FIRST
INVESTORS
INSURED
TAX EXEMPT
FUND, INC.
ANNUAL
REPORT
DECEMBER 31, 1996
Vertically reading from bottom to top in the center of the page the words
"FIRST INVESTORS" appear.
The following appears in a box to the left of the above language:
First Investors Logo (as described above)
NEED SERVICE?
If you have questions about your account...or would like information regarding
other products or services...please contact your representative or call our
Shareholder Services Department at...
(800) 423-4026
The following appears in a box within the above box:
Our business is...putting investors first
The following appears on the bottom lefthand side:
FITE113
Portfolio Manager's Letter
FIRST INVESTORS INSURED TAX EXEMPT FUND, INC.
Dear Investor:
The current economic expansion extended to its fifth year in 1996.
The economy grew by 3.4% during the year with the core rate of
consumer price inflation increasing 2.6%, its slowest pace since the
mid-1960's. The combination of moderate growth and low inflation
provided a positive background for the financial markets. The broad
stock market averages made new highs in 1996 while long-term interest
rates moved somewhat higher during the year. Besides the economy, the
markets benefited from strong demand for U.S. securities. Individual
investors bought a record amount of stock mutual funds, while foreign
investors bought a record amount of U.S. Treasury bonds.
Long-term municipal bond prices fell slightly during 1996. The
municipal bond market's performance compares very favorably to the
Treasury bond market where long-term bond prices fell substantially.
The municipal bond market's relatively strong performance during 1996
was attributable to the comparatively cheap levels at which the
market began the year, due to concerns over potential tax reform. As
those concerns disappeared, demand for tax-exempt bonds increased and
municipal bonds appreciated versus Treasury bonds. In fact, broad
based demand throughout the year from individuals and insurance
companies was sufficient to absorb $183 billion of new issue supply.
During 1996, First Investors Insured Tax Exempt Fund Class A shares
had a total return on a net asset value basis of 2.8%. The return is
comparable to the average return of 2.8% for insured municipal bond
funds reported by Lipper Analytical Services, Inc. Class B shares
returned 2.0%. For 1996, the Fund declared dividends from investment
income of 50.7 cents per Class A share and 43.9 cents per Class B
share.
Management of the Fund has focused on providing competitive total
return and a high level of current income which is exempt from
federal income tax. To meet these objectives, the Fund has been
accumulating high coupon noncallable bonds over the past several
years. Most municipal bonds can be called (or paid-off before
maturity) by their issuer. The call feature decreases the amount a
bond's price can increase when the bond market rallies and increases
the amount a bond's price can decline when the market falls.
Noncallable bonds in contrast offer better price (or total return)
performance than callable bonds, while the high coupon offers a high
level of current income. At the close of 1996, approximately two
thirds of the Fund's assets were invested in noncallable bonds.
In terms of sector and credit concerns, the Fund continues to
maintain an underweighted position in California debt with only 3.25%
of assets invested in bonds issued by the State of California and its
municipalities. At the November election, California voters passed
Proposition 218, which limits the ability of local governments to
impose or increase certain revenues. In combination with earlier
propositions, Proposition 218 creates credit uncertainties in
California that have led the Fund to seek investments elsewhere.
Investors who buy bond funds -- whether for income or total return --
should be aware that the value of their investment fluctuates as
interest rates change. For example, a 1% increase in yield on a ten
year bond results in roughly a 7% decrease in that bond's price. In
each of the last five years, ten year Treasury bond yields have moved
more than 1%. In addition, while the Fund's municipal bonds are
insured as to timely payment of principal and interest, this
insurance does not protect the bonds against changes in market value.
Investors should be aware of these risks and recognize that
successful investing generally requires a long-term commitment to the
market.
Looking forward, the factors that benefited the markets in 1996
appear likely to continue in 1997: moderate growth, low inflation,
and strong demand for financial assets. A significant risk to the
market is that inflation may increase due to the length of the
economic expansion. This could lead the Federal Reserve to raise
interest rates, hurting both the bond and stock markets. On the other
hand, the markets may be positively surprised by legislation from the
President and Congress to eliminate the federal budget deficit. We
will continue to be alert to events that may affect the value of your
investments.
As always, we appreciate the opportunity to serve your investment
needs.
Sincerely,
/S/Clark D. Wagner
Clark D. Wagner
Chief Investment Officer
and Portfolio Manager
January 31, 1997
Cumulative Peformance Information
FIRST INVESTORS TAX EXEMPT FUND, INC.
As of December 31, 1996
Comparison of change in value of $10,000 investment in the First
Investors Insured Tax Exempt Fund, Inc. (Class A shares) and the
Lehman Brothers Municipal Bond Index.
The following table is the source data for the line chart which
appears at this point in the printed document. This table is not part
of the original printed document and is shown for reference only.
The same is also true for this descriptive paragraph.
TAX EXEMPT LEHMAN
JAN 1987 9,375 10,000
DEC 1987 9,581 10,150
DEC 1988 10,608 11,180
DEC 1989 11,511 12,386
DEC 1990 12,241 13,289
DEC 1991 13,496 14,903
DEC 1992 14,569 16,217
DEC 1993 16,009 18,207
DEC 1994 15,110 17,266
DEC 1995 17,530 20,303
DEC 1996 18,023 21,166
**BOXED INFORMATION INSIDE GRAPH
Average Annual Total Return*
Class A shares N.A.V. Only S.E.C. Standardized
One Year 2.81% (3.60)%
Five Years 5.98% 4.62%
Ten Years 6.76% 6.07%
S.E.C. 30-Day Yield 3.95%
Class B shares
One Year 2.03% (2.04)%
Since Inception
(1/12/95) 8.10% 5.86%
S.E.C. 30-Day Yield 3.53%
The graph compares a $10,000 investment made in the First Investors
Insured Tax Exempt Fund, Inc. (Class A shares) on 1/1/87 with a
theoretical investment in the Lehman Brothers Municipal Bond Index.
The Lehman Brothers Municipal Bond Index is a total return
performance benchmark for the long-term investment grade tax exempt
bond market. Returns and attributes for the Index are calculated
semi-monthly using approximately 21,000 municipal bonds which are
priced by Muller Data Corp. The Index does not take into account fees
and expenses or cost of insurance of the bonds held by an insured
tax-exempt bond fund. It is not possible to invest directly in the
Lehman Brothers Municipal Bond Index. For purposes of the graph and
the accompanying table, unless otherwise indicated, it has been
assumed that the maximum sales charge was deducted from the initial
$10,000 investment in the Fund and all dividends and distributions
were reinvested. Class B shares performance may be greater than or
less than that shown in the line graph above based on differences in
sales loads and fees paid by shareholders investing in the different
classes.
* Average Annual Total Return figures (for the period ended 12/31/96)
include the reinvestment of all dividends and distributions. "N.A.V.
Only" returns are calculated without sales charges. The "S.E.C.
Standardized" returns shown are based on the maximum sales charge of
6.25% (prior to 7/1/93 and 12/29/89, the maximum sales charges were
6.9% and 7.25%, respectively). The Class B "S.E.C. Standardized"
return is adjusted for the applicable deferred sales charge (maximum
of 4% in the first year). Results represent past performance and do
not indicate future results. Investment return and principal value of
an investment will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than the original cost. Lehman
Brothers Municipal Bond Index figures from Lehman Brothers Inc. and
all other figures from First Investors Management Company, Inc.
<TABLE>
<CAPTION>
Portfolio of Investments
FIRST INVESTORS INSURED TAX EXEMPT FUND, INC.
December 31, 1996
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL BONDS--99.0%
Alaska--.4%
$8,000 M North Slope Boro, Alaska General Obligation Zero Coupon 6/30/2005 $5,170,000 $41
- ----------------------------------------------------------------------------------------------------------------
Arizona--.8%
8,550 M Arizona State Municipal Financing Program Ctfs. of Partn. 7.7% 8/1/2010 10,014,187 80
- ----------------------------------------------------------------------------------------------------------------
California--3.2%
2,835 M California Public Capital Improv. Fin. Auth. 8.1% 3/1/2018 2,983,837 24
4,750 M California State Public Works Board Lease Rev. Dept. of Corrections
5% 12/1/2019 4,435,312 35
4,220 M Long Beach Finance Authority 6% 11/1/2017 4,557,600 36
10,000 M San Francisco City & County Redev. Agcy. 6 3/4% 7/1/2025 11,050,000 88
5,000 M San Jose Redevelopment Agency Tax Allocation 6% 8/1/2015 5,356,250 43
5,000 M Santa Clara County Financing Authority 7 3/4% 11/15/2010 6,243,750 50
5,520 M South Orange County Public Financing Authority 6 1/2% 8/15/2010 6,237,600 49
- ----------------------------------------------------------------------------------------------------------------
40,864,349 325
- ----------------------------------------------------------------------------------------------------------------
Colorado--.2%
1,850 M Aurora Municipal Building Corp. 9.2% 12/1/1997* 1,959,002 16
- ----------------------------------------------------------------------------------------------------------------
Connecticut--2.0%
Connecticut Special Tax Obligation Revenue:
13,500 M 6 1/2% 10/1/2011 15,221,250 121
9,000 M 6 1/8% 9/1/2012 9,776,250 78
- ----------------------------------------------------------------------------------------------------------------
24,997,500 199
- ----------------------------------------------------------------------------------------------------------------
Delaware--.6%
7,000 M Delaware State Econ. Dev. Auth. Rev. Pollution Control 7.15% 7/1/2018 7,857,500 63
District of Columbia--2.5%
Washington D.C. General Obligation:
10,530 M Series "C" 8% 6/1/1998* 11,267,100 90
5,800 M Series "A" 6 1/2% 6/1/2009 6,546,750 52
13,255 M Series "E" 6% 6/1/2012 13,602,944 108
- ----------------------------------------------------------------------------------------------------------------
Florida--4.9%
$2,255 M Dade County Spec. Oblig. (Miami Beach Conv. Ctr.) $2,397,245 $19
8 5/8% 12/1/1997*
Escambia County Utilities Authority:
5,485 M 6 1/4% 1/1/2012 5,999,219 48
5,360 M 6 1/4% 1/1/2013 5,869,200 47
1,070 M Florida Hsg. Fin. Agy. Residential Mtge. Rev. (Series 2) 8% 12/15/2016 1,107,450 9
10,000 M Lakeland, Florida Electric & Water Revenue 6% 10/1/2012 10,737,500 86
Orange County Health Facilities:
4,500 M Orlando Regional Healthcare 6 1/4% 10/1/2021 4,916,250 39
8,350 M Pooled Hosp. Ln. Prog. - Series "A" 7 7/8% 12/1/2025 8,651,936 69
7,685 M Pooled Hosp. Ln. Prog. - Series "B" 7 7/8% 12/1/2025 7,954,282 63
1,750 M Palm Beach County Solid Waste Authority 8 3/8% 7/1/2010 1,837,430 15
Sunrise Utilities System Revenue:
1,500 M 10 1/4% 10/1/2000* 1,800,000 14
1,500 M 10 3/4% 10/1/2000* 1,824,375 14
5,975 M Tampa Utilities Tax & Spl. Rev. 8 1/8% 10/1/1997* 6,287,791 50
1,395 M West Coast Regional Water Supply Auth. 10.4% 10/1/2010* 1,907,663 15
- ----------------------------------------------------------------------------------------------------------------
61,290,341 488
- ----------------------------------------------------------------------------------------------------------------
Georgia--7.1%
6,115 M Fulton County Water & Sewer Revenue 6 3/8% 1/1/2014 6,787,650 54
Georgia Municipal Electric Authority Power Revenue:
14,000 M 8 1/8% 1/1/1998* 14,751,940 118
5,000 M 6 1/4% 1/1/2012 5,481,250 44
Metropolitan Atlanta Rapid Transit Authority:
20,450 M 6 1/4% 7/1/2011 22,622,813 180
28,605 M 6% 7/1/2013 30,678,863 244
7,500 M 6 3/4% 7/1/2013 8,540,625 68
- ----------------------------------------------------------------------------------------------------------------
88,863,141 708
Hawaii--1.5%
Hawaii State General Obligation:
$5,500 M 6% 10/1/2009 $5,975,090 $47
6,000 M 6% 10/1/2010 6,515,640 52
6,000 M Honolulu General Obligation 5 3/4% 4/1/2012 6,266,400 50
18,757,130 149
Illinois--12.9%
Chicago Board of Education Lease Certificates:
5,000 M 6% 1/1/2016 5,281,250 42
29,200 M 6% 1/1/2020 30,806,000 245
Chicago General Obligation:
7,000 M 6% 1/1/2010 7,393,750 59
16,660 M 6 1/8% 1/1/2016 17,326,400 138
Chicago O'Hare International Airport Revenue:
14,570 M 6 3/8% 1/1/2012 15,589,900 124
10,000 M 6 3/8% 1/1/2015 10,662,500 85
3,340 M Chicago Public Building Commission Building Revenue 3,628,075 29
7 3/4% 1/1/1999*
2,500 M Des Plaines Hosp. Facs. (Holy Family Hosp.) 9 1/4% 1/1/2014 2,542,350 20
2,800 M Hazel Crest Hosp. Facs. Rev. (South Sub. Proj.) 9 1/8% 7/1/1997* 2,930,984 23
16,750 M Illinois Development Finance Auth. Poll. Control Rev.
6 3/4% 3/1/2015 18,362,188 146
Illinois Development Finance Authority Rev. (Rockford School 205):
3,400 M 6.55% 2/1/2009 3,799,500 30
5,000 M 6.6% 2/1/2010 5,625,000 45
3,000 M 6.65% 2/1/2011 3,390,000 27
Illinois Health Facilities Authority Revenue:
4,300 M Bromenn Healthcare Project 8% 7/15/1998* 4,644,000 37
1,000 M Methodist Medical Center 9 5/8% 10/1/2010 1,014,150 8
2,600 M SSM Health Care Project Series "B" 8% 6/1/1998* 2,788,500 22
4,000 M University of Chicago Hospital 8.1% 8/1/1997* 4,182,280 33
1,750 M Lansing Sales Tax Rfdg. 7.7% 12/1/1998* 1,868,125 15
16,500 M Metropolitan Pier & Exposition Auth. Tax Rev. Zero Cpn. 12/15/2011 7,095,000 57
$4,000 M Regional Transportation Authority 7 3/4% 6/1/2019 $5,145,000 $41
Will County School District General Obligation:
3,600 M 7% 12/1/2007 4,194,000 34
2,080 M 7.05% 12/1/2008 2,436,200 20
1,175 M 7.1% 12/1/2009 1,382,094 11
- ----------------------------------------------------------------------------------------------------------------
162,087,246 1,291
- ----------------------------------------------------------------------------------------------------------------
Indiana--1.0%
4,070 M Delaware County Hosp. Auth. (Ball Memorial Hosp.) 6 5/8% 8/1/2006 4,415,950 35
4,205 M Indiana Housing Fin. Auth. Single-Family Mtge. Rev. 7.6% 1/1/2016 4,420,506 35
2,000 M Indiana State Edl. Facs. Auth. (Butler University) 8% 11/1/1998* 2,172,500 17
1,000 M Muncie Certificates of Participation 8.1% 2/1/1998* 1,054,750 9
- ----------------------------------------------------------------------------------------------------------------
12,063,706 96
- ----------------------------------------------------------------------------------------------------------------
Louisiana--4.9%
1,030 M Bossier County Public Impt. Sales & Use Tax Rev. 9 1/4% 11/1/1997* 1,091,048 9
2,000 M Calcasieu Parish Mem. Hosp. (Lake Charles Hosp.) 8.4% 12/1/1997* 2,122,200 17
Louisiana Public Facilities Authority Hospital Revenue:
2,350 M Touro Infirmary 8% 6/1/1998* 2,520,375 20
2,400 M Womens Hospital Foundation 8 1/8% 10/1/1998* 2,604,000 21
Louisiana Public Facilities Hlth. & Ed. Cap. Fac.:
5,770 M CP Program 7.9% 12/1/2015 6,217,175 50
1,750 M Our Lady of the Lake 8.2% 12/1/1998* 1,896,563 15
Louisiana State General Obligation:
8,050 M 6.1% 5/1/2010 8,472,625 67
14,555 M 6% 5/1/2012 15,191,781 121
14,000 M 6% 5/1/2014 14,612,500 116
15,000 M New Orleans Regional Transit Auth. Sales Tax Rev. 3,506,250
Zero Coupon 12/1/2021 28
3,000 M Regional Transportation Authority Revenue 8% 12/1/2013 3,243,750 26
- ----------------------------------------------------------------------------------------------------------------
61,478,267 490
- ----------------------------------------------------------------------------------------------------------------
Maryland--.4%
$5,000 M Maryland Indl. Dev. Auth. 5.928% 8/26/2022 $5,212,500 $42
- ----------------------------------------------------------------------------------------------------------------
Massachusetts--8.0%
4,750 M Boston General Obligation 7 3/8% 2/1/2000* 5,242,813 42
10,025 M Boston, Mass. Water & Sewer 5 3/4% 11/1/2013 10,413,469 83
2,300 M Mass. Bay Transportation Authority Ctfs. of Partn. 7.65% 8/1/2000* 2,593,250 20
Mass. Bay Transportation Authority Gen. Sys. Rev.:
9,080 M 5.8% 3/1/2012 9,534,000 76
10,775 M 5.8% 3/1/2013 11,273,344 90
10,000 M 5 7/8% 3/1/2015 10,525,000 84
Mass. Health & Educational Facilities Authority:
2,300 M Berkshire Health Systems 7.6% 10/1/1998* 2,481,125 20
1,500 M Carney Hospital 7 3/4% 7/1/2000* 1,691,250 13
Mass. Housing Finance Agency:
6,610 M 6% 12/1/2012 6,750,462 54
1,540 M 7.7% 6/1/2017 1,615,075 13
Mass. State General Obligation:
20,550 M 6% 8/1/2009 22,219,687 177
15,605 M 5 1/8% 11/1/2014 15,078,331 120
1,000 M Palmer General Obligation 7.3% 3/1/2000* 1,105,000 9
- ----------------------------------------------------------------------------------------------------------------
100,522,806 801
- ----------------------------------------------------------------------------------------------------------------
Michigan--2.1%
10,000 M Michigan State General Obligation 6 1/4% 11/1/2012 11,019,100 88
Michigan State Housing Development Auth. Single-Family Mtge. Rev.:
4,685 M 7 1/2% 6/1/2015 4,872,400 39
2,500 M 7.3% 12/1/2016 2,590,625 20
2,135 M 7.7% 12/1/2016 2,225,738 18
4,500 M Monroe County Econ. Dev. Corp. (Detroit Edison Co.) 6.95% 9/1/2022 5,400,000 43
- ----------------------------------------------------------------------------------------------------------------
26,107,863 208
- ----------------------------------------------------------------------------------------------------------------
Minnesota--.6%
$1,295 M Eden Prairie Multi-Family Housing 8% 7/1/2026 $1,364,606 $11
1,240 M St. Paul Hsg. & Red. Auth. (Como-Lake Proj.)
7 1/2% 3/1/2026 (Defaulted) (Note 1A) 1,240,000 10
4,945 M University of Minnesota Series "A" 5 3/4% 7/1/2017 5,111,894 40
- ----------------------------------------------------------------------------------------------------------------
7,716,500 61
Mississippi--.5%
4,475 M Mississippi Hosp. Equip. & Facs. Auth. Rev. (Baptist Med. Ctr.)
7.6% 5/1/2000* 5,006,406 40
1,360 M Mississippi Hsg. Fin. Corp. Single-Family Mtge. Rev.
7.8% 10/15/2016 1,399,100 11
- ----------------------------------------------------------------------------------------------------------------
6,405,506 51
- ----------------------------------------------------------------------------------------------------------------
Missouri--2.6%
3,640 M Kansas City School District Bldg. Cap. Improvement 7.9% 2/1/1998* 3,872,669 31
Missouri State Health & Educational Facilities Authority:
BJC Health System Series "A":
6,840 M 6 3/4% 5/15/2010 7,831,800 62
10,175 M 6 3/4% 5/15/2011 11,663,094 93
10,000 M Lester Cox Zero Coupon 9/1/2016 3,262,500 26
5,245 M SSM Health Care 6 1/4% 6/1/2007 5,625,262 45
- ----------------------------------------------------------------------------------------------------------------
32,255,325 257
- ----------------------------------------------------------------------------------------------------------------
Nevada--.2%
1,640 M Nevada Housing Div. Single-Family Prog. 7.6% 10/1/2018 1,715,850 14
1,155 M Reno Hosp. Rev. (St. Mary's Hospital) 7 3/4% 1/1/2000* 1,283,494 10
- ----------------------------------------------------------------------------------------------------------------
2,999,344 24
- ----------------------------------------------------------------------------------------------------------------
New Jersey--2.9%
Camden County Municipal Utilities Sewer Revenue:
4,300 M 8 1/4% 12/1/1997* 4,561,053 36
2,820 M 8 1/4% 12/1/2017 2,981,022 24
10,500 M New Jersey Economic Development Auth. Market Trans. Fac. Rev.
5 7/8% 7/1/2011 10,854,375 86
New Jersey Housing & Mortgage Financing Revenue:
$5,380 M 7 1/2% 4/1/2015 $5,702,800 $45
8,400 M 7 3/8% 10/1/2017 8,736,000 70
4,195 M 8.1% 10/1/2017 4,389,019 35
- ----------------------------------------------------------------------------------------------------------------
37,224,269 296
- ----------------------------------------------------------------------------------------------------------------
New Mexico--.4%
1,000 M Farmington Power Rev. Gen. Dev. 9 7/8% 7/1/2005* 1,308,750 11
New Mexico Mortgage Finance Authority, Single-Family Mortgage:
3,075 M 8% 1/1/2017 3,180,719 25
1,020 M 8 5/8% 7/1/2017 1,055,037 8
- ----------------------------------------------------------------------------------------------------------------
5,544,506 44
- ----------------------------------------------------------------------------------------------------------------
New York--9.2%
Metropolitan Transit Authority, Transit Facilities:
10,000 M 8% 7/1/1998* 10,762,500 86
3,500 M 7 1/2% 7/1/2000* 3,845,625 31
New York City General Obligation:
10,000 M Series "A" 8 3/4% 11/1/1997* 10,561,100 84
5,000 M Series "B" 7 3/4% 2/1/1998* 5,282,300 42
3,850 M Series "A" 8% 8/1/1998* 4,138,750 33
22,250 M New York City Municipal Water Finance Auth. Rev. 6% 6/15/2021 23,724,062 189
4,500 M New York State Dorm. Auth. Revs. City Univ. System 7 1/2% 7/1/2000* 5,040,000 40
New York State Dorm. Auth. Revs. State Univ. System:
2,780 M 7 1/4% 5/15/2000* 3,082,325 25
11,300 M 7 3/8% 5/15/2014 12,444,125 99
5,000 M New York State General Obligation 6% 6/15/2011 5,231,250 42
6,500 M New York State Housing Finance Agency Rev. 5 7/8% 11/1/2010 6,662,500 53
New York State Med. Care Facs. Fin. Agcy. Rev.:
2,020 M Hosp. & Nursing 7.35% 2/15/2029 2,189,175 17
10,500 M St. Luke's Hosp. 7.45% 2/15/2000* 11,641,875 93
$4,000 M New York State Urban Dev. Corp. 7 1/2% 1/1/2000* $4,425,000 $35
5,840 M Suffolk County, N.Y. Indl. Dev. Agcy. Southwest Sewer Sys.
6% 2/1/2008 6,329,100 50
- ----------------------------------------------------------------------------------------------------------------
115,359,687 919
- ----------------------------------------------------------------------------------------------------------------
North Carolina--1.5%
North Carolina Municipal Power Agency (Catawba):
8,950 M 6% 1/1/2010 9,632,437 77
8,945 M 6% 1/1/2011 9,627,056 76
19,259,493 153
- ----------------------------------------------------------------------------------------------------------------
North Dakota--1.0%
10,500 M Mercer County Poll. Ctrl. Rev. (Basin Elec. Pwr. Coop.)
7.2% 6/30/2013 12,468,750 99
- ----------------------------------------------------------------------------------------------------------------
Ohio--.1%
1,435 M Ohio State Air Quality Dev. Auth. (Ohio Power Co.) 7.4% 8/1/2009 1,522,894 12
- ----------------------------------------------------------------------------------------------------------------
Oklahoma--3.1%
Grand River Dam Authority Revenue:
9,000 M 5 3/4% 6/1/2008 9,585,000 76
13,000 M 6 1/4% 6/1/2011 14,365,000 115
12,000 M 5 1/2% 6/1/2013 12,225,000 97
1,220 M Muskogee County Home Fin. Auth. Single-Family Mtge. 10
7.6% 12/1/2010 1,262,700
1,420 M Tulsa County Home Fin. Auth. Single-Family Mtge. 7.35% 11/1/2010 1,501,650 12
- ----------------------------------------------------------------------------------------------------------------
38,939,350 310
- ----------------------------------------------------------------------------------------------------------------
Pennsylvania--2.5%
1,140 M Allegheny County Rev. Fin. Auth. Mtge. Single-Family
Mtge. 8% 6/1/2017 1,178,475 10
5,000 M Pennsylvania State General Obligation 6 3/4% 11/15/2013 5,556,250 44
12,050 M Pittsburgh Water & Sewer Authority 6 1/2% 9/1/2013 13,571,312 108
1,000 M Sewickely Valley Hosp. Auth. (Sewickely Vy. Hosp.)
7 1/2% 10/1/1999* 1,100,000 9
- ----------------------------------------------------------------------------------------------------------------
Westmoreland County Municipal Authority Municipal Services Revenue:
$10,800 M Zero Coupon 8/15/2018 $3,145,500 $25
8,880 M Zero Coupon 8/15/2019 2,442,000 20
5,880 M Zero Coupon 8/15/2020 1,528,800 12
5,880 M Zero Coupon 8/15/2021 1,440,600 11
5,000 M Zero Coupon 8/15/2022 1,156,250 9
- ----------------------------------------------------------------------------------------------------------------
31,119,187 248
- ----------------------------------------------------------------------------------------------------------------
Puerto Rico--.8%
Puerto Rico Commonwealth Highway & Transportation Authority Revenue:
4,510 M 6 1/4% 7/1/2013 4,977,913 40
4,250 M 6 1/4% 7/1/2015 4,696,250 37
- ----------------------------------------------------------------------------------------------------------------
9,674,163 77
- ----------------------------------------------------------------------------------------------------------------
Rhode Island--.4%
Rhode Island Housing & Mortgage Finance Corp.:
1,000 M 8 3/8% 10/1/2013 1,035,000 8
1,500 M 8 3/8% 10/1/2016 1,552,500 12
2,190 M 8 3/8% 4/1/2019 2,266,650 18
- ----------------------------------------------------------------------------------------------------------------
4,854,150 38
- ----------------------------------------------------------------------------------------------------------------
South Dakota--.4%
4,485 M South Dakota Health & Edl. Facs. Auth. (McKennan Hosp.)
7 5/8% 7/1/2014 4,911,075 39
- ----------------------------------------------------------------------------------------------------------------
Texas--12.8%
Austin, Texas Utilities System Revenue:
5,120 M Series "A" 7.8% 11/15/1998* 5,555,200 44
4,280 M Series "B" 7.8% 11/15/1998* 4,627,750 37
3,000 M 8 5/8% 5/15/2002* 3,558,750 28
16,000 M 6% 11/15/2013 17,080,000 136
30,465 M Zero Coupon 5/15/2018 9,025,256 72
29,410 M Zero Coupon 5/15/2019 8,234,800 66
$5,000 M Bexar County, Texas Health Facs. (Baptist Memorial)
6 3/4% 8/15/2019 $5,543,750 $44
10,000 M Brazos River Auth., Houston Light & Power Proj. 8.1% 5/1/2019 10,662,500 85
9,215 M Coastal Water Auth. Water Conveyance System 8 1/8% 12/15/1997* 9,597,330 76
Harris County Toll Road Senior Lien:
3,355 M Series "B" 6 5/8% 8/15/1997* 3,485,174 28
8,375 M Series "A" 6 1/2% 8/15/2002* 9,285,781 74
11,065 M Series "A" 6 1/2% 8/15/2012 12,411,832 99
7,305 M Series "A" 6 1/2% 8/15/2013 8,186,787 65
Houston Water Conveyance System Certificates of Participation:
2,250 M 6 1/4% 12/15/2012 2,469,375 20
4,705 M 6 1/4% 12/15/2013 5,157,856 41
4,350 M 6 1/4% 12/15/2014 4,779,563 38
5,860 M 6 1/4% 12/15/2015 6,424,025 51
2,750 M Kerrville Electric System Rev. 8 3/8% 11/1/1997* 2,908,263 23
North Central Texas Hlth. Fac. Dev. Corp. (Presbyterian Healthcare):
1,000 M Series "A" 8 7/8% 12/1/1997* 1,065,750 8
3,720 M Series "B" 8 7/8% 12/1/1997* 3,964,590 32
1,500 M Northeast Hospital Auth. Rev. (Northeast Med. Ctr. Hosp.)
8 1/8% 7/1/1998* 1,616,250 13
Rio Grande Valley Hlth. Fac. Dev. Corp. (Valley Baptist Med. Ctr.):
3,910 M 8% 8/1/1998* 4,217,912 34
5,300 M 6.4% 8/1/2012 5,598,125 45
San Antonio Electric & Gas Revenue:
3,000 M 8% 2/1/1998* 3,189,960 25
1,850 M 10 1/2% 2/1/1998* 2,014,132 16
1,800 M Texas Health Facs. Dev. Corp. (Fort Worth Med. Ctr.) 8 1/8% 6/1/1998* 1,935,000 15
5,000 M Texas Public Fin. Auth. 6.2% 2/1/2005 5,462,500 44
2,700 M Texas Public Ppty. Fin. Corp. Rev. (Mental Health & Retardation)
7 7/8% 1/1/1998* 2,808,135 22
- ----------------------------------------------------------------------------------------------------------------
160,866,346 1,281
- ----------------------------------------------------------------------------------------------------------------
Utah--1.1%
Intermountain Power Agency (Utah Power Supply):
$4,000 M Series "C" 8 3/8% 7/1/1997* $4,172,760 $34
2,500 M Series "D" 8 3/8% 7/1/1997* 2,608,600 21
2,000 M Provo, Utah Electric System Revenue 10 3/8% 9/15/2015 2,737,500 22
Salt Lake County Water Conservancy District Revenue:
3,800 M Zero Coupon 10/1/2011 1,667,250 13
3,800 M Zero Coupon 10/1/2012 1,543,750 12
3,760 M Zero Coupon 10/1/2013 1,428,800 11
- ----------------------------------------------------------------------------------------------------------------
14,158,660 113
- ----------------------------------------------------------------------------------------------------------------
Virginia--1.0%
11,000 M Hanover County Indl. Dev. Auth. (Mem. Regl. Med. Ctr. Proj.)
6 3/8% 8/15/2018 12,127,500 97
- ----------------------------------------------------------------------------------------------------------------
Washington--2.5%
2,545 M Benton County Public Utilities District #001 11 5/8% 11/1/1997* 2,707,091 22
5,000 M Tacoma Electric System Revenue 8% 1/1/1998* 5,300,200 42
Washington Public Power Supply System:
5,000 M Project No. 2 - 7 3/8% 7/1/2000* 5,568,750 44
4,960 M Project No. 2 - 7 3/8% 1/1/2001* 5,555,200 44
934 M Project Nos. 4 & 5 - 8 1/2% 7/1/2017 (Defaulted) (Note 1A) 934,080 7
5,000 M Washington State General Obligation 6.4% 6/1/2017 5,573,600 45
2,500 M Washington State Hlth. & Educ. Facs. (Mason Med. Ctr.) 8% 7/1/2015 2,596,425 21
2,940 M Washington State Hsg. Fin. Comm. Single-Family Mtge. 7.7% 7/1/2016 3,064,950 24
- ----------------------------------------------------------------------------------------------------------------
31,300,296 249
- ----------------------------------------------------------------------------------------------------------------
West Virginia--.4%
3,610 M West Virginia State General Obligation Series "D" 6 1/2% 11/1/2026 4,056,738 32
1,050 M West Virginia State Hosp. Fin. Auth. (Monongalia Hosp.)
8 1/2% 7/1/1997* 1,075,326 9
- ----------------------------------------------------------------------------------------------------------------
5,132,064 41
- ----------------------------------------------------------------------------------------------------------------
Wisconsin--2.5%
$5,000 M Superior, Wisconsin Limited Obligation Rev. (Midwest Energy)
6.9% 8/1/2021 $5,906,250 $47
Wisconsin Housing & Economic Development Authority:
1,435 M 7 1/2% 9/1/2017 1,476,256 12
4,145 M 7.6% 9/1/2017 4,315,981 34
13,460 M 7 3/4% 9/1/2017 14,065,700 112
1,545 M Wisconsin Municipal Insurance Comm. Rev. 8.7% 4/1/2007 1,591,304 13
Wisconsin State Health & Educational Facilities Authority Revenue:
2,000 M Hospital Sisters Services Inc. 7 5/8% 11/15/1998* 2,162,500 17
1,500 M Novus Health Group 8% 6/1/1998* 1,633,125 13
- ----------------------------------------------------------------------------------------------------------------
31,151,116 248
- ----------------------------------------------------------------------------------------------------------------
Total Value of Municipal Bonds (cost $1,151,810,064) 1,243,652,513 9,904
- ----------------------------------------------------------------------------------------------------------------
SHORT-TERM TAX EXEMPT INVESTMENTS--.1%
Pennsylvania
100 M Sayre Health Care Facs. Auth. Rev. Adjustable
Rate Note (4.00%)** (cost $100,000) 100,000 1
- ----------------------------------------------------------------------------------------------------------------
Total Value of Municipal Investments (cost $100,000) 99.1% 1,243,752,513 9905
Other Assets, Less Liabilities .9% 11,901,160 95
- ----------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $1,255,653,673 $10,000
================================================================================================================
* Municipal Bonds which have been prerefunded are shown maturing at the prerefunded call date.
** Interest rates on Adjustable Rate Notes are determined and reset weekly by the issuer.
Interest rate shown is the rate in effect at December 31, 1996.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of Assets and Liabilities
FIRST INVESTORS INSURED TAX EXEMPT FUND, INC.
December 31, 1996
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Investments in securities, at value
(identified cost $1,151,910,064)
(Note 1A) $1,243,752,513
Cash 1,527,965
Receivables:
Interest $ 22,389,833
Investment securities sold 785,000
Capital shares sold 302,739 23,477,572
--------------
Other assets 81,732
--------------
Total Assets 1,268,839,782
Liabilities
Payables:
Investment securities purchased 9,568,857
Capital shares redeemed 1,250,381
Cash portion of dividend payable January 10, 1997 1,196,821
Accrued advisory fee 728,752
Accrued expenses 441,298
--------------
Total Liabilities 13,186,109
--------------
Net Assets (Note 4):
Class A (123,578,566 shares outstanding) 1,252,608,141
Class B (300,522 shares outstanding) 3,045,532 $1,255,653,673
-------------- ==============
Net Assets Consist of:
Capital paid in $1,177,607,596
Undistributed net investment income 600,831
Accumulated net realized loss on investment transactions (14,397,203)
Net unrealized appreciation in value of investments 91,842,449
--------------
Total $1,255,653,673
==============
Net asset value and redemption price per share--Class A $10.14
======
Maximum offering price per share--Class A ($10.14/.9375)* $10.82
======
Net asset value and offering price per share--Class B $10.13
======
* On purchases of $25,000 or more, the sales charge is reduced.
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statement of Operations
FIRST INVESTORS INSURED TAX EXEMPT FUND, INC.
Year Ended December 31, 1996
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Investment Income
Interest income $ 79,994,254
Expenses (Notes 1 and 3):
Advisory fee $ 8,971,924
Distribution plan expenses--Class A 3,820,500
Distribution plan expenses--Class B 25,939
Shareholder servicing costs 1,011,863
Bond insurance premiums 249,911
Custodian fees 99,029
Professional fees 91,436
Reports and notices to shareholders 84,148
Other expenses 357,411
------------
Total expenses 14,712,161
Less: Custodian fees paid indirectly 63,739
------------
Net expenses 14,648,422
------------
Net investment income 65,345,832
Realized and Unrealized Gain (Loss) on Investments (Note 2):
Net realized loss on investments (520,841)
Net unrealized depreciation of investments (32,059,622)
------------
Net loss on investments (32,580,463)
------------
Net Increase in Net Assets Resulting from Operations $ 32,765,369
============
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
FIRST INVESTORS INSURED TAX EXEMPT FUND, INC.
- ------------------------------------------------------------------------------------------------------
Year Ended December 31 1996 1995
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (Decrease) in Net Assets from Operations
Net investment income $ 65,345,832 $ 70,942,841
Net realized gain (loss) on investments (520,841) 8,136,087
Net unrealized appreciation (depreciation) of investments (32,059,622) 122,110,841
-------------- --------------
Net increase in net assets resulting from operations 32,765,369 201,189,769
-------------- --------------
Dividends to Shareholders from:
Net investment income--Class A (64,864,256) (71,159,718)
Net investment income--Class B (113,228) (44,535)
-------------- --------------
Total dividends (64,977,484) (71,204,253)
-------------- --------------
Capital Share Transactions (a)
Class A:
Proceeds from shares sold 41,005,690 68,618,192
Value of dividends reinvested 50,176,505 55,351,361
Cost of shares redeemed (179,154,717) (182,664,583)
-------------- --------------
(87,972,522) (58,695,030)
-------------- --------------
Class B:
Proceeds from shares sold 1,664,703 2,088,764
Value of dividends reinvested 87,336 34,823
Cost of shares redeemed (684,909) (179,527)
-------------- --------------
1,067,130 1,944,060
-------------- --------------
Net decrease from capital share transactions (86,905,392) (56,750,970)
-------------- --------------
Net increase (decrease) in net assets (119,117,507) 73,234,546
Net Assets
Beginning of year 1,374,771,180 1,301,536,634
-------------- --------------
End of year (including undistributed net investment income of
$600,831 and $232,483, respectively) $1,255,653,673 $1,374,771,180
============== ==============
(a)Capital Shares Issued and Redeemed
Class A:
Sold 4,066,223 6,907,266
Issued for dividends reinvested 4,977,355 5,532,051
Redeemed (17,796,263) (18,333,002)
-------------- --------------
Net decrease in Class A shares outstanding (8,752,685) (5,893,685)
============== ==============
Class B:
Sold 166,049 209,525
Issued for dividends reinvested 8,669 3,441
Redeemed (68,860) (18,302)
-------------- --------------
Net increase in Class B shares outstanding 105,858 194,664
============== ==============
See notes to financial statements
</TABLE>
NOTES TO FINANCIAL STATEMENTS
FIRST INVESTORS INSURED TAX EXEMPT FUND, INC.
1. Significant Accounting Policies -- The Fund is registered under the
Investment Company Act of 1940 (the "1940 Act") as a diversified, open-
end management investment company. The investment objective of the Fund
is to seek to provide a high level of interest income which is exempt
from federal income tax.
A. Security Valuation -- The municipal bonds in which the Fund invests
are traded primarily in the over-the-counter markets. Such securities
are valued daily at their fair value on the basis of valuations provided
by a pricing service approved by the Board of Directors. The pricing
service considers security type, rating, market condition and yield
data, as well as market quotations and prices provided by market makers.
"When Issued Securities" are reflected in the assets of the Fund as of
the date the securities are purchased.
The Fund's municipal bonds are insured as to payment of principal and
interest by the issuer or under insurance policies written by
independent insurance companies. It is the intention of the Fund to
retain any insured securities which are in default or in significant
risk of default and to place a value on the defaulted securities equal
to the value of similar securities which are not in default. The Fund
may invest up to 20% of its assets in portfolio securities not covered
by the insurance feature.
B. Federal Income Taxes -- It is the policy of the Fund to continue to
qualify as a regulated investment company, which can distribute exempt-
interest dividends, by complying with the provisions available to
certain investment companies, as defined in the Internal Revenue Code,
and to make distributions of income and net realized capital gains (in
excess of any available capital loss carryovers), sufficient to relieve
it from all, or substantially all, federal income taxes. At December 31,
1996, the Fund had capital loss carryovers of $14,393,783 of which
$13,869,892 expires in 2002 and $523,891 expires in 2004.
C. Distributions to Shareholders -- Dividends from net investment income
are declared daily and paid monthly. Distributions from net realized
capital gains are normally declared and paid annually. Income dividends
and capital gain distributions are determined in accordance with income
tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments
for capital loss carryforwards and deferral of wash sales.
D. Security Transactions and Investment Income -- Security transactions
are accounted for on the date the securities are purchased or sold. Cost
is determined, and gains and losses are based, on the identified cost
basis for both financial statement and federal income tax purposes.
Interest income is earned from settlement date and recorded on the
accrual basis. Estimated expenses are accrued daily. The Fund's
Custodian has provided credits in the amount of $63,739 against
custodian charges based on the uninvested cash balances of the Fund.
E. Use of Estimates -- The preparation of the financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expense during the
reporting period. Actual results could differ from those estimates.
2. Securities Transactions -- For the year ended December 31, 1996,
purchases and sales of investment securities, other than United States
Government obligations and short-term notes, aggregated $272,482,531 and
$364,677,651, respectively.
At December 31, 1996, the cost of investments for federal income tax
purposes was $1,151,913,484. Accumulated net unrealized appreciation on
investments was $91,839,029, consisting of $91,847,249 gross unrealized
appreciation and $8,220 gross unrealized depreciation.
3. Advisory Fee and Other Transactions With Affiliates -- Certain
officers and directors of the Fund are officers and directors of its
investment adviser, First Investors Management Company, Inc. ("FIMCO"),
its underwriter, First Investors Corporation ("FIC") and/or its transfer
agent, Administrative Data Management Corp. ("ADM"). Officers and
directors of the Fund received no remuneration from the Fund for serving
in such capacity. Their remuneration (together with certain other
expenses of the Fund) is paid by FIMCO or FIC.
The Investment Advisory Agreement provides as compensation to FIMCO an
annual fee, payable monthly, at the rate of .75% of the first $250
million of the Fund's average daily net assets, declining by .03% on
each $250 million thereafter, down to .66% on average daily net assets
over $750 million.
For the year ended December 31, 1996, FIC, as underwriter, received
$793,591 in commissions, after allowing $46,262 to other dealers.
Shareholder servicing costs included $862,997 in transfer agent fees
paid to ADM.
Pursuant to a Distribution Plan adopted under Rule 12b-1 of the 1940
Act, the Fund is authorized to pay FIC a fee equal to .30% of the
average net assets of the Class A shares and 1% of the average net
assets of the Class B shares on an annualized basis each year, payable
monthly. The fee consists of a distribution fee and a service fee. The
service fee is paid for the ongoing servicing of clients who are
shareholders of the Fund.
4. Capital -- The Fund sells two classes of shares, Class A and Class B,
each with a public offering price that reflects different sales charges
and expense levels. Class A shares are sold with an initial sales charge
of up to 6.25% of the amount invested and together with the Class B
shares are subject to 12b-1 fees as described in Note 3. Class B shares
are sold without an initial sales charge, but are generally subject to a
contingent deferred sales charge which declines in steps from 4% to 0%
during a six-year period. Class B shares automatically convert into
Class A shares after eight years. Realized and unrealized gains or
losses, investment income and expenses (other than 12b-1 fees and
certain other class expenses) are allocated daily to each class of
shares based upon the relative proportion of net assets of each class.
Of the 500,000,000 shares originally authorized, the Fund has designated
300,000,000 shares as Class A and 200,000,000 shares as Class B.
<TABLE>
<CAPTION>
Financial Highlights
FIRST INVESTORS INSURED TAX EXEMPT FUND, INC.
The following table sets forth the per share operating performance for a share of capital
stock outstanding, total return, ratios to average net assets and other supplemental data for
each year indicated.
- ---------------------------------------------------------------------------------------------
CLASS A
-------------------------------------------------------------
Year Ended December 31 1996 1995 1994 1993 1992
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Data
Net Asset Value, Beginning of Year $10.37 $ 9.42 $10.56 $10.32 $10.22
------ ------ ------ ------ ------
Income from Investment Operations
Net investment income .51 .52 .56 .60 .65
Net realized and unrealized gain
(loss) on investments (.23) .96 (1.15) .40 .15
------ ------ ------ ------ ------
Total from Investment Operations .28 1.48 (.59) 1.00 .80
------ ------ ------ ------ ------
Less Distributions from:
Net investment income .51 .53 .55 .61 .65
Net realized gains -- -- -- .15 .05
------ ------ ------ ------ ------
Total Distributions .51 .53 .55 .76 .70
------ ------ ------ ------ ------
Net Asset Value, End of Year $10.14 $10.37 $ 9.42 $10.56 $10.32
====== ====== ====== ====== ======
Total Return (%)+ 2.81 16.01 (5.61) 9.88 8.05
Ratios/Supplemental Data
Net Assets, End of Year (in millions) $1,253 $1,373 $1,302 $1,507 $1,363
Ratio to Average Net Assets: (%)
Expenses 1.14 1.14 1.18 1.15 1.16
Net Investment Income 5.06 5.25 5.64 5.69 6.32
Portfolio Turnover Rate (%) 21 37 57 58 52
</TABLE>
<TABLE>
<CAPTION>
Financial Highlights (continued)
- -------------------------------------------------------------------------------------------
CLASS A
- -------------------------------------------------------------------------------------------
Year Ended December 31 1991 1990 1989 1988 1987
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------
Per Share Data
Net Asset Value, Beginning of Year $ 9.92 $10.03 $ 9.91 $ 9.64 $10.14
------ ------ ------ ------ ------
Income from Investment Operations
Net investment income .69 .70 .71 .72 .72
Net realized and unrealized gain
(loss) on investments .30 (.11) .12 .27 (.50)
------ ------ ------ ------ ------
Total from Investment Operations .99 .59 .83 .99 .22
------ ------ ------ ------ ------
Less Distributions from:
Net investment income .69 .70 .71 .72 .72
Net realized gains -- -- -- -- --
------ ------ ------ ------ ------
Total Distributions .69 .70 .71 .72 .72
------ ------ ------ ------ ------
Net Asset Value, End of Year $10.22 $ 9.92 $10.03 $ 9.91 $ 9.64
====== ====== ====== ====== ======
Total Return (%)+ 10.26 6.13 8.64 10.61 2.33
Ratios/Supplemental Data
Net Assets, End of Year (in millions) $1,208 $1,132 $1,079 $971 $853
Ratio to Average Net Assets: (%)
Expenses 1.13 1.14 1.01 1.04 1.13
Net Investment Income 6.82 7.03 7.16 7.33 7.39
Portfolio Turnover Rate (%) 34 28 26 43 18
</TABLE>
<TABLE>
<CAPTION>
Financial Highlights (continued)
- ---------------------------------------------------------------------------------------
CLASS B
- ---------------------------------------------------------------------------------------
Year Ended December 31 1996 1995*
- ---------------------------------------------------------------------------------------
<S> <C> <C>
Per Share Data
Net Asset Value, Beginning of Year $10.37 $ 9.48
------ ------
Income from Investment Operations
Net investment income .44 .44
Net realized and unrealized gain
(loss) on investments (.24) .89
------ ------
Total from Investment Operations .20 1.33
------ ------
Less Distributions from:
Net investment income .44 .44
Net realized gains -- --
------ ------
Total Distributions .44 .44
------ ------
Net Asset Value, End of Year $10.13 $10.37
====== ======
Total Return (%)+ 2.03 14.27
Ratios/Supplemental Data
Net Assets, End of Year (in millions) $3 $2
Ratio to Average Net Assets: (%)
Expenses 1.83 1.88(a)
Net Investment Income 4.37 4.45(a)
Portfolio Turnover Rate (%) 21 37
* For the period 1/12/95 (date shares
first offered) to 12/31/95
+ Calculated without sales charges
(a) Annualized
See notes to financial statements
</TABLE>
Independent Auditor's Report
To the Shareholders and Board of Directors of
First Investors Insured Tax Exempt Fund, Inc.
We have audited the accompanying statement of assets and liabilities of
First Investors Insured Tax Exempt Fund, Inc., including the portfolio
of investments, as of December 31, 1996, and the related statement of
operations for the year then ended, the statement of changes in net
assets for each of the two years in the period then ended and financial
highlights for each of the years presented. 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 generally accepted auditing
standards. 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.
Our procedures included confirmation of securities owned as of December
31, 1996, by correspondence with the custodian and brokers. 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 First Investors Insured Tax Exempt Fund, Inc. at
December 31, 1996, and the results of its operations, changes in its net
assets and financial highlights for each of the respective years
presented, in conformity with generally accepted accounting principles.
Tait, Weller & Baker
Philadelphia, Pennsylvania
January 31, 1997
FIRST INVESTORS INSURED TAX EXEMPT FUND, INC.
Directors
- -------------------------------------
James J. Coy
Roger L. Grayson
Glenn O. Head
Kathryn S. Head
Rex R. Reed
Herbert Rubinstein
James M. Srygley
John T. Sullivan
Robert F. Wentworth
Officers
- -------------------------------------
Glenn O. Head
President
Concetta Durso
Vice President and Secretary
Clark D. Wagner
Vice President
Joseph I. Benedek
Treasurer
Carol Lerner Brown
Assistant Secretary
Gregory R. Kingston
Assistant Treasurer
Mark S. Spencer
Assistant Treasurer
Shareholder Information
- -------------------------------------
Investment Adviser
First Investors
Management Company, Inc.
95 Wall Street
New York, NY 10005
Underwriter
First Investors Corporation
95 Wall Street
New York, NY 10005
Custodian
The Bank of New York
48 Wall Street
New York, NY 10286
Transfer Agent
Administrative Data
Management Corp.
581 Main Street
Woodbridge, NJ 07095-1198
Legal Counsel
Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue, N.W.
Washington, DC 20036
Auditors
Tait, Weller & Baker
Two Penn Center Plaza
Philadelphia, PA 19102
It is the Fund's practice to mail only one copy of its
annual and semi-annual reports to any address at which more than one
shareholder with the same last name has indicated that mail is to be
delivered. Additional copies of the reports will be mailed if requested
by any shareholder in writing or by calling 800-423-4026. The Fund will
ensure that separate reports are sent to any shareholder who
subsequently changes his or her mailing address.
This report is authorized for distribution only to existing
shareholders, and, if given to prospective shareholders, must be
accompanied or preceded by the Fund's prospectus.
