in the period then ended and financial
highlights for each of the years indicated therein. These financial
statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on
these financial statements and financial highlights based on our
audits.

We conducted our audits in accordance with auditing standards
generally accepted in the United States. Those standards require
that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements and financial highlights are
free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements and financial highlights. Our procedures
included confirmation of securities owned as of October 31, 2003, by
correspondence with the custodian and others. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of MuniYield Insured Fund, Inc. as of October 31,
2003, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period
then ended and the financial highlights for each of the years
indicated, in conformity with accounting principles generally
accepted in the United States.


(Ernst & Young LLP)
MetroPark, New Jersey
December 18, 2003



Important Tax Information (unaudited)


All of the net investment income distributions paid by MuniYield
Insured Fund, Inc. during its taxable year ended October 31, 2003
qualify as tax-exempt interest dividends for Federal income tax
purposes.

Please retain this information for your records.




MUNIYIELD INSURED FUND, INC., OCTOBER 31, 2003



Automatic Dividend Reinvestment Plan


The following description of the Fund's Automatic Dividend
Reinvestment Plan (the "Plan") is sent to you annually as required
by Federal securities laws.

Pursuant to the Fund's Plan, unless a holder of Common Stock
otherwise elects, all dividend and capital gains distributions will
be automatically reinvested by EquiServe (the "Plan Agent"), as
agent for shareholders in administering the Plan, in additional
shares of Common Stock of the Fund. Holders of Common Stock who
elect not to participate in the Plan will receive all distributions
in cash paid by check mailed directly to the shareholder 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
participants may elect not to participate in the 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 the 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 will be effective with respect to any subsequently
declared dividend or distribution.

Whenever the Fund declares an income dividend or capital gains
distribution (collectively referred to as "dividends") payable
either in shares or in cash, non-participants in the Plan will
receive cash and participants in the Plan will receive the
equivalent in shares of Common Stock. The shares will be acquired by
the Plan Agent for the participant's account, depending upon the
circumstances described below, either (i) through receipt of
additional unissued but authorized shares of Common Stock from the
Fund ("newly issued shares") or (ii) by purchase of outstanding
shares of Common Stock on the open market ("open-market purchases")
on the New York Stock Exchange or elsewhere. If on the payment date
for the dividend, the net asset value per share of the Common Stock
is equal to or less than the market price per share of the Common
Stock plus estimated brokerage commissions (such conditions being
referred to herein as "market premium"), the Plan Agent will invest
the dividend amount in newly issued shares on behalf of the
participant. The number of newly issued shares of Common Stock to be
credited to the participant's account will be 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 "market discount"), the Plan
Agent will invest the dividend amount in shares acquired on behalf
of the participant in open-market purchases.

In the event of a market discount on the dividend payment date, the
Plan Agent will have until the last business day before the next
date on which the shares trade on an "ex-dividend" basis or in no
event more than 30 days after the dividend payment date (the "last
purchase date") to invest the dividend amount in shares acquired in
open-market purchases. It is contemplated that the Fund will pay
monthly income dividends. Therefore, the period during which open-
market purchases can be made will exist only from the payment date
on the dividend through the date before the next "ex-dividend" date,
which typically will be approximately ten days. If, before the Plan
Agent has completed its open-market purchases, the market price of a
share of 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's shares, resulting in the
acquisitions 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, the 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 will cease making open-market
purchases and will invest the uninvested portion of the dividend
amount in newly issued shares at the close of business on the last
purchase date determined by dividing the uninvested portion of the
dividend by the net asset value per share.

The Plan Agent maintains all shareholders' accounts in the Plan and
furnishes written confirmation of all transactions in the account,
including information needed by shareholders for tax records. Shares
in the account of each Plan participant will be held by the Plan
Agent in non-certificated form in the name of the participant, and
each shareholder's proxy will include those shares purchased or
received pursuant to the Plan. The Plan Agent will forward all proxy
solicitation materials to participants and vote proxies for shares
held pursuant to the Plan in accordance with the instructions of the
participants.



MUNIYIELD INSURED FUND, INC., OCTOBER 31, 2003



Automatic Dividend Reinvestment Plan (concluded)


In the case of shareholders such as banks, brokers or nominees which
hold shares of others who are the beneficial owners, the Plan Agent
will administer the Plan on the basis of the number of shares
certified from time to time by the record shareholders as
representing the total amount registered in the record shareholder's
name and held for the account of beneficial owners who are to
participate in the Plan.

There will be no brokerage charges with respect to shares issued
directly by the Fund as a result of dividends or capital gains
distributions payable either in shares or in cash. However, each
participant will pay a pro rata share of brokerage commissions
incurred with respect to the Plan Agent's open-market purchases in
connection with the reinvestment of dividends.

The automatic reinvestment of dividends and distributions will not
relieve participants of any Federal, state or local income tax that
may be payable (or required to be withheld) on such dividends.

Shareholders participating in the Plan may receive benefits not
available to shareholders not participating in the Plan. If the
market price plus commissions of the Fund's shares is above the net
asset value, participants in the Plan will receive shares of the
Fund at less than they could otherwise purchase them and will 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 below the net asset value, participants
will receive distributions in 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 in shares at prices below the net
asset value. Also, since the Fund does not redeem shares, the price
on resale may be more or less than the net asset value.

The value of shares acquired pursuant to the Plan will generally be
excluded from gross income to the extent that the cash amount
reinvested would be excluded from gross income. If, when the Fund'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'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 the shareholders, including shareholders
who do not participate in the Plan. Thus, shareholders who do not
participate in the Plan might be required to report as ordinary
income a portion of their distributions equal to their allocable
share of the discount.

Experience under the Plan may indicate that changes are desirable.
Accordingly, the Fund reserves the right to amend or terminate the
Plan. There is no direct service charge to participants in the Plan;
however, the Fund reserves the right to amend the Plan to include a
service charge payable by the participants.

All correspondence concerning the Plan should be directed to the
Plan Agent at EquiServe, P.O. Box 43010, Providence, RI 02940-3010,
Telephone: 800-426-5523.



MUNIYIELD INSURED FUND, INC., OCTOBER 31, 2003



Officers and Directors (unaudited)

                                                                                            Number of
                                                                                            Portfolios in  Other Public
                        Position(s)  Length                                                 Fund Complex   Directorships
                        Held         Of Time                                                Overseen by    Held by
Name, Address & Age     with Fund    Served   Principal Occupation(s) During Past 5 Years   Director       Director

Interested Director


Terry K. Glenn*         President    1999 to  President and Chairman of Merrill Lynch       124 Funds      None
P.O. Box 9011           and          present  Investment Managers, L.P. ("MLIM")/Fund       163 Portfolios
Princeton,              Director     and      Asset Management, L.P. ("FAM")--Advised
NJ 08543-9011                        1992 to  Funds since 1999; Chairman (Americas
Age: 63                              present  Region) of MLIM from 2000 to 2002;
                                              Executive Vice President of MLIM and FAM
                                              (which terms as used herein include their
                                              corporate predecessors) from 1983 to 2002;
                                              President of FAM Distributors, Inc. ("FAMD")
                                              from 1986 to 2002 and Director thereof from
                                              1991 to 2002; Executive Vice President and
                                              Director of Princeton Services, Inc.
                                              ("Princeton Services") from 1993 to 2002;
                                              President of Princeton Administrators, L.P.
                                              from 1989 to 2002; Director of Financial
                                              Data Services, Inc. since 1985.


*Mr. Glenn is a director, trustee or member of an advisory board of
certain other investment companies for which MLIM or FAM acts as
investment adviser. Mr. Glenn is an "interested person," as
described in the Investment Company Act, of the Fund based on his
former positions with MLIM, FAM, FAMD, Princeton Services and
Princeton Administrators, L.P. The Director's term is unlimited.
Directors serve until their resignation, removal or death, or until
December 31 of the year in which they turn 72. As Fund President,
Mr. Glenn serves at the pleasure of the Board of Directors.




Independent Directors*


James H. Bodurtha       Director     2002 to  Director, The China Business Group, Inc.      40 Funds       None
P.O. Box 9095                        present  since 1996 and Executive Vice President       59 Portfolios
Princeton,                                    thereof from 1996 to 2003; Chairman of
NJ 08543-9095                                 the Board, Berkshire Holding Corporation
Age: 59                                       since 1980; Partner, Squire, Sanders &
                                              Dempsey from 1980 to 1993.


Joe Grills              Director     1994 to  Member of the Committee of Investment of      40 Funds       Kimco Realty
P.O. Box 9095                        present  Employee Benefit Assets of the Association    59 Portfolios  Corporation
Princeton,                                    of Financial Professionals ("CIEBA") since
NJ 08543-9095                                 1986 and its Chairman from 1991 to 1992;
Age: 68                                       Member of the Investment Advisory Committees
                                              of the State of New York Common Retirement
                                              Fund since 1989; Member of the Investment
                                              Advisory Committee of the Howard Hughes
                                              Medical Institute from 1997 to 2000;
                                              Director, Duke Management Company since 1992
                                              and Vice Chairman thereof since 1998;
                                              Director LaSalle Street Fund from 1995 to
                                              2001; Director, Kimco Realty Corporation
                                              since 1997; Member of the Investment Advisory
                                              Committee of the Virginia Retirement System
                                              since 1998 and Vice Chairman thereof since
                                              2002; Director, Montpelier Foundation since
                                              1998 and Vice Chairman thereof since 2000;
                                              Member of the Investment Committee of the
                                              Woodberry Forest School since 2000; Member
                                              of the Investment Committee of the National
                                              Trust for Historic Preservation since 2000.


MUNIYIELD INSURED FUND, INC., OCTOBER 31, 2003


Officers and Directors (unaudited)(continued)

                                                                                            Number of
                                                                                            Portfolios in  Other Public
                        Position(s)  Length                                                 Fund Complex   Directorships
                        Held         Of Time                                                Overseen by    Held by
Name, Address & Age     with Fund    Served   Principal Occupation(s) During Past 5 Years   Director       Director

Independent Directors* (concluded)


Herbert I. London       Director     2002 to  John M. Olin Professor of Humanities, New     40 Funds       None
P.O. Box 9095                        present  York University since 1993 and Professor      59 Portfolios
Princeton,                                    thereof since 1980; President of Hudson
NJ 08543-9095                                 Institute since 1997 and Trustee thereof
Age: 64                                       since 1980.


Andre F. Perold         Director     2002 to  George Gund Professor of Finance and          40 Funds       None
P.O. Box 9095                        present  Banking, Harvard Business School since        59 Portfolios
Princeton,                                    2000 and a member of the faculty since
NJ 08543-9095                                 1979; Director and Chairman of the
Age: 51                                       Board, UNX, Inc. since 2003; Director,
                                              Sanlam Limited and Sanlam Life since
                                              2001; Director, Genbel Securities and
                                              Gensec Bank since 1999; Director,
                                              Stockback.com from 2002 to 2002;
                                              Director, Bulldogresearch.com from
                                              2000 to 2001; Director, Sanlam
                                              Investment Management from 1999 to
                                              2001; Director, Quantec Limited from
                                              1991 to 1999.


Roberta Cooper Ramo     Director     2002 to  Shareholder, Modrall, Sperling, Roehl,        40 Funds       None
P.O. Box 9095                        present  Harris & Sisk, P.A. since 1993; Director      59 Portfolios
Princeton,                                    of Cooper's, Inc. since 1999 and
NJ 08543-9095                                 Chairman of the Board since 2000;
Age: 61                                       Director of ECMC, Inc. since 2001.


Robert S. Salomon, Jr.  Director     1996 to  Principal of STI Management since 1994;       40 Funds       None
P.O. Box 9095                        present  Trustee of Commonfund from 1980 to 2001;      59 Portfolios
Princeton,                                    Director of Rye Country Day School since
NJ 08543-9095                                 2001.
Age: 66


Stephen B. Swensrud     Director     1992 to  Chairman, Fernwood Advisors (investment       41 Funds       None
P.O. Box 9095                        present  adviser) since 1996; Principal of Fernwood    60 Portfolios
Princeton,                                    Associates (financial consultant) since
NJ 08543-9095                                 1975; Chairman of RPP Corporation since
Age: 70                                       1978; Director, International Mobile
                                              Communications, Inc. since 1998.


*The Director's term is unlimited. Directors serve until their
resignation, removal or death, or until December 31 of the year in
which they turn 72.


MUNIYIELD INSURED FUND, INC., OCTOBER 31, 2003


Officers and Directors (unaudited)(concluded)

                        Position(s)  Length
                        Held         Of Time
Name, Address & Age     with Fund    Served*  Principal Occupation(s) During Past 5 Years

Fund Officers


Donald C. Burke         Vice         1993 to  First Vice President of MLIM and FAM since 1997 and Treasurer thereof since
P.O. Box 9011           President    present  1999; Senior Vice President and Treasurer of Princeton Services since 1999;
Princeton,              and          and      Vice President of FAMD since 1999; Director of MLIM Taxation since 1990.
NJ 08543-9011           Treasurer    1999 to
Age: 43                              present


Kenneth A. Jacob        Senior       2002 to  Managing Director of MLIM since 2000; Director (Municipal Tax-Exempt Fund
P.O. Box 9011           Vice         present  Management) of MLIM from 1997 to 2000.
Princeton,              President
NJ 08543-9011
Age: 52


John M. Loffredo        Senior       2002 to  Managing Director of MLIM since 2000; Director (Municipal Tax-Exempt Fund
P.O. Box 9011           Vice         present  Management) of MLIM from 1998 to 2000.
Princeton,              President
NJ 08543-9011
Age: 39


William R. Bock         Vice         1993 to  Vice President of MLIM since 1989.
P.O. Box 9011           President    present
Princeton,
NJ 08543-9011
Age: 67


Brian D. Stewart        Secretary    2003 to  Vice President (Legal Advisory) of MLIM since 2002; Attorney with Reed Smith
P.O. Box 9011                        present  from 2001 to 2002; Attorney with Saul Ewing from 1999 to 2001.
Princeton,
NJ 08543-9011
Age: 34


* Officers of the Fund serve at the pleasure of the Board of
Directors.



Custodian
State Street Bank and
Trust Company
P.O. Box 351
Boston, MA 02101


Transfer Agents

Common Stock:
EquiServe
P.O. Box 43010
Providence, RI 02940-3010


Preferred Stock:
The Bank of New York
100 Church Street
New York, NY 10286



NYSE Symbol
MYI



MUNIYIELD INSURED FUND, INC., OCTOBER 31, 2003



Electronic Delivery


The Fund is now offering electronic delivery of communications to
its shareholders. In order to receive this service, you must
register your account and provide us with e-mail information.
To sign up for this service, simply access this website
http://www.icsdelivery.com/live and follow the instructions.
When you visit this site, you will obtain a personal identification
number (PIN). You will need this PIN should you wish to update your
e-mail address, choose to discontinue this service and/or make any
other changes to the service. This service is not available for
certain retirement accounts at this time.



</pre>







<p><!-- *************************************************************************** -->
  <!-- MARKER PAGE="sheet: 38; page: 38" -->
<p>
<p>
<table width=600>
  <tr align="left">
    <td><font size=2>&lt;R&gt;&lt;/R&gt;</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>&lt;R&gt;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 19, 2004, or any adjournment thereof.&lt;/R&gt;
      </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>&lt;R&gt;You may also vote your shares by touch-tone phone
      by calling 1-866-800-7593 or through the Internet at www.proxyvote.com.
      &lt;/R&gt; </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=46%><font size="1">03) Robert S. Salomon, Jr. </font></td>
    <td width=50%>__________________________________</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>
<!-- *************************************************************************** -->
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<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=left valign=top><font size="2">&lt;R&gt;</font></td>
    <td width=5% align=center valign=top>&nbsp;</td>
    <td width=85%>&nbsp;</td>
  </tr>
  <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.(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"> Articles of Amendment to the Articles of Incorporation
      of the Registrant.(a)</font></td>
  </tr>
  <tr>
    <td width=10% align=center valign=top><font size="2">&nbsp;(c)</font></td>
    <td width=5% align=center valign=top><font size="2">&#151; </font></td>
    <td width=85%><font size="2">Form of Articles Supplementary creating the Series
      A, Series B, Series C, Series D and Series E Auction Market Preferred Stock
      of the Registrant.(b)</font></td>
  </tr>
  <tr>
    <td width=10% align=center valign=top><font size="2">&nbsp;(d)</font></td>
    <td width=5% align=center valign=top><font size="2">&#151; </font></td>
    <td width=85%><font size="2">Form of Articles Supplementary creating the Series
      F and Series G Auction Market Preferred Stock of the Registrant.(c) </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.(d) </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 MuniInsured 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.(e) </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.(d) </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.(d) </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.(d)
      </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.(a)
      </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"> Form of Custody Agreement between the Registrant
      and State Street Bank and Trust Company (&#147;State Street&#148;).(&nbsp;&nbsp;&nbsp;)
      </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 valign="top">
    <td width=10% align=center><font size="2">11&nbsp;&nbsp;&nbsp;&nbsp; </font></td>
    <td width=5% align=center>&#151;</td>
    <td width=85%><font size="2"> Opinion of Sidley Austin Brown &amp; Wood <font size=1>LLP</font>, counsel for the Registrant.</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.(f) </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.(g) </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.(g) </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) &lt;/R&gt;</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=left valign=top><font size="2">&lt;R&gt;</font></td>
    <td width=5% align=center valign=top>&nbsp;</td>
    <td width=85%>&nbsp;</td>
  </tr>
  <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 Ernst &amp; Young, <font size="1">LLP</font>,
      independent auditors for the Registrant.</font></td>
  </tr>
</table>
<table width=600>
  <tr valign="top">
    <td width=10% align=center><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;(b) </font></td>
    <td width=5% align=center>&#151;<font size="2"> </font></td>
    <td width=85%><font size="2"> Consent of Deloitte &amp; Touche, <font size="1">LLP</font>,
      independent auditors for MuniInsured Fund, Inc.</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.(h)</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=left valign=top><font size="1">(a)</font></td>
    <td width=2% align=center valign=top><font size="1"></font></td>
    <td width=94%><font size="1">Incorporated by reference to the Registrant&#146;s
      Registration Statement on Form N-2 relating to the Registrant's Common Stock
      (File Nos. 33-45058 and 811-06540) (the &#147;Common Stock Registration Statement&#148;).</font></td>
  </tr>
  <tr>
    <td width=4% align=left valign=top><font size="1">(b)</font></td>
    <td width=2% align=center valign=top><font size="1"></font></td>
    <td width=94%><font size="1">Incorporated by reference to Pre-Effective Amendment
      No. 1 to the Registrant's Registration Statement on Form N-2 relating to
      the Auction Market Preferred Stock, (File Nos. 33-46025 and 811-06540).
      </font></td>
  </tr>
  <tr>
    <td width=4% align=left valign=top><font size="1">(c)</font></td>
    <td width=2% align=center valign=top><font size="1"></font></td>
    <td width=94%><font size="1">Incorporated by reference to Exhibit 1(d) to
      the Pre-Effective Amendment No. 1 to the Registrant's Registration Statement
      on Form N-14 (File Nos. 333-07823 and 811-06540), filed on August 21, 1996.</font></td>
  </tr>
  <tr>
    <td width=4% align=left valign=top><font size="1">(d)</font></td>
    <td width=2% align=center valign=top><font size="1"></font></td>
    <td width=94%><font size="1">Incorporated by reference to Pre-Effective Amendment
      No. 2 to the Registrant's Common Stock Registration Statement. </font></td>
  </tr>
  <tr>
    <td width=4% align=left valign=top><font size="1">(e) </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=left valign=top><font size="1">(f) </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=left valign=top><font size="1">(g) </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>
  <tr>
    <td width=4% align=left valign=top><font size="1">(h)</font></td>
    <td width=2%><font size="1"></font></td>
    <td width=94%><font size="1">Previously filed on March 9, 2004 with the Registrant's
      Registration Statement on Form N-14 (File Nos. 333-113433 and 811-06540).
      &lt;/R&gt; </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;&lt;R&gt;<b>As required by
      the Securities Act of 1933, this Pre-Effective Amendment to the Registration
      Statement has been signed on behalf of the Registrant, in the Township of
      Plainsboro and State of New Jersey, on the 15th day of April, 2004.</b>
      &lt;/R&gt;</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;&lt;R&gt;As required by
      the Securities Act of 1933, this Pre-Effective Amendment to the Registration
      Statement has been signed by the following persons in the capacities and
      on the dates indicated.</b> &lt;/R&gt;</font></td>
  </tr>
</table>
<p>
<p>
<table width=600>
  <tr>
    <td  align=center width="209"><font size=1><b>Signatures </b> </font>
      <hr noshade size="1" width="30%">
    </td>
    <td  align=center width="12">&nbsp;</td>
    <td  align=center width="201"><b><font size="1">Title </font></b>
      <hr noshade size="1" width="15%">
    </td>
    <td  align=center width="10">&nbsp;</td>
    <td  align=center width="144"><font size="1"><b>Date </b> </font>
      <hr noshade size="1" width="30%">
    </td>
  </tr>
  <tr>
    <td  align=center width="209"><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="12">&nbsp;&nbsp;&nbsp;</td>
    <td  align=left valign="top" width="201"><font size=2>President (Principal
      Executive <br>
      &nbsp;&nbsp;&nbsp;Officer) and Director </font></td>
    <td  align=center width="10">&nbsp;&nbsp;&nbsp;</td>
    <td  align=center valign="top" width="144">&nbsp;</td>
  </tr>
  <tr>
    <td  align=center width="209">&nbsp;</td>
    <td  align=center width="12">&nbsp;</td>
    <td  align=left valign="top" width="201">&nbsp;</td>
    <td  align=center width="10">&nbsp;</td>
    <td  align=center valign="top" width="144">&nbsp;</td>
  </tr>
  <tr>
    <td  align=center width="209"><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="12">&nbsp;</td>
    <td  align=left valign="top" width="201"><font size=2>Vice President and Treasurer
      <br>
      &nbsp;&nbsp;&nbsp; (Principal Financial and <br>
      &nbsp;&nbsp;&nbsp; Accounting Officer) </font></td>
    <td  align=center width="10">&nbsp;</td>
    <td  align=center valign="top" width="144"><font size=2> </font></td>
  </tr>
  <tr>
    <td  align=center width="209">&nbsp;</td>
    <td  align=center width="12">&nbsp;</td>
    <td  align=left valign="top" width="201">&nbsp;</td>
    <td  align=center width="10">&nbsp;</td>
    <td  align=center valign="top" width="144">&nbsp;</td>
  </tr>
  <tr>
    <td  align=center width="209"><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="12">&nbsp;</td>
    <td  align=left valign="top" width="201"><font size=2>Director </font></td>
    <td  align=center width="10">&nbsp;</td>
    <td  align=center valign="top" width="144">&nbsp;</td>
  </tr>
  <tr>
    <td  align=center width="209">&nbsp;</td>
    <td  align=center width="12">&nbsp;</td>
    <td  align=left valign="top" width="201">&nbsp;</td>
    <td  align=center width="10">&nbsp;</td>
    <td  align=center valign="top" width="144">&nbsp;</td>
  </tr>
  <tr>
    <td  align=center width="209"><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="12">&nbsp;</td>
    <td  align=left valign="top" width="201"><font size=2>Director </font></td>
    <td  align=center width="10">&nbsp;</td>
    <td  align=center valign="top" width="144"><font size=2> </font></td>
  </tr>
  <tr>
    <td  align=center height="25" width="209">&nbsp;</td>
    <td  align=center height="25" width="12">&nbsp;</td>
    <td  align=left valign="top" height="25" width="201">&nbsp;</td>
    <td  align=center height="25" width="10">&nbsp;</td>
    <td  align=center valign="top" height="25" width="144">&nbsp;</td>
  </tr>
  <tr>
    <td  align=center width="209"><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="12">&nbsp;</td>
    <td  align=left valign="top" width="201"><font size=2>Director </font></td>
    <td  align=center width="10">&nbsp;</td>
    <td  align=center valign="top" width="144">&nbsp;</td>
  </tr>
  <tr>
    <td  align=center width="209">&nbsp;</td>
    <td  align=center width="12">&nbsp;</td>
    <td  align=left valign="top" width="201">&nbsp;</td>
    <td  align=center width="10">&nbsp;</td>
    <td  align=center valign="top" width="144">&nbsp;</td>
  </tr>
  <tr>
    <td  align=center width="209"><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="12">&nbsp;</td>
    <td  align=left valign="top" width="201"><font size=2>Director </font></td>
    <td  align=center width="10">&nbsp;</td>
    <td  align=center valign="top" width="144">&nbsp;</td>
  </tr>
  <tr>
    <td  align=center width="209">&nbsp;</td>
    <td  align=center width="12">&nbsp;</td>
    <td  align=left valign="top" width="201">&nbsp;</td>
    <td  align=center width="10">&nbsp;</td>
    <td  align=center valign="top" width="144">&nbsp;</td>
  </tr>
  <tr>
    <td  align=center width="209"><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="12">&nbsp;</td>
    <td  align=left valign="top" width="201"><font size=2>Director </font></td>
    <td  align=center width="10">&nbsp;</td>
    <td  align=center valign="top" width="144">&nbsp;</td>
  </tr>
  <tr>
    <td  align=center height="23" width="209">&nbsp;</td>
    <td  align=center height="23" width="12">&nbsp;</td>
    <td  align=left valign="top" height="23" width="201">&nbsp;</td>
    <td  align=center height="23" width="10">&nbsp;</td>
    <td  align=center valign="top" height="23" width="144">&nbsp;</td>
  </tr>
  <tr>
    <td  align=center width="209"><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="12">&nbsp;</td>
    <td  align=left valign="top" width="201"><font size=2>Director </font></td>
    <td  align=center width="10">&nbsp;</td>
    <td  align=center valign="top" width="144">&nbsp;</td>
  </tr>
  <tr>
    <td  align=center width="209">&nbsp;</td>
    <td  align=center width="12">&nbsp;</td>
    <td  align=left valign="top" width="201">&nbsp;</td>
    <td  align=center width="10">&nbsp;</td>
    <td  align=center valign="top" width="144">&nbsp;</td>
  </tr>
  <tr>
    <td  align=center width="209"><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="12">&nbsp;</td>
    <td  align=left valign="top" width="201"><font size=2>Director </font></td>
    <td  align=center width="10">&nbsp;</td>
    <td  align=center valign="top" width="144">&nbsp;</td>
  </tr>
  <tr>
    <td  align=center width="209">&nbsp;</td>
    <td  align=center width="12">&nbsp;</td>
    <td  align=left valign="top" width="201">&nbsp;</td>
    <td  align=center width="10">&nbsp;</td>
    <td  align=center valign="top" width="144">&nbsp;</td>
  </tr>
  <tr>
    <td  align=left width="209"><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="12">&nbsp;</td>
    <td  align=left valign="top" width="201">&nbsp;</td>
    <td  align=center width="10">&nbsp;</td>
    <td  align=center valign="top" width="144"><font size=2>&lt;R&gt;April 15,
      2004 &lt;/R&gt;</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; <!-- *************************************************************************** -->
  <!-- MARKER PAGE="sheet: 43; page: 43" -->
<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="60"><font size="2">&lt;R&gt;</font></td>
    <td width="37">&nbsp;</td>
    <td width="503">&nbsp;</td>
  </tr>
  <tr>
    <td width="60"><font size=1><b>Description</b> </font>
      <hr noshade size="1" width="55" align="left">
    </td>
    <td width="37">&nbsp;</td>
    <td width="503">&nbsp;</td>
  </tr>
  <tr>
    <td width="60" align="left"><font size="2">11</font></td>
    <td width="37" align="center"><font size="2">&#151;</font></td>
    <td width="503"><font size="2">Opinion of Sidley Austin Brown &amp; Wood, <font size="1">LLP</font>,
      Counsel for the Registrant.</font></td>
  </tr>
  <tr valign="top">
    <td width="60" align="left"><font size="2">14(a)</font></td>
    <td width="37" align="center"><font size="2">&#151;</font></td>
    <td width="503"><font size="2">Consent of Ernst &amp; Young <font size="1">LLP</font>,
      independent auditors for the Registrant. </font></td>
  </tr>
  <tr valign="top">
    <td width="60" align="left"><font size="2">14 (b)</font></td>
    <td width="37" align="center"><font size="2">&#151;</font></td>
    <td width="503"><font size="2">Consent of Deloitte &amp; Touche <font size="1">LLP</font>,
      independent auditors for MuniInsured Fund, Inc. &lt;/R&gt;</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>

</body>
</html>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-11
<SEQUENCE>3
<FILENAME>e17193ex11.htm
<DESCRIPTION>LETTER
<TEXT>
<html>
<head>
<title> </title>
</head>
<body>
<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 1; page: 1" --> <br>
<br>
<table width="600" border="0" cellspacing="0" cellpadding="0">
  <tr align="right">
    <td><font size="2"><b>Exhibit 11</b></font></td>
  </tr>
</table>
<br>
<table border="0" cellspacing="0" cellpadding="0" width="600">
  <tr align="center" valign="bottom">
    <td width="137">&nbsp;</td>
    <td width="33">&nbsp;</td>
    <td width="254"><font size="2">S<font size="1">IDLEY</font> A<font size="1">USTIN</font>
      B<font size="1">ROWN</font> &amp; W<font size="1">OOD LLP</font></font></td>
    <td width="34">&nbsp;</td>
    <td width="142">&nbsp;</td>
  </tr>
  <tr align="center" valign="bottom">
    <td width="137">&nbsp;</td>
    <td width="33">&nbsp;</td>
    <td width="254">&nbsp;</td>
    <td width="34">&nbsp;</td>
    <td width="142">&nbsp;</td>
  </tr>
  <tr align="center" valign="bottom">
    <td width="137"><font size="1">BEIJING</font></td>
    <td width="33"><font size="2">&nbsp;&nbsp;</font></td>
    <td rowspan="11" valign="top" width="254"><font size="2">787 S<font size="1">EVENTH</font>,
      A<font size="1">VENUE</font> <br>
      N<font size="1">EW</font> Y<font size="1">ORK</font>, N<font size="1">EW</font>
      Y<font size="1">ORK</font>10019 <br>
      T<font size="1">ELEPHONE</font> 212-839-5300 <br>
      F<font size="1">ACSIMILE</font> 212-839-5599 <br>
      www.sidley.com <br>
      <br>
      F<font size="1">OUNDED</font> 1866</font></td>
    <td width="34"><font size="2">&nbsp;&nbsp;</font></td>
    <td width="142"><font size="1">LOS ANGELES</font></td>
  </tr>
  <tr align="center" valign="bottom">
    <td width="137">
      <hr size="1" noshade width="75">
    </td>
    <td width="33"><font size="2"></font></td>
    <td width="34"><font size="2"></font></td>
    <td width="142">
      <hr size="1" noshade width="75">
    </td>
  </tr>
  <tr align="center" valign="bottom">
    <td width="137"><font size="1">BRUSSELS</font></td>
    <td width="33"><font size="2"></font></td>
    <td width="34"><font size="2"></font></td>
    <td width="142"><font size="1">NEW YORK</font></td>
  </tr>
  <tr align="center" valign="bottom">
    <td width="137">
      <hr size="1" noshade width="75">
    </td>
    <td width="33"><font size="2"></font></td>
    <td width="34"><font size="2"></font></td>
    <td width="142">
      <hr size="1" noshade width="75">
    </td>
  </tr>
  <tr align="center" valign="bottom">
    <td width="137"><font size="1">CHICAGO</font></td>
    <td width="33"><font size="2"></font></td>
    <td width="34"><font size="2"></font></td>
    <td width="142"><font size="1">SAN FRANCISCO</font></td>
  </tr>
  <tr align="center" valign="bottom">
    <td width="137">
      <hr size="1" noshade width="75">
    </td>
    <td width="33"><font size="2"></font></td>
    <td width="34"><font size="2"></font></td>
    <td width="142">
      <hr size="1" noshade width="75">
    </td>
  </tr>
  <tr align="center" valign="bottom">
    <td width="137"><font size="1">DALLAS</font></td>
    <td width="33"><font size="2"></font></td>
    <td width="34"><font size="2"></font></td>
    <td width="142"><font size="1">SHANGHAI</font></td>
  </tr>
  <tr align="center" valign="bottom">
    <td width="137">
      <hr size="1" noshade width="75">
    </td>
    <td width="33"><font size="2"></font></td>
    <td width="34"><font size="2"></font></td>
    <td width="142">
      <hr size="1" noshade width="75">
    </td>
  </tr>
  <tr align="center" valign="bottom">
    <td width="137"><font size="1">GENEVA</font></td>
    <td width="33"><font size="2"></font></td>
    <td width="34"><font size="2"></font></td>
    <td width="142"><font size="1">TOKYO</font></td>
  </tr>
  <tr align="center" valign="bottom">
    <td width="137">
      <hr size="1" noshade width="75">
      <font size="1"></font></td>
    <td width="33"><font size="2"></font></td>
    <td width="34"><font size="2"></font></td>
    <td width="142">
      <hr size="1" noshade width="75">
    </td>
  </tr>
  <tr align="center" valign="bottom">
    <td width="137"><font size="1">HONG KONG</font></td>
    <td width="33"><font size="2"></font></td>
    <td width="34"><font size="2"></font></td>
    <td width="142"><font size="1">WASHINGTON, D.C.</font></td>
  </tr>
  <tr align="center" valign="bottom">
    <td width="137">
      <hr size="1" noshade width="75">
    </td>
    <td width="33">&nbsp;</td>
    <td valign="top" width="254">&nbsp;</td>
    <td width="34">&nbsp;</td>
    <td width="142">&nbsp;</td>
  </tr>
  <tr align="center" valign="bottom">
    <td width="137"><font size="1">LONDON</font></td>
    <td width="33">&nbsp;</td>
    <td valign="top" width="254">&nbsp;</td>
    <td width="34">&nbsp;</td>
    <td width="142">&nbsp;</td>
  </tr>
  <tr align="center" valign="bottom">
    <td width="137">&nbsp;</td>
    <td width="33">&nbsp;</td>
    <td valign="top" width="254">&nbsp;</td>
    <td width="34">&nbsp;</td>
    <td width="142">&nbsp;</td>
  </tr>
  <tr align="center" valign="bottom">
    <td width="137"><font size="1">WRITER&#146;S DIRECT NUMBER</font></td>
    <td width="33">&nbsp;</td>
    <td valign="top" width="254">&nbsp;</td>
    <td width="34">&nbsp;</td>
    <td width="142"><font size="1">WRITER&#146;S E-MAIL ADDRESS</font></td>
  </tr>
</table>

<p>
<table width=600>
  <tr>
    <td align=right width="496">
      <p><font size=2>April __, 2004 </font></p>
    </td>
    <td align=right width="92">&nbsp;</td>
  </tr>
</table>

<p><table width=600>
  <tr align="left">
    <td>
      <p><font size=2>MuniYield Insured Fund, Inc. <br>
        800 Scudders Mill Road <br>
        Plainsboro, New Jersey 08536 <br>
        <br>
        Ladies and Gentlemen: </font></p>
    </td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have acted as
counsel for MuniYield  Insured Fund, Inc. (the &#147;Fund&#148;)  in connection with the
proposed  acquisition by the Fund of substantially all of  the assets, and the proposed
assumption by the Fund of substantially all of the  liabilities,  of MuniInsured  Fund,
Inc.  (&#147;MuniInsured&#148;),  and the simultaneous  distribution to MuniInsured of an
equal  aggregate value of newly-issued  shares  of  common  stock  of  the  Fund,  plus
cash  in  lieu  of  fractional  shares  (collectively,  the  &#147;Reorganization&#148;).
This opinion is furnished in connection  with the Fund&#146;s Registration  Statement on Form
N-14 under the Securities Act of  1933, as amended (the  &#147;Registration
Statement&#148;),  relating to shares of common  stock,  par value $0.10 per share, of
the Fund (the  &#147;Shares&#148;),  to be issued in  the Reorganization.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As counsel for the
Fund, we are familiar with the proceedings  taken by  the Fund and to be taken by the
Fund in connection  with the  authorization  and  issuance of the Shares. In addition,
we have examined and are familiar with the  Articles of Incorporation of the Fund, as
amended and supplemented,  the By-laws  of the Fund, as amended,  and such other
documents as we have deemed relevant to  the matters referred to in this opinion.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based upon the
foregoing,  we are of the opinion that subsequent to the  approval of the  Agreement and
Plan of  Reorganization,  by and between the Fund  and MuniInsured (the &#147;Agreement
and Plan&#148;),  as set forth in the proxy statement  and  prospectus  constituting a
part of the  Registration  Statement (the &#147;Proxy  Statement and Prospectus&#148;),
the Shares, upon issuance and delivery in the manner  referred to in the Agreement and
Plan,  against payment of the consideration set  forth  in  Agreement  and  Plan,  will
be  legally  issued,  fully  paid,  and  non-assessable shares of common stock of the
Fund.</font></td></tr></table>

<p><table width=600><tr><td><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We hereby  consent
to the  filing of this  opinion as an exhibit to the  Registration  Statement  and to the
use of our name in the Proxy  Statement  and  Prospectus constituting a part thereof.</font></td></tr></table>

<p>
<table width=600>
  <tr>
    <td align=right width="364">&nbsp;</td>
    <td align=left width="224"><font size=2>Very truly yours, <br>
      <br>
      /s/ Sidley Austin Brown &amp; Wood <font size="1">LLP</font> </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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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-14.A
<SEQUENCE>4
<FILENAME>e17193ex_14a.htm
<DESCRIPTION>CONSENT OF INDEPENDENT AUDITORS
<TEXT>
<html>
<head>
<title> </title>
</head>
<body>




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<p><table width=600><tr><td align=right><font size=2><B>Exhibit 14(a)</B></font></td></tr></table>





<p><table width=600><tr><td  align=center><font size=2><B>CONSENT OF INDEPENDENT AUDITORS</B></font></td></tr></table>



<p><table width=600><tr><td><font size=2>We consent to the  reference to our firm under
the  captions  &#147;Independent  Auditors&#148;,  &#147;Agreement &#150; Conditions  of
MuniInsured&#148; and  &#147;Agreement &#150; Representations  and Warranties of
MuniYield  Insured&#148; and to the incorporation by reference of our report dated
December  18, 2003 for MuniYield  Insured Fund, Inc. in the Registration  Statement (Form
N-14 Securities Act File No.  333-113433 and Investment  Company Act File No.  811-6540)
and related  Combined Proxy  Statement and Prospectus of MuniYield  Insured Fund,  Inc.
and MuniInsured  Fund, Inc., filed with the Securities and Exchange Commission.</font></td></tr></table>


<p>
<table width=600>
  <tr>
    <td width="300">&nbsp;</td>
    <td width="288"><font size=2>/s/ Ernst &amp; Young LLP </font></td>
  </tr>
</table>

<p><table width=600><tr>
    <td><font size=2>MetroPark, New Jersey <br>
      April 14, 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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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-14.B
<SEQUENCE>5
<FILENAME>e17193ex14b.htm
<DESCRIPTION>INDEPENDENT AUDITORS CONSENT
<TEXT>
<html>
<head>
<title> </title>
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<br>
<table width=600>
  <tr>
    <td>
      <div align="right"><font size=2><b>Exhibit 14(b)</b></font></div>
    </td>
  </tr>
</table>
<p>
<table width=600><tr><td><font size=2><B>INDEPENDENT AUDITORS&#146; CONSENT</B></font></td></tr></table>

<p><table width=600><tr><td><font size=2>We consent to the incorporation by reference in
this Registration Statement of  MuniYield Insured Fund, Inc. (the &#147;Fund&#148;) on
Form N-14 of our report dated  November 24, 2003 appearing in the September 30, 2003
Annual Report of  MuniInsured Fund, Inc. We also consent to the references to us under
the  captions &#147;COMPARISON OF THE FUNDS - Financial Highlights&#148; and &#147;INDEPENDENT
AUDITORS&#148; appearing in the Prospectus, which is also part of this Registration
Statement.</font></td></tr></table>




<br>
<table width=600>
  <tr>
    <td><font size=2>/s/ Deloitte &amp; Touche, <font size="1">LLP</font></font></td>
  </tr>
</table>
<p>
<table width=600><tr><td><font size=2>Princeton, New Jersey<BR>
      April 15, 2004</font></td>
  </tr></table>

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