FIRST INVESTORS MULTISTATE INSURED TAX FREE FUND, 485BPOS, 1995-04-25

FIRST INVESTORS MULTISTATE INSURED TAX FREE FUND
485BPOS, 1995-04-25

Previous: PHOTRONICS INC, 10-C, 1995-04-25

Next: WORLDCORP INC, 10-K/A, 1995-04-25

<PAGE>

As filed with the Securities and Exchange Commission on April 25, 1995

Registration No. 33-4077
811-4623
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Post-Effective Amendment No. 18 X
-

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940

Amendment No. 18 X
-

----------

FIRST INVESTORS MULTI-STATE INSURED TAX FREE FUND
(Exact name of Registrant as specified in charter)

Mr. Larry R. Lavoie
Secretary and General Counsel
First Investors Corporation
95 Wall Street
New York, New York 10005
(Name and Address of Agent for Service)

Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of this Registration Statement

It is proposed that this filing will become effective on May 1, 1995 pursuant to
paragraph (b) of Rule 485

Pursuant to Rule 24f-2 under the Investment Company Act of 1940, Registrant has
previously elected to register an indefinite number of shares of beneficial
interest, no par value, under the Securities Act of 1933. Registrant filed a
Rule 24f-2 Notice for its fiscal year ending December 31, 1994 on February 21,
1995.

<PAGE>

FIRST INVESTORS MULTI-STATE INSURED TAX FREE FUND
CROSS-REFERENCE SHEET

N-1A Item No. Location
- ------------- --------

PART A: PROSPECTUS

1. Cover Page. . . . . . . . . . . . . . . . Cover Page
2. Synopsis. . . . . . . . . . . . . . . . . Fee Table
3. Condensed Financial Information . . . . . Financial Highlights
4. General Description of Registrant . . . . Investment Objectives and
Policies; General Information
5. Management of the Fund. . . . . . . . . . Management
5A. Management's Discussion of
Fund Performance . . . . . . . . . . . . Performance Information
6. Capital Stock and Other Securities. . . . Description of Shares; Dividends
and Other Distributions; Taxes;
Determination of Net Asset Value
7. Purchase of Securities Being Offered. . . Alternative Purchase Plan; How
to Buy Shares
8. Redemption or Repurchase. . . . . . . . . How to Exchange Shares; How to
Redeem Shares; Telephone
Transactions
9. Pending Legal Proceedings . . . . . . . . Management

PART B: STATEMENT OF ADDITIONAL INFORMATION

10. Cover Page. . . . . . . . . . . . . . . . Cover Page
11. Table of Contents . . . . . . . . . . . . Table of Contents
12. General Information and History . . . . . General Information
13. Investment Objectives and Policies. . . . Investment Policies; Investment
Restrictions; State Specific
Risk Factors; Insurance
14. Management of the Fund. . . . . . . . . . Directors or Trustees and
Officers
15. Control Persons and Principal
Holders of Securities. . . . . . . . . . Not Applicable
16. Investment Advisory and Other Services. . Management
17. Brokerage Allocation. . . . . . . . . . . Allocation of Portfolio
Brokerage
18. Capital Stock and Other Securities. . . . Determination of Net Asset Value
19. Purchase, Redemption and Pricing
of Securities Being Offered. . . . . . . Reduced Sales Charges,
Additional Exchange and
Redemption Information and Other
Services; Determination of Net
Asset Value

<PAGE>

N-1A Item No. Location
- ------------- --------

20. Tax Status. . . . . . . . . . . . . . . . Taxes
21. Underwriters. . . . . . . . . . . . . . . Underwriter
22. Performance Data. . . . . . . . . . . . . Performance Information
23. Financial Statements. . . . . . . . . . . Financial Statements; Report of
Independent Accountants

PART C: OTHER INFORMATION

Information required to be included in Part C is set forth under
the appropriate item so numbered, in Part C hereof.

<PAGE>

FIRST INVESTORS MULTI-STATE INSURED TAX FREE FUND
ARIZONA, CALIFORNIA, COLORADO, MICHIGAN, MINNESOTA,
MISSOURI, OHIO AND OREGON SERIES

95 Wall Street, New York, New York 10005/1-800-423-4026

This is a Prospectus for FIRST INVESTORS MULTI-STATE INSURED TAX FREE FUND
("Fund"), an open-end diversified management investment company consisting of
seventeen separate investment series. This Prospectus relates to the eight
Series of the Fund listed above (singularly and collectively, "Series"). Each
Series sells two classes of shares. Investors may select Class A or Class B
shares, each with a public offering price that reflects different sales charges
and expense levels. See "Alternative Purchase Plans."

THE SERIES' MUNICIPAL BONDS ARE INSURED AS TO TIMELY PAYMENT OF PRINCIPAL
AND INTEREST. INSURANCE DOES NOT PROTECT AGAINST FLUCTUATIONS IN THE BONDS'
MARKET VALUE OR EACH SERIES' NET ASSET VALUE PER SHARE. FOR MORE INFORMATION
REGARDING THE SERIES' INSURANCE COVERAGE, SEE "INSURANCE" ON PAGE 11.

This Prospectus sets forth concisely the information about the Series that
a prospective investor should know before investing and should be retained for
future reference. First Investors Management Company, Inc. ("FIMCO" or
"Adviser") serves as investment adviser to the Series and First Investors
Corporation ("FIC" or "Underwriter") serves as distributor of the Series'
shares. A Statement of Additional Information ("SAI"), dated May 1, 1995 (which
is incorporated by reference herein), has been filed with the Securities and
Exchange Commission. The SAI is available at no charge upon request to the Fund
at the address or telephone number indicated above.

AN INVESTMENT IN THESE SECURITIES IS NOT A DEPOSIT OR OBLIGATION OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK AND IS NOT FEDERALLY INSURED OR PROTECTED BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY
OTHER GOVERNMENT AGENCY.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

The date of this Prospectus is May 1, 1995

<PAGE>

FEE TABLE

The following table is intended to assist investors in understanding the
expenses associated with investing in each class of shares of a Series. Shares
of the Series issued prior to January 12, 1995 have been designated as Class A
shares.

SHAREHOLDER TRANSACTION EXPENSES

Class A Class B
Shares Shares
--------- --------
<S> <C> <C>

Maximum Sales Load Imposed on Purchases
(as a percentage of offering price) . . . . . . . . . . . . . . . . 6.25% None
Deferred Sales Load
(as a percentage of the lower of original purchase
price or redemption proceeds) . . . . . . . . . . . . . . . . . . . None* 4% in the first year;
declining to 0% after
the sixth year

Exchange Fee** None None

</TABLE>

ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)

MANAGEMENT TOTAL FUND
FEES(2) 12B-1 FEES(3) OTHER EXPENSES(4) OPERATING EXPENSES(5)
-------------------- --------------------- -------------------- ----------------------
Class A Class B(1) Class A Class B(1) Class A Class B(1) Class A Class B(1)
Shares Shares Shares Shares Shares Shares Shares Shares
------- ---------- ------- ---------- ------- ---------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>

ARIZONA SERIES 0.65%+ 0.65%+ 0.25% 1.00% 0.25%+ 0.25%+ 1.15%+ 1.90%+
CALIFORNIA SERIES 0.65+ 0.65+ 0.25 1.00 0.25+ 0.25+ 1.15+ 1.90+
COLORADO SERIES 0.65+ 0.65+ 0.25 1.00 0.25+ 0.25+ 1.15+ 1.90+
MICHIGAN SERIES 0.65+ 0.65+ 0.25 1.00 0.23 0.23 1.13+ 1.88+
MINNESOTA SERIES 0.65+ 0.65+ 0.25 1.00 0.25+ 0.25+ 1.15+ 1.90+
MISSOURI SERIES 0.65+ 0.65+ 0.25 1.00 0.25+ 0.25+ 1.15+ 1.90+
OHIO SERIES 0.65+ 0.65+ 0.25 1.00 0.25 0.25 1.15+ 1.90+
OREGON SERIES 0.65+ 0.65+ 0.25 1.00 0.25+ 0.25+ 1.15+ 1.90+

<FN>
- ----------------
* A contingent deferred sales charge ("CDSC") of 1.00% will be assessed on
certain redemptions of Class A shares that are purchased without a sales
charge. See "How to Buy Shares."
** Although there is a $5.00 exchange fee for exchanges into a Series, this
fee is being assumed by that Series for a minimum period ending December
31, 1995. Each Series reserves the right to change or suspend this
privilege after December 31, 1995. See "How to Exchange Shares."
+ Net of waiver and/or reimbursement.
1 Since Class B shares were not issued during any Series' prior fiscal year,
Other Expenses and Total Fund Operating Expenses are based on estimated
amounts for the fiscal year ending December 31, 1995.
2 Management Fees have been restated for each Series. The Adviser will waive
management fees in excess of 0.65% for each Series. Otherwise, Management
Fees would be 0.75% for each Series.
3 12b-1 Fees have been restated for Class A shares of each Series to reflect
the maximum 12b-1 Fees that may be incurred for the fiscal year ending
December 31, 1995.
4 Other Expenses have been restated for certain Series. The Adviser will
assume Other Expenses for each class of each Series, other than the
MICHIGAN SERIES and OHIO SERIES, in excess of 0.25% for a minimum period
ending December 31, 1995. Otherwise, Other Expenses for each of the
remaining Series would be as follows: ARIZONA SERIES - 0.27%;

<PAGE>

CALIFORNIA SERIES - 0.27%; COLORADO SERIES - 0.48%; MINNESOTA SERIES -
0.34%; MISSOURI SERIES - 0.62%; and OREGON SERIES - 0.44%.
5 If certain Operating Expenses were not waived or reimbursed, Total Fund
Operating Expenses for Class A shares would have been as follows: ARIZONA
SERIES - 1.32%; CALIFORNIA SERIES - 1.32%; COLORADO SERIES - 1.53%;
MICHIGAN SERIES - 1.28%; MINNESOTA SERIES - 1.39%; MISSOURI SERIES - 1.67%;
OHIO SERIES - 1.30%; and OREGON SERIES - 1.49%; and for Class B shares are
estimated to be as follows: ARIZONA SERIES - 2.02%; CALIFORNIA SERIES -
2.02%; COLORADO SERIES - 2.23%; MICHIGAN SERIES - 1.98%; MINNESOTA SERIES -
2.09%; MISSOURI SERIES - 2.37%; OHIO SERIES - 2.00%; and OREGON SERIES -
2.19%.

</TABLE>

For a more complete description of the various costs and expenses, see
"Investment Objectives and Policies--Insurance," "Alternative Purchase Plans,"
"How to Buy Shares," "How to Redeem Shares," "Management" and "Distribution
Plans." Due to the imposition of 12b-1 fees, it is possible that long-term
shareholders of a Series may pay more in total sales charges than the economic
equivalent of the maximum front-end sales charge permitted by the rules of the
National Association of Securities Dealers, Inc.

The Example below is based on Class A expense data for each Series' fiscal
year ended December 31, 1994, except that certain Operating Expenses have been
restated as noted above. Expense data for Class B shares have been estimated
because the shares were not issued during this period.

EXAMPLE

You would pay the following expenses on a $1,000 investment, assuming (1)
5% annual return and (2) redemption at the end of each time period:

ONE YEAR THREE YEARS FIVE YEARS TEN YEARS
-------- ----------- ---------- ---------
<S> <C> <C> <C> <C>

ARIZONA SERIES
Class A. . . . . . . . . . . . $73 $97 $122 $194
Class B. . . . . . . . . . . . 59 90 123 203

CALIFORNIA SERIES
Class A. . . . . . . . . . . . 73 97 122 194
Class B. . . . . . . . . . . . 59 90 123 203

COLORADO SERIES
Class A. . . . . . . . . . . . 73 97 122 194
Class B. . . . . . . . . . . . 59 90 123 203

MICHIGAN SERIES
Class A. . . . . . . . . . . . 73 96 121 191
Class B. . . . . . . . . . . . 59 89 122 201

MINNESOTA SERIES
Class A. . . . . . . . . . . . 73 97 122 194
Class B. . . . . . . . . . . . 59 90 123 203

MISSOURI SERIES
Class A. . . . . . . . . . . . 73 97 122 194
Class B. . . . . . . . . . . . 59 90 123 203

</TABLE>

<PAGE>

ONE YEAR THREE YEARS FIVE YEARS TEN YEARS
-------- ----------- ---------- ---------
<S> <C> <C> <C> <C>

OHIO SERIES
Class A. . . . . . . . . . . . $73 $97 $122 $194
Class B. . . . . . . . . . . . 59 90 123 203

OREGON SERIES
Class A. . . . . . . . . . . . 73 97 122 194
Class B. . . . . . . . . . . . 59 90 123 203

</TABLE>

You would pay the following expenses on the same $1,000 investment,
assuming (1) 5% annual return and (2) no redemption at the end of each time
period:

ONE YEAR THREE YEARS FIVE YEARS TEN YEARS
-------- ----------- ---------- ---------
<S> <C> <C> <C> <C>

ARIZONA SERIES
Class A. . . . . . . . . . . . $73 $97 $122 $194
Class B. . . . . . . . . . . . 19 60 103 203

CALIFORNIA SERIES
Class A. . . . . . . . . . . . 73 97 122 194
Class B. . . . . . . . . . . . 19 60 103 203

COLORADO SERIES
Class A. . . . . . . . . . . . 73 97 122 194
Class B. . . . . . . . . . . . 19 60 103 203

MICHIGAN SERIES
Class A. . . . . . . . . . . . 73 96 121 191
Class B. . . . . . . . . . . . 19 59 102 201

MINNESOTA SERIES
Class A. . . . . . . . . . . . 73 97 122 194
Class B. . . . . . . . . . . . 19 60 103 203

MISSOURI SERIES
Class A. . . . . . . . . . . . 73 97 122 194
Class B. . . . . . . . . . . . 19 60 103 203

OHIO SERIES
Class A. . . . . . . . . . . . 73 97 122 194
Class B. . . . . . . . . . . . 19 60 103 203

OREGON SERIES
Class A. . . . . . . . . . . . 73 97 122 194
Class B. . . . . . . . . . . . 19 60 103 203

</TABLE>

THE EXPENSES IN THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION BY
THE SERIES OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES IN FUTURE YEARS MAY BE
GREATER OR LESS THAN THOSE SHOWN.

<PAGE>

FINANCIAL HIGHLIGHTS

The table on the following pages sets forth the per share operating
performance data for a share of beneficial interest outstanding, total return,
ratios to average net assets and other supplemental data for each period
indicated. Financial highlights are not presented for Class B shares since no
shares of that class were outstanding during these periods. The table has been
derived from financial statements which have been examined by Tait, Weller &
Baker, independent certified public accountants, whose report thereon appears in
the SAI. This information should be read in conjunction with the Financial
Statements and Notes thereto, which also appear in the SAI, available at no
charge upon request to the Series.

<PAGE>

Class A Shares
-------------------------------------------------------------------------------------------
PER SHARE DATA
-------------------------------------------------------------------------------------------
Income From Investment Operations Less Distributions from
-------------------------------------- --------------------------
Net Asset Value Net Realized Total
------------ Net and Unrealized from Net Net Realized
Beginning of Investment Gain (Loss) on Investment Investment Gain on
Period Income Investments Operations Income Investments
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>

FIRST INVESTORS MULTI-STATE
INSURED TAX FREE FUND

ARIZONA SERIES
11/1/90** to 12/31/90 . . . . $ 11.17 $.009 $(.059) $(.050) $ -- $ --
1991 . . . . . . . . . . . . 11.12 .605 .420 1.025 .605 .020
1992 . . . . . . . . . . . . 11.52 .683 .545 1.228 .668 --
1993 . . . . . . . . . . . . 12.08 .681 1.078 1.759 .672 .047
1994 . . . . . . . . . . . . 13.12 .663 (1.397) (.734) .676 --

CALIFORNIA SERIES
2/23/87** to 12/31/87 . . . . 11.13 .497 (1.247) (.750) .460 --
1988 . . . . . . . . . . . . 9.92 .747 .493 1.240 .780 --
1989 . . . . . . . . . . . . 10.38 .736 .294 1.030 .740 --
1990 . . . . . . . . . . . . 10.67 .747 (.047) .700 .750 --
1991 . . . . . . . . . . . . 10.62 .706 .452 1.158 .708 --
1992 . . . . . . . . . . . . 11.07 .653 .406 1.059 .644 .045
1993 . . . . . . . . . . . . 11.44 .637 .845 1.482 .612 .190
1994 . . . . . . . . . . . . 12.12 .598 (1.328) (.730) .620 --

COLORADO SERIES
5/4/92** to 12/31/92 . . . . 11.17 .308 .442 .750 .290 --
1993 . . . . . . . . . . . . 11.63 .625 .984 1.609 .633 .006
1994 . . . . . . . . . . . . 12.60 .631 (1.351) (.720) .640 --

MICHIGAN SERIES
1987 . . . . . . . . . . . . 11.13 .566 (1.106) (.540) .540 --
1988 . . . . . . . . . . . . 10.05 .773 .557 1.330 .790 --
1989 . . . . . . . . . . . . 10.59 .724 .406 1.130 .730 --
1990 . . . . . . . . . . . . 10.99 .743 (.023) .720 .730 --
1991 . . . . . . . . . . . . 10.98 .729 .476 1.205 .735 .020
1992 . . . . . . . . . . . . 11.43 .681 .494 1.175 .675 --
1993 . . . . . . . . . . . . 11.93 .641 1.053 1.694 .655 .079
1994 . . . . . . . . . . . . 12.89 .612 (1.423) (.811) .609 --

Net Asset Value Net Assets
Total --------------- Total End of Period
Distributions End of Period Return+(%) (in thousands)
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>

FIRST INVESTORS MULTI-STATE

INSURED TAX FREE FUND

ARIZONA SERIES
11/1/90** to 12/31/90 . . . . $ -- $ 11.12 (2.68)* $ 602
1991 . . . . . . . . . . . . .625 11.52 9.49 2,380
1992 . . . . . . . . . . . . .668 12.08 10.98 4,818
1993 . . . . . . . . . . . . .719 13.12 14.87 8,247
1994 . . . . . . . . . . . . .676 11.71 (5.63) 8,803

CALIFORNIA SERIES
2/23/87** to 12/31/87 . . . . .460 9.92 7.64* 2,033
1988 . . . . . . . . . . . . .780 10.38 12.94 2,707
1989 . . . . . . . . . . . . .740 10.67 10.21 6,311
1990 . . . . . . . . . . . . .750 10.62 6.81 7,873
1991 . . . . . . . . . . . . .708 11.07 11.26 12,761
1992 . . . . . . . . . . . . .689 11.44 9.84 15,195
1993 . . . . . . . . . . . . .802 12.12 13.21 17,625
1994 . . . . . . . . . . . . .620 10.77 (6.10) 15,335

COLORADO SERIES
5/4/92** to 12/31/92 . . . . .290 11.63 10.10* 1,122
1993 . . . . . . . . . . . . .639 12.60 14.14 2,887
1994 . . . . . . . . . . . . .640 11.24 (5.77) 3,110

MICHIGAN SERIES
1987 . . . . . . . . . . . . .540 10.05 6.03 1,077
1988 . . . . . . . . . . . . .790 10.59 13.65 1,845
1989 . . . . . . . . . . . . .730 10.99 10.98 6,255
1990 . . . . . . . . . . . . .730 10.98 6.83 10,542
1991 . . . . . . . . . . . . .755 11.43 11.14 13,630
1992 . . . . . . . . . . . . .675 11.93 10.59 20,971
1993 . . . . . . . . . . . . .734 12.89 14.49 30,281
1994 . . . . . . . . . . . . .609 11.47 (6.36) 30,362

Class A Shares
-------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
-------------------------------------------------------------------------------------------

Ratio to Average Net Assets Before
Ratio to Average Net Assets++ Expenses Waived or Assumed
------------------------------ ----------------------------------
Net Net Portfolio
Investment Investment Turnover
Expenses(%) Income(%) Expenses(%) Income(%) Rate(%)
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>

FIRST INVESTORS MULTI-STATE
INSURED TAX FREE FUND

ARIZONA SERIES
11/1/90** to 12/31/90 . . . . -- .59* 1.47* (.88)* 0
1991 . . . . . . . . . . . . .05 5.75 1.51 4.29 45
1992 . . . . . . . . . . . . .20 5.84 1.32 4.72 58
1993 . . . . . . . . . . . . .20 5.40 1.20 4.41 45
1994 . . . . . . . . . . . . .30 5.52 1.24 4.59 63

CALIFORNIA SERIES
2/23/87** to 12/31/87 . . . . .03* 5.02* .76* 4.30* 32
1988 . . . . . . . . . . . . .05 7.42 1.19 6.29 9
1989 . . . . . . . . . . . . .09 7.02 1.19 5.91 16
1990 . . . . . . . . . . . . .08 7.11 1.05 6.14 27
1991 . . . . . . . . . . . . .30 6.49 1.02 5.77 34
1992 . . . . . . . . . . . . .72 5.83 1.25 5.30 52
1993 . . . . . . . . . . . . .89 5.33 1.14 5.08 66
1994 . . . . . . . . . . . . .97 5.27 1.22 5.02 83

COLORADO SERIES
5/4/92** to 12/31/92 . . . . -- 4.95* 1.90* 3.06* 46
1993 . . . . . . . . . . . . .12 5.13 1.42 3.83 27
1994 . . . . . . . . . . . . .20 5.41 1.43 4.18 108

MICHIGAN SERIES
1987 . . . . . . . . . . . . .07 6.52 1.18 5.41 7
1988 . . . . . . . . . . . . .12 7.52 1.41 6.23 31
1989 . . . . . . . . . . . . .13 6.76 1.14 5.75 1
1990 . . . . . . . . . . . . .10 6.90 1.06 5.94 11
1991 . . . . . . . . . . . . .31 6.56 1.05 5.82 22
1992 . . . . . . . . . . . . .73 5.86 1.22 5.37 26
1993 . . . . . . . . . . . . .89 5.11 1.14 4.86 25
1994 . . . . . . . . . . . . .93 5.11 1.18 4.86 60

<FN>
* Annualized
** Commencement of operations
+ Calculated without sales charge
++ Net of expenses waived or assumed by the investment adviser and the
transfer agent from the commencement of operations through
December 31, 1994.

</TABLE>

6 and 7

<PAGE>

MINNESOTA SERIES
1987 . . . . . . . . . . . . $11.13 $.557 $(1.127) $(.570) $.550 $ --
1988 . . . . . . . . . . . . 10.01 .748 .332 1.080 .740 --
1989 . . . . . . . . . . . . 10.35 .719 .271 .990 .730 --
1990 . . . . . . . . . . . . 10.61 .722 (.037) .685 .725 --
1991 . . . . . . . . . . . . 10.57 .728 .399 1.127 .720 .007
1992 . . . . . . . . . . . . 10.97 .676 .313 .989 .659 --
1993 . . . . . . . . . . . . 11.30 .625 .622 1.247 .640 .137
1994 . . . . . . . . . . . . 11.77 .592 (1.282) (.690) .600 --

MISSOURI SERIES
5/4/92** to 12/31/92. . . . . 11.17 .272 .363 .635 .255 --
1993 . . . . . . . . . . . . 11.55 .620 .988 1.608 .635 .023
1994 . . . . . . . . . . . . 12.50 .617 (1.384) (.767) .613 --

OHIO SERIES
1987 . . . . . . . . . . . . 11.13 .576 (1.166) (.590) .550 --
1988 . . . . . . . . . . . . 9.99 .792 .578 1.370 .800 --
1989 . . . . . . . . . . . . 10.56 .732 .408 1.140 .750 --
1990 . . . . . . . . . . . . 10.95 .752 (.012) .740 .760 --
1991 . . . . . . . . . . . . 10.93 .725 .493 1.218 .718 --
1992 . . . . . . . . . . . . 11.43 .676 .432 1.108 .668 --
1993 . . . . . . . . . . . . 11.87 .632 .894 1.526 .632 .104
1994 . . . . . . . . . . . . 12.66 .613 (1.353) (.740) .620 --

OREGON SERIES
5/4/92** to 12/31/92 . . . . 11.17 .260 .230 .490 .240 --
1993 . . . . . . . . . . . . 11.42 .661 .807 1.468 .598 --
1994 . . . . . . . . . . . . 12.29 .529 (1.339) (.810) .610 --

MINNESOTA SERIES
1987 . . . . . . . . . . . . $.550 $10.01 5.04 $ 585
1988 . . . . . . . . . . . . .740 10.35 11.14 789
1989 . . . . . . . . . . . . .730 10.61 9.85 1,992
1990 . . . . . . . . . . . . .725 10.57 6.71 3,365
1991 . . . . . . . . . . . . .727 10.97 11.00 4,430
1992 . . . . . . . . . . . . .659 11.30 9.29 5,983
1993 . . . . . . . . . . . . .777 11.77 11.30 8,118
1994 . . . . . . . . . . . . .600 10.48 (5.93) 7,375

MISSOURI SERIES
5/4/92** to 12/31/92. . . . . .255 11.55 8.58* 475
1993 . . . . . . . . . . . . .658 12.50 14.21 1,540
1994 . . . . . . . . . . . . .613 11.12 (6.20) 1,611

OHIO SERIES
1987 . . . . . . . . . . . . .550 9.99 5.15 965
1988 . . . . . . . . . . . . .800 10.56 14.15 1,485
1989 . . . . . . . . . . . . .750 10.95 11.09 4,058
1990 . . . . . . . . . . . . .760 10.93 7.05 6,627
1991 . . . . . . . . . . . . .718 11.43 11.51 9,324
1992 . . . . . . . . . . . . .668 11.87 9.99 13,869
1993 . . . . . . . . . . . . .736 12.66 13.12 20,366
1994 . . . . . . . . . . . . .620 11.30 (5.91) 18,169

OREGON SERIES
5/4/92** to 12/31/92 . . . . .240 11.42 6.62* 931
1993 . . . . . . . . . . . . .598 12.29 13.13 3,747
1994 . . . . . . . . . . . . .610 10.87 (6.65) 4,696

MINNESOTA SERIES
1987 . . . . . . . . . . . . .15 6.06 1.49 4.72 15
1988 . . . . . . . . . . . . .15 7.38 1.86 5.67 10
1989 . . . . . . . . . . . . .16 6.94 1.42 5.68 16
1990 . . . . . . . . . . . . .15 6.92 1.54 5.53 22
1991 . . . . . . . . . . . . .17 6.83 1.21 5.80 17
1992 . . . . . . . . . . . . .51 6.10 1.38 5.23 33
1993 . . . . . . . . . . . . .65 5.40 1.24 4.80 41
1994 . . . . . . . . . . . . .65 5.40 1.29 4.76 34

MISSOURI SERIES
5/4/92** to 12/31/92. . . . . -- 4.36* 4.60* (.24)* 28
1993 . . . . . . . . . . . . .13 4.44 1.76 2.81 8
1994 . . . . . . . . . . . . .20 5.45 1.57 4.07 98

OHIO SERIES
1987 . . . . . . . . . . . . .07 6.71 1.20 5.59 23
1988 . . . . . . . . . . . . .06 7.76 1.50 6.33 23
1989 . . . . . . . . . . . . .07 6.94 1.17 5.84 5
1990 . . . . . . . . . . . . .07 6.99 1.11 5.95 31
1991 . . . . . . . . . . . . .29 6.50 1.05 5.73 34
1992 . . . . . . . . . . . . .62 5.83 1.21 5.23 29
1993 . . . . . . . . . . . . .80 5.09 1.15 4.74 30
1994 . . . . . . . . . . . . .85 5.18 1.20 4.83 57

OREGON SERIES
5/4/92** to 12/31/92 . . . . -- 4.30* 2.48* 1.82* 12
1993 . . . . . . . . . . . . -- 4.94 1.28 3.66 77
1994 . . . . . . . . . . . . .20 5.36 1.39 4.17 135

</TABLE>

8 and 9
<PAGE>

INVESTMENT OBJECTIVES AND POLICIES

The investment objective of each Series is to achieve a high level of
interest income which is exempt from Federal income tax and, to the extent
indicated for a particular Series, from state and local income taxes for
residents of that state and, for non-corporate shareholders, the Federal
alternative minimum tax. Each Series seeks to achieve its objective by
investing at least 80% of its total assets in Municipal Instruments, as defined
below, issued by or on behalf of states, territories and possessions of the
United States and the District of Columbia and their political subdivisions,
agencies and instrumentalities, the interest on which is exempt from Federal
income tax, state and local income taxes in the states for whose residents the
particular Series is established and, for non-corporate shareholders, the
Federal alternative minimum tax. See "Municipal Instruments." In the case of
the MINNESOTA SERIES, it is intended that such Series will comply with the
requirement under current law that, in order for exempt-interest dividends that
are derived from interest income from specified Minnesota sources to be exempt
from regular Minnesota personal income tax, 95% or more of the exempt-interest
dividends that are paid to all shareholders by the Series must be derived from
such specified Minnesota sources. It should be noted, however, that even if the
95% test is met, under a bill that was introduced in the Minnesota House of
Representatives on March 15, 1995, exempt-interest dividends that are derived
from interest income from such specified Minnesota sources will be subject to
Minnesota regular and alternative minimum personal income taxes if the specified
Minnesota source obligations were issued or sold after July 1, 1995, or if the
MINNESOTA SERIES acquired such obligations after July 1, 1995. See "Taxes-
Minnesota" for a further discussion of this requirement and related proposed
legislation.

As used in this Prospectus and in the SAI, "Municipal Instruments" include
the following: (1) municipal bonds; (2) certificates of participation ("COPs");
(3) municipal notes; (4) municipal commercial paper; and (5) variable rate
demand instruments ("VRDIs").

GENERAL POLICIES

Each Series may purchase securities on a "when-issued" basis and invest in
zero coupon municipal securities. Each Series also may invest up to 20% of its
assets, on a temporary basis, in high quality fixed income obligations, the
interest on which is subject to Federal and state or local income taxes. Each
Series also may invest up to 10% of its total assets in municipal obligations on
which the rate of interest varies inversely with interest rates on other
municipal obligations or an index (commonly referred to as inverse floaters) and
may acquire detachable call options relating to municipal bonds. Each Series
may borrow money for temporary or emergency purposes in amounts not exceeding 5%
of its total assets. See "Description of Certain Securities, Other Investment
Policies and Risk Factors," below, and the SAI for more information regarding
these securities.

Although each Series generally invests in municipal bonds rated Baa or
higher by Moody's Investors Service, Inc. ("Moody's") or BBB or higher by
Standard & Poor's Ratings Group ("S&P"), each Series may invest up to 5% of its
net assets in lower rated municipal bonds or in unrated municipal bonds deemed
to be of comparable quality by the Adviser. See "Debt Securities--Risk
Factors." However, in each instance such municipal bonds will be covered by the
insurance feature and thus are considered to be of higher quality than lower
rated municipal bonds without an insurance feature. See "Insurance" for a
discussion of the insurance feature. The Adviser will carefully evaluate on a
case-by-case basis whether to dispose of or retain a municipal bond which has

<PAGE>

been downgraded in rating subsequent to its purchase by a Series. A description
of municipal bond ratings is contained in Appendix A to the SAI.

Each Series may invest more than 25% of its total assets in a particular
segment of the municipal bond market, such as hospital revenue bonds, housing
agency bonds, industrial development bonds, airport bonds and university
dormitory bonds, during periods when one or more of these segments offer higher
yields and/or profit potential. This possible concentration of the assets of a
Series may result in the Series being invested in securities which are related
in such a way that economic, business, political developments, or other changes
which would affect one security would probably likewise affect the other
securities within that particular segment of the bond market. Such
concentration of a Series' investments could increase market risks, but risk of
non-payment of interest when due, or default on the payment of principal, is
covered by the insurance feature of each Series.

Each Series' net asset value fluctuates based mainly upon changes in the
value of its portfolio securities. Each Series' investment objective and
certain investment policies set forth in the SAI that are designated fundamental
policies may not be changed without shareholder approval. There can be no
assurance that any of the Series will achieve its investment objective.

DESCRIPTION OF CERTAIN SECURITIES, OTHER INVESTMENT POLICIES AND RISK FACTORS

DEBT SECURITIES--RISK FACTORS. The market value of debt securities is
influenced significantly by changes in the level of interest rates. Generally,
as interest rates rise, the market value of debt securities decreases.
Conversely, as interest rates fall, the market value of debt securities
increases. Factors which could result in a rise in interest rates, and a
decrease in market value of debt securities, include an increase in inflation or
inflation expectations, an increase in the rate of U.S. economic growth, an
expansion in the Federal budget deficit, or an increase in the price of
commodities such as oil. In addition, the market value of debt securities is
influenced by perceptions of the credit risks associated with such securities.
Debt obligations rated lower than Baa by Moody's or BBB by S&P, commonly
referred to as "junk bonds," are speculative and generally involve a higher risk
of loss of principal and income than higher-rated securities. See Appendix A to
the SAI for a description of municipal bond ratings.

INSURANCE. All municipal bonds in each Series' portfolio will be insured
as to their scheduled payment of principal and interest at the time of purchase
either (1) under a Mutual Fund Insurance Policy purchased by the Fund, on behalf
of the Series, from an independent insurance company; (2) under an insurance
policy obtained subsequent to a municipal bond's original issue (a "Secondary
Market Insurance Policy") or (3) under an insurance policy obtained by the
issuer or underwriter of such municipal bond at the time of original issuance (a
"New Issue Insurance Policy"). An insured municipal bond in the portfolio of a
Series typically will be covered by only one of the three policies. All three
types of insurance policies insure the scheduled payment of all principal and
interest on the Series' municipal bonds as they fall due. The insurance does
not guarantee the market value or yield of the insured municipal bonds or the
net asset value or yield of the shares of a Series. Investors should note that
while all municipal bonds in which the Series will invest will be insured, each
Series may invest up to 35% of its total assets in portfolio securities not
covered by the insurance feature. The Fund has purchased a Mutual Fund
Insurance Policy from AMBAC Indemnity Corporation ("AMBAC"), a Wisconsin stock
insurance company with its principal executive offices in New York City. Under
certain circumstances, the Fund may obtain such insurance from

<PAGE>

an insurer other than AMBAC, provided such insurer has a claims-paying ability
rated AAA by S&P and Aaa by Moody's. Because these insurance premiums are paid
by each Series, a Series' yield is reduced by this expense. See "Insurance" in
the SAI for a detailed discussion of the insurance feature.

INVERSE FLOATERS. Each Series may invest in securities on which the rate
of interest varies inversely with interest rates on similar securities or the
value of an index. For example, an inverse floating rate security may pay
interest at a rate that increases as a specified interest rate index decreases
but decreases as that index increases. The secondary market for inverse
floaters may be limited. The market value of such securities generally is more
volatile than that of a fixed rate obligation and, like most debt obligations,
will vary inversely with changes in interest rates. The interest rates on
inverse floaters may be significantly reduced, even to zero, if interest rates
rise. Each Series may invest up to 10% of its net assets in inverse floaters.

MUNICIPAL INSTRUMENTS

MUNICIPAL BONDS. Municipal bonds are debt obligations that generally are
issued to obtain funds for various public purposes and have a time to maturity,
at issuance, of more than one year. The two principal classifications of
municipal bonds are "general obligation" and "revenue" bonds. General
obligation bonds are secured by the issuer's pledge of its full faith and credit
for the payment of principal and interest. Revenue bonds generally are payable
only from revenues derived from a particular facility or class of facilities or,
in some cases, from the proceeds of a special tax or other specific revenue
source. There are variations in the security of municipal bonds, both within a
particular classification and between classifications, depending on numerous
factors. The yields on municipal bonds depend on, among other things, general
money market conditions, condition of the municipal bond market, size of a
particular offering, the maturity of the obligation and rating of the issuer.
Generally, the value of municipal bonds varies inversely to changes in interest
rates. See Appendix A to the SAI for a description of municipal bond ratings.

PRIVATE ACTIVITY BONDS OR INDUSTRIAL DEVELOPMENT BONDS. Certain types of
revenue bonds, referred to as private activity bonds ("PABs") or industrial
development bonds ("IDBs"), are issued by or on behalf of public authorities to
obtain funds to provide for various privately operated facilities, such as
airports or mass transportation facilities. Most PABs and IDBs are pure revenue
bonds and are not backed by the taxing power of the issuing agency or authority.
See "Taxes" in the SAI for a discussion of special tax consequences to
"substantial users," or persons related thereto, of facilities financed by PABs
or IDBs.

CERTIFICATES OF PARTICIPATION. COPs provide participation interests in
lease revenues and each certificate represents a proportionate interest in or
right to the lease-purchase payment made under municipal lease obligations or
installment sales contracts. In certain states, COPs constitute a majority of
new municipal financing issues. The possibility that a municipality will not
appropriate funds for lease payments is a risk of investing in COPs, although
this risk is mitigated by the fact that each COP will be covered by the
insurance feature. See "Certificates of Participation" in the SAI for further
information on COPs.

MUNICIPAL COMMERCIAL PAPER. Issues of municipal commercial paper which a
Series may purchase are rated P-1 by Moody's or A-1 by S&P or have insurance
through the issuer or an independent insurance company and include unsecured,
short-term, negotiable promissory notes.

<PAGE>

Municipal commercial paper is issued usually to meet temporary capital needs of
the issuer or to serve as a source of temporary construction financing. These
obligations are paid from general revenues of the issuer or are refinanced with
long-term debt. A description of commercial paper ratings is contained in
Appendix C to the SAI.

MUNICIPAL NOTES. Municipal notes which a Series may purchase will be
principally tax anticipation notes, bond anticipation notes, revenue
anticipation notes and project notes. The obligations are sold by an issuer
prior to the occurrence of another revenue producing event to bridge a financial
gap for such issuer. Municipal notes are usually general obligations of the
issuing municipality. Project notes are issued by housing agencies, but are
guaranteed by the U.S. Department of Housing and Urban Development and are
secured by the full faith and credit of the United States. Such municipal notes
must be rated MIG-1 by Moody's or SP-1 by S&P or have insurance through the
issuer or an independent insurance company. A description of municipal note
ratings is contained in Appendix B to the SAI.

VARIABLE RATE DEMAND INSTRUMENTS. VRDIs are Municipal Instruments, the
interest on which is adjusted periodically, and which allow the holder to demand
payment of all unpaid principal plus accrued interest from the issuer. A VRDI
that a Series may purchase will be selected if it meets criteria established and
designed by the Fund's Board of Trustees to minimize risk to a Series. In
addition, a VRDI must be rated MIG-1 by Moody's or SP-1 by S&P or insured by the
issuer or an independent insurance company. There is a recognized after-market
for VRDIs.

VARIABLE RATE AND FLOATING RATE NOTES. Each Series may invest in variable
rate and floating rate notes issued by municipalities. Variable rate notes
include master demand notes which are obligations permitting the holder to
invest fluctuating amounts, which may change daily without penalty, pursuant to
direct arrangements between the Series, as lender, and the borrower. The
interest rates on these notes fluctuate from time to time. The issuer of such
obligations normally has a corresponding right, after a given period, to prepay
in its discretion the outstanding principal amount of the obligations plus
accrued interest upon a specified number of days' notice to the holders of such
obligations.

The interest rate on a floating rate obligation is based on a known lending
rate, such as a bank's prime rate, and is adjusted automatically each time such
rate is adjusted. The interest rate on a variable rate obligation is adjusted
automatically at specified intervals. Frequently, such obligations are secured
by letters of credit or other credit support arrangements provided by banks.
Because these obligations are direct lending arrangements between the lender and
borrower, it is not contemplated that such instruments generally will be traded,
and there is generally no established secondary market for these obligations,
although they are redeemable at face value. Accordingly, where these
obligations are not secured by letters of credit or other credit support
arrangements, the right of the Series to redeem is dependent on the ability of
the borrower to pay agencies.

PORTFOLIO TURNOVER. Due to the large decline in the municipal bond market
during 1994, the OREGON SERIES had significant unrealized losses. The Series'
portfolio was restructured by selling holdings with losses and replacing them
with higher yielding bonds. This resulted in a portfolio turnover rate of 135%
for the fiscal year ending December 31, 1994 for the Series as opposed to 77%
for the prior fiscal year. A high rate of portfolio turnover generally leads to
transaction costs and may result in a greater number of taxable transactions.
See "Allocation of Portfolio Brokerage" in

<PAGE>

the SAI. See the SAI for the other Series' portfolio turnover rate and for more
information on portfolio turnover.

RESTRICTED AND ILLIQUID SECURITIES. Each Series may invest up to 15% of
its net assets in illiquid securities, including (1) securities that are
illiquid due to the absence of a readily available market or due to legal or
contractual restrictions on resale and (2) repurchase agreements maturing in
more than seven days. However, illiquid securities for purposes of this
limitation do not include securities eligible for resale under Rule 144A under
the Securities Act of 1933, as amended (the "1933 Act"), which each Fund's Board
of Directors or Trustees or the Adviser has determined are liquid under Board-
approved guidelines. See the SAI for more information regarding restricted and
illiquid securities.

TAXABLE SECURITIES. Each Series may invest up to 20% of its assets, on a
temporary basis, in high quality fixed income obligations, the interest on which
is subject to Federal and state or local income taxes. A Series may, for
example, invest the proceeds from the sale of portfolio securities in taxable
obligations pending the investment or reinvestment thereof in Municipal
Instruments. A Series may invest in highly liquid taxable obligations in order
to avoid the necessity of liquidating portfolio investments to meet redemptions
by Series investors. Each Series' temporary investments in taxable securities
may consist of: (1) obligations of the U.S. Government, its agencies or
instrumentalities; (2) other debt securities rated within the highest grade of
S&P or Moody's; (3) commercial paper rated in the highest grade by either of
such rating services; and (4) certificates of deposit and letters of credit.
Certificates of deposit are negotiable certificates issued against funds
deposited in a commercial bank or a savings and loan association for a definite
period of time and earning a specified return.

STATE SPECIFIC RISK FACTORS

Most of the securities in which each Series invests are issued within that
Series' state. Thus, each Series' yield and share price stability are closely
tied to conditions within that state, and to the financial conditions of that
state, its authorities and municipalities. These factors could have varying
effects on different industries or geographical areas within each state. In
addition, economic developments within a single state or region could have a
greater impact on a Series' portfolio than on an investment portfolio composed
of securities of more geographically diverse issuers. Each Series seeks to
mitigate these potential risks through careful credit risk analysis and the use
of insurance, as previously discussed. Summaries of certain relevant
information regarding each applicable state's economy is set forth below.

RISK FACTORS FOR THE ARIZONA SERIES. Arizona's economy relies in part on
services, manufacturing dominated by electrical, transportation and military
equipment, government, tourism and the military. State unemployment rates have
remained generally comparable to the national average in recent years.
Arizona's economy appears to have begun to recover from the difficulties caused
in the late eighties by the severe drop in real estate values and the lack of
stability of Arizona-based financial institutions which caused many such
institutions to be placed under control of the Resolution Trust Corporation.
Arizona's economy is beginning to expand at a moderate but consistent rate.
Restrictive government spending, weak export markets, resizing of the defense
industry and layoffs in the private sector are expected to continue to restrain
the pace of expansion. The condition of the national economy will continue to
be a significant factor influencing Arizona's economy.

<PAGE>

RISK FACTORS FOR THE CALIFORNIA SERIES. California's economy is the
largest among the fifty states. While the State's substantial population growth
during the 1980's stimulated local economic growth, it has also increased
demands on state services. Recently, population growth has slowed, even while
substantial immigration has continued, due to the fact that a significant number
of Californians have left the area.

Since June 1990, the State of California has been in a severe recession,
the worst since the 1930's. The construction, manufacturing, aerospace, exports
and financial services industries, among others, have all been severely affected
and job losses have been the worst of any post-war recession. Throughout 1993,
nonagricultural wage and salary employment -- the broadest, most currently
available measure of regional economic activity --- continued to decline. Since
reaching a peak in the Spring of 1990, California has lost over 850,000 payroll
jobs, making this by far the longest and deepest downturn of the post-World War
II era. Employment levels stabilized in late 1994 and California's unemployment
rate began to decline, falling to 7.4% from a rate of 10.1% in January, 1994.
Unemployment is expected to remain above the national average through 1995.

Major cuts in Federal defense spending are now recognized as the main
source of the recession and the largest obstacle to recovery. This year and for
the next several years to come, the principal question in the California outlook
is when and whether other elements in the State's economy can muster sufficient
strength to overcome the continuing drag of defense costs. According to the
Department of Finance, a modest recovery from the recession in California
commenced in early 1995.

The extended recession has dramatically cut State and local tax revenues.
It has also caused increased expenditures for health and welfare programs. As a
result, the State has experienced recurring budget deficits. A further
consequence of the large budget imbalances over the last several fiscal years
has been that the State depleted its available cash resources and has had to use
a series of external borrowings to meet its cash needs.

The foregoing difficulties have resulted in deteriorating credit ratings
for California's general obligation bonds in recent years. As of March 1, 1995,
such bonds are rated A by S&P and A1 by Moody's.

On January 17, 1994, a major earthquake measuring an estimated 6.8 on the
Richter Scale struck Los Angeles. Significant property damage occurred in a
four county area including Los Angeles County, Ventura County and parts of
Orange and San Bernardino Counties which were declared as State and federal
disaster areas by January 18, 1994. Estimates of total property damage (private
and public) are in the range of $15-20 billion or more.

On December 6, 1994, the County of Orange, California ("Orange County") and
the Orange County Investment Pools (an instrumentality of Orange County) (the
"Pool") filed for protection under chapter 9 of the United States Bankruptcy
Code. Pool losses are estimated to exceed $1.7 billion, but the final dollar
amount of Pool losses will not be known until the assets of the Pool are
liquidated. The Federal Bankruptcy Court approved the Pool's motion to
liquidate the investments in the Pool, but there is no guarantee that the
liquidation will be completed within the time frame initially approved, or of
the result of such liquidation.

The CALIFORNIA SERIES holds securities of certain agencies that invested in
the Pool, including the Orange County Transportation Authority ("OCTA") and the
South Orange County Public Finance

<PAGE>

Authority ("SOCPA"). At this time, there is no market in the securities, and if
a market develops, there is no guarantee that the entire amount of the
CALIFORNIA SERIES' initial investment in these securities, or past due interest,
if any, will be recovered.

As of the date of this Prospectus, all principal and interest payments have
been made by OCTA and SOCPA when due, but there is no guarantee that they will
be made in the future. Both securities issues are insured by a nationally
recognized municipal bond insurance corporation. As of the date of this
Prospectus, neither security has had its rating downgraded by a nationally
recognized rating agency. However, although each insurance company that has
insured obligations of entities who were invested in the Pool have indicated its
intention to honor its policies, there can be no assurance at this time that
each such insurance company will have the ability to pay the debt service on
these obligations when due or whether it may raise defenses with respect to such
policy.

Other government jurisdictions in California have also announced losses in
their investment funds, primarily due to investment in reverse repurchase
agreements and derivatives. These announced losses have been as high as 10% as
in the case of the San Diego County pooled investment fund. It is not possible
at this time to determine whether potential losses exceed those announced or to
determine if the CALIFORNIA SERIES holds investments in any jurisdiction that
may suffer financial losses such as Orange County's or may file for bankruptcy.

It is not currently possible to determine the impact of these fiscal and
other developments on the ability of California issuers to pay interest or repay
principal on their obligations.

RISK FACTORS FOR THE COLORADO SERIES. The State of Colorado issues no
general obligation bonds secured by the full faith and credit of the State due
to limitations contained in the State constitution. Several agencies and
instrumentalities of State government, however, are authorized by statute to
issue bonds secured by revenue from specific projects and activities.
Additionally, the State currently is authorized to issue short-term revenue
anticipation notes. The major revenue sources for most of the nearly 2000 local
governments that can issue debt instruments are the ad valorem property tax
levied at the local level and sales and use taxes. In 1993, the last year for
which such information is presently available, the assessed valuation of all
real and personal property subject to taxation in Colorado increased
approximately 1.4% from 1992 levels due to the continued growth in market values
for real property in the State. Sales and use taxes collected at the local
level in 1994 increased in approximately 84% of local governments and decreased
in approximately 16%. The Office of State Planning and Budgeting recently
forecast a "long-run expansion" for Colorado; at the same time, it suggested
that growth would be slower over the next few years. The major risks to a
continued economic recovery in Colorado are reduced federal expenditures,
particularly in the area of defense, cessation of large public works projects in
the State, and a drop in tourism caused by lack of any State-sponsored
advertising. Any of these potential events could adversely affect the Colorado
economy and therefore local government revenues. There can be no assurance that
these, or other events, will not negatively affect the market value of the
COLORADO SERIES' securities or the ability of the State or its municipalities to
pay their obligations in a timely manner.

A 1992 amendment to the State Constitution (the "TABOR Amendment")
restricts growth of State and local government spending to the rate of inflation
plus a growth factor (measured by population, school enrollment or construction,
depending on the governmental entity); and requires voter approval of all new
taxes or tax increases and the issuance of most types of debt. Though the

<PAGE>

TABOR Amendment is not expected to have an immediate effect on the credit
quality of State and local governments, it will likely reduce the financial
flexibility of all levels of government in Colorado over time. In particular,
local governments dependent on taxes on residential property are being squeezed
between the TABOR Amendment requirements of voter approval for increased mill
levies and an earlier State Constitutional amendment which has had the effect of
lowering the assessment rate on residential property from 21% to 10.25% over the
past 8 years. Younger or rapidly growing municipalities with large
infrastructure requirements may have particular difficulty finding the revenues
needed to finance their growth.

RISK FACTORS FOR THE MICHIGAN SERIES. The principal sectors of Michigan's
economy are manufacturing of durable goods (including automobiles and components
and office equipment), tourism and agriculture. The durable goods sector in
Michigan and in other states tends to be more vulnerable to economic downturns
and the component industries have been characterized as having excess capacity,
resulting in plant closings and permanent reductions in the work force, many of
which have occurred in Michigan. The Michigan unemployment rate continues to be
higher than the national unemployment rate. The market value and marketability
of bonds issued by local units of government in the State may be affected
adversely by the same factors that affect Michigan's economy generally. The
ability of the State and its local units of government to pay the principal of
and the interest on their bonds may be affected by such factors and by certain
constitutional, statutory and charter limitations.

RISK FACTORS FOR THE MINNESOTA SERIES. Minnesota's emergence as a regional
center is evidenced by employment growth in the trade, finance, insurance and
service industries. Medical equipment, business services, printing and
publishing and agriculture continue to be important components of Minnesota's
economy. The iron ore industry has declined economically because of
overcapacity and exhaustion of the high-grade resource in Minnesota.
Minnesota's economy has become less dependent on the resource-based industries,
and more dependent on other forms of manufacturing. Economic difficulties and
the resultant impact on State and local government finances may adversely affect
the market value of obligations in the portfolio of the MINNESOTA SERIES or the
ability of respective obligors to make timely payment of the principal and
interest on such obligations.

RISK FACTORS FOR THE MISSOURI SERIES. Missouri's economy is divided
primarily among agriculture, manufacturing, services, trade and government.
Missouri operates from a General Revenue Fund which includes funds received from
tax revenues and federal grants. The balance of the General Revenue Fund at the
end of fiscal year 1994 was $513.4 million. The Missouri Constitution imposes a
limit on the amount of taxes that may be imposed by the General Assembly during
any fiscal year. No assurances can be given that the amount of revenue derived
from taxes will remain at its current level or that the amount of federal grants
previously provided to the State will continue. The State of Missouri is barred
by its constitution from issuing debt instruments to fund government operations.
The State is, however, authorized to issue bonds to finance or refinance the
cost of capital projects upon approval by the voters. In the past, the State
has issued two types of bonds to raise capital - general obligation bonds and
revenue bonds. Payments on the general obligation bonds are made from the
General Revenue Fund. Therefore, if the State is unable to increase its tax
revenues, the State's ability to make the payments on the existing obligations
may be adversely affected. The State is also authorized to issue revenue bonds,
which generally provide funds for a specific project, and repayments are
generally limited to the revenues from that project. The State may, however,
enact a tax specifically to repay the State's revenue bonds. Therefore, a

<PAGE>

reduction of revenues from a project financed by revenue bonds may adversely
affect the State's ability to make payments on such bonds. No assurances can be
given that the State will receive sufficient revenues from the projects, or that
the State will enact and collect a tax to be used to make the required payments
on such bonds. The information contained herein is not intended to be a
complete discussion of all relevant risk factors for the MISSOURI SERIES, and
there may be other factors not discussed herein that may adversely affect the
value of and the payment of interest and principal on the debt obligations of
the State of Missouri and its local governmental entities.

RISK FACTORS FOR THE OHIO SERIES. The OHIO SERIES is susceptible to
general or particular political, economic or regulatory factors that may affect
issuers of Ohio Obligations. Generally, the creditworthiness of Ohio
Obligations of local issuers is unrelated to that of obligations of the State
itself, and the State has no responsibility to make payments on those local
obligations.

While diversifying more into the service and other non-manufacturing areas,
the Ohio economy continues to rely in part on durable goods manufacturing
largely concentrated in motor vehicles and equipment, steel, rubber products and
household appliances. As a result, general economic activity, as in many other
industrially-developed states, tends to be more cyclical than in some other
states and in the nation as a whole. Agriculture is an important segment of the
economy. In prior years, the State's overall unemployment rate was commonly
somewhat higher than the national figure. However, for the last four years the
State rates were below the national rates. The unemployment rate and its
effects vary among geographic areas of the State.

Local school districts in Ohio receive a major portion (state-wide
aggregate in the range of 46% in recent years) of their operating moneys from
State subsidies, but are dependent on local property taxes, and in 109 districts
from voter-authorized income taxes, for significant portions of their budgets.
Litigation, similar to that in other states, is pending questioning the
constitutionality of Ohio's system of school funding. The trial court recently
concluded that aspects of the system (including basic operating assistance) are
unconstitutional, and ordered the State to provide for and fund a system
complying with the Ohio Constitution. The State has appealed. Ohio
municipalities rely primarily on property and municipal income taxes for their
operations. For those few municipalities that on occasion have faced
significant financial problems, there are statutory procedures for monitoring
the municipality's fiscal affairs and for developing a financial plan to
eliminate deficits and cure any defaults.

There can be no assurance that future national, regional or state-wide
economic difficulties, and the resulting impact on State or local government
finances generally, will not adversely affect the market value of Ohio
Obligations held by the OHIO SERIES or the ability of particular obligors to
make timely payments of debt service on (or lease payments relating to) those
Obligations.

RISK FACTORS FOR THE OREGON SERIES. Oregon's economy historically has
relied heavily on the timber industry. Recently, the State has encouraged
diversification of the economy, with emphasis on such industries as high
technology, foreign trade and tourism, but the timber industry remains a
significant component of the economy. The vitality of that industry is
particularly vulnerable to recessionary cycles. The availability of timber for
harvesting in Oregon remains in doubt as a result of the ongoing controversy
with respect to protection of the habitat of the Northern Spotted Owl.
Environmental groups are advocating restrictions on logging to protect the
habitat of this bird, which restrictions may have a significant adverse impact
on the timber industry. The federal government is also developing and
implementing a plan to restore native salmon runs in the pacific northwest.

<PAGE>

This plan will necessarily involve some restrictions on the use of dams to
generate electricity on some of Oregon's major rivers. Oregon's economy is
heavily dependent on hydroelectric power, so it is uncertain how the salmon
recovery plan may impact the economy through utility rate increases. In
November 1990, Oregon voters approved Measure 5, a property tax limitation
measure. Measure 5 puts a cap on local ad valorem property taxes which cap is
to be phased in over time until 1996. It is uncertain how the legislature will
restructure the general fund in response to Measure 5. Alternatives may include
budget cuts, a sales tax or higher corporate and individual income taxes.
Because of the State's need to replace lost tax revenues, Measure 5 could
adversely affect the State's credit rating. If rating agencies were to lower
Oregon's credit rating, the State would have to pay a higher interest rate on
the money it borrows. There is a relatively inactive trading market for
municipal instruments of Oregon issuers in other than general obligations of the
State. The market price of these other municipal instruments may be
particularly sensitive to changes in the supply of, and the demand for, the
instruments, and, if the OREGON SERIES were forced to sell a large volume of
these instruments for any reason, the value of the OREGON SERIES' portfolio may
be adversely affected.

GENERAL. There can be no assurances that future national, regional or
state-wide economic developments will not adversely affect the market value of
Municipal Instruments held by a Series or the ability of particular obligors to
make timely payments of debt service on (or lease payments relating to) those
obligations. In addition, there can be no assurances that future court
decisions or legislative actions will not affect the ability of the issuer of a
Municipal Instrument to repay its obligations or the tax status of a Series'
distributions relating to investments in Municipal Instruments. For an expanded
discussion of the risk considerations of certain states discussed above, see the
SAI.

ALTERNATIVE PURCHASE PLANS

Each Series has two classes of shares, Class A and Class B, which represent
interests in the same portfolio of securities and have identical voting,
dividend, liquidation and other rights and the same terms and conditions, except
that each class (i) is subject to a different sales charge and bears its
separate distribution and certain other class expenses; (ii) has exclusive
voting rights with respect to matters affecting only that class; and (iii) has
different exchange privileges.

CLASS A SHARES. Class A shares are sold with an initial sales charge of up
to 6.25% of the amount invested with discounts available for volume purchases.
Class A shares are subject to a maximum 12b-1 fee at the annual rate of 0.30% of
each Series' average daily net assets attributable to Class A shares, of which
no more than 0.25% may be paid as a service fee and the balance thereof paid as
an asset-based sales charge. The initial sales charge is waived for certain
purchases and a CDSC may be imposed on such purchases. See "How to Buy Shares."

CLASS B SHARES. Class B shares are sold without an initial sales charge,
but are generally subject to a CDSC which declines in steps from 4% to 0% during
a six-year period and bear a higher 12b-1 fee than Class A shares. Class B
shares pay a 12b-1 fee at the annual rate of 1.00% of each Series' average daily
net assets attributable to Class B shares, of which no more than 0.25% may be
paid as a service fee and the balance thereof paid as an asset-based sales
charge. Class B shares automatically convert into Class A shares after eight
years. See "How to Buy Shares."

<PAGE>

FACTORS TO CONSIDER IN CHOOSING A CLASS OF SHARES. In deciding which
alternative is most suitable, an investor should consider several factors, as
discussed below. Regardless of whether an investor purchases Class A or Class B
shares, your Representative, as defined under "How to Buy Shares," receives
compensation for selling shares of a Series, which may differ for each class.

The principal advantages of purchasing Class A shares are the lower overall
expenses, the availability of quantity discounts on volume purchases and certain
account privileges which are not offered to Class B shareholders. If an
investor plans to make a substantial investment, the sales charge on Class A
shares may either be lower due to the reduced sales charges available on volume
purchases of Class A shares or waived for certain eligible purchasers. Because
of the reduced sales charge available on quantity purchases of Class A shares,
it is recommended that investments of $250,000 or more be made in Class A
shares. Investments in excess of $1,000,000 must be made in Class A shares.
Distributions paid by each Series with respect to Class A shares will also
generally be greater than those paid with respect to Class B shares because
expenses attributable to Class A shares will generally be lower.

The principal advantage of purchasing Class B shares is that, since no
initial sales charge is paid, all of an investor's money is put to work from the
outset. Furthermore, although any investment in a Series should only be viewed
as a long-term investment, if a redemption must be made soon after purchase, an
investor will pay a lower sales charge than if Class A shares had been
purchased. Conversely, because Class B shares are subject to a higher asset-
based sales charge, long-term Class B shareholders may pay more in an asset-
based sales charge than the economic equivalent of the maximum sales charge on
Class A shares. The automatic conversion of Class B shares into Class A shares
is designed to reduce the probability of this occurring.

HOW TO BUY SHARES

You may buy shares of a Series through a First Investors registered
representative ("FIC Representative") or through a registered representative
("Dealer Representative") of an unaffiliated broker-dealer ("Dealer") which is
authorized to sell shares of the Series. Your FIC Representative or Dealer
Representative (collectively, "Representative") may help you complete and submit
an application to open an account with a Series. Applications accompanied by
checks drawn on U.S. banks made payable to "FIC" received in FIC's Woodbridge
offices by the close of regular trading on the New York Stock Exchange ("NYSE"),
generally 4:00 P.M. (New York City time), will be processed and shares will be
purchased at the public offering price determined at the close of regular
trading on the NYSE on that day. The "public offering price" is defined in this
Prospectus as net asset value plus the applicable sales charge for Class A
shares and net asset value for Class B shares. Checks received after the close
of regular trading on the NYSE will be processed at the public offering price
determined at the close of regular trading on the NYSE on the next trading day.
Orders given to Representatives before the close of regular trading on the NYSE
and received by FIC at their Woodbridge offices before the close of its business
day, generally 5:00 P.M. (New York City time), will be executed at the public
offering price determined at the close of regular trading on the NYSE on that
day. Orders received by Representatives after the close of regular trading on
the NYSE or received by FIC after the close of its business day will be executed
at the public offering price determined after the close of regular trading on
the NYSE on the next trading day. It is the responsibility of Representatives
to promptly transmit orders they receive to FIC. Each Series reserves the right
to reject any application or order for its shares for any reason and to suspend
the offering of its shares.

<PAGE>

WHEN YOU OPEN A SERIES ACCOUNT, YOU MUST SPECIFY WHICH CLASS OF SHARES YOU
WISH TO PURCHASE. If not, your order will be processed as follows: (1) if you
are opening an account with a new registration with First Investors your order
will not be processed until the Series receives notification of which class of
shares to purchase; (2) if you have existing First Investors accounts solely in
either Class A shares or Class B shares with the identical registration, your
investment in the Series will be made in the same class of shares as your
existing account(s); (3) if you are an existing First Investors shareholder and
own a combination of Class A and Class B shares with an identical registration,
your investment in the Series will be made in Class B shares; and (4) if you own
in the aggregate at least $250,000 in any combination of classes, your
investment will be made in Class A shares.

INITIAL INVESTMENT IN A SERIES. You may open a Series account with as
little as $1,000. This account minimum is waived if you open an account for a
particular class of shares through a full exchange of shares of the same class
of another "Eligible Fund," as defined below. Class A share accounts opened
through an exchange of shares from First Investors Cash Management Fund, Inc. or
First Investors Tax-Exempt Money Market Fund, Inc. (collectively, "Money Market
Funds") may be subject to an initial sales charge. Automatic investment plans
allow you to open an account with as little as $50, provided you invest at least
$600 a year. See "Systematic Investing."

ADDITIONAL PURCHASES. After you make your first investment in a Series,
you may purchase additional shares of the Series by mailing a check made payable
to FIC, directly to First Investors Corporation, 10 Woodbridge Center Drive,
Woodbridge, NJ 07095-1198, Attn: Dept. CP. Include your account number on the
face of the check. There is no minimum on additional purchases of Series
shares.

ELIGIBLE FUNDS. Shares of all the funds and/or series in the First
Investors family of funds, except as noted below, are eligible to participate in
certain shareholder privileges noted in this Prospectus and the SAI (singularly,
"Eligible Fund" and, collectively, "Eligible Funds"). Shares of First Investors
Special Bond Fund, Inc., First Investors Life Series Fund and First Investors
U.S. Government Plus Fund are not deemed to be Eligible Funds. Shares of the
Money Market Funds, unless otherwise noted, are not deemed to be Eligible Funds.
Class A shares of each series of Executive Investors Trust ("Executive
Investors") are deemed to be Eligible Funds if such shares have either (a) been
acquired through an exchange from an Eligible Fund which imposes a maximum sales
charge of 6.25%, or (b) been held for at least one year from their date of
purchase.

SYSTEMATIC INVESTING

FIRST INVESTORS MONEY LINE. This service allows you to invest in a
Series through automatic deductions from your bank checking account. Scheduled
investments may be made on a bi-weekly, semi-monthly, monthly, quarterly, semi-
annual or annual basis provided a minimum total of $600 is invested per year.
Shares of the Series are purchased at the public offering price determined at
the close of business on the day your designated bank account is debited and a
confirmation will be sent to you after every transaction. You may decrease the
amount or discontinue this service at any time by calling Shareholder Services
or writing to Administrative Data Management Corp. (the "Transfer Agent"), 10
Woodbridge Center Drive, Woodbridge, NJ 07095-1198, Attn: Control Dept. To
increase the amount, send a written request to the Transfer Agent at the address
noted above, which may take up to five days to process. Money Line application
forms are available from your Representative or by calling Shareholder Services
at 1-800-423-4026.

<PAGE>

AUTOMATIC PAYROLL INVESTMENT. You also may arrange for automatic
investments into a Series on a systematic basis through salary deductions,
provided your employer has direct deposit capabilities. Shares of the Series
are purchased at the public offering price determined as of the close of
business on the day the electronic fund transfer is received by the Series, and
a confirmation will be sent to you after every transaction. You may change the
amount or discontinue the service by contacting your employer. An application
is available from your Representative or by calling Shareholder Services at 1-
800-423-4026. Arrangements must also be made with your employer's payroll
department.

CROSS-INVESTMENT OF CASH DISTRIBUTIONS. You may elect to invest in
Class A shares of a Series at net asset value all the cash distributions from
the same class of shares of another Eligible Fund. You may also elect to invest
cash distributions of a Series' Class A shares into the same class of another
Eligible Fund, including the Money Market Funds. See "Dividends and Other
Distributions." To arrange for cross-investing, call Shareholder Services at 1-
800-423-4026.

INVESTMENT OF SYSTEMATIC WITHDRAWAL PLAN PAYMENTS. You may elect to
invest in Class A shares of a Series at net asset value through payments from a
Systematic Withdrawal Plan you maintain with any other Eligible Fund. Scheduled
investments may be made on a monthly, quarterly, semi-annual or annual basis.
You may also elect to invest Systematic Withdrawal Plan payments of Class A
shares from a Series into the same class of another Eligible Fund, including the
Money Market Funds. See "How to Redeem Shares." To arrange for Systematic
Withdrawal Plan investments, call Shareholder Services at 1-800-423-4026.

CLASS A SHARES. Class A shares of each Series are sold at the public
offering price, which will vary with the size of the purchase, as shown in the
following table:

Less than $25,000. . . . . . . . 6.25% 6.67% 5.13%
$25,000 but under $50,000. . . . 5.75 6.10 4.72
$50,000 but under $100,000 . . . 5.50 5.82 4.51
$100,000 but under $250,000. . . 4.50 4.71 3.69
$250,000 but under $500,000. . . 3.50 3.63 2.87
$500,000 but under $1,000,000. . 2.50 2.56 2.05

There is no sales charge on transactions of $1 million or more, including
transactions subject to the Cumulative Purchase Privilege or a Letter of Intent.
The Underwriter will pay from its own resources a sales commission to FIC
Representatives and a concession equal to 0.90% of the amount invested to
Dealers on such purchases. If shares are purchased on or after the date of this
Prospectus and are redeemed within 24 months of purchase (this holding period is
18 months for shares purchased prior to the date of this Prospectus), a CDSC of
1.00% will be deducted from the redemption proceeds. The CDSC will be
calculated in the same manner as the CDSC on the Class B shares. See "Class B
Shares."

<PAGE>

spouse, or by the children and grandchildren under the age of 21 of any such
person; and (2) any purchase by a former officer, director, trustee or full-time
employee of the Fund, the Underwriter, the Adviser, or their affiliates, or by a
former FIC Representative; provided they had acted as such for at least five
years and had retired or otherwise terminated the relationship in good standing:

Additionally, policyholders of participating life insurance policies issued
by First Investors Life Insurance Company, an affiliate of the Adviser and
Underwriter, may elect to invest dividends earned on such policies in Class A
shares of a Series at net asset value, provided the annual dividend is at least
$50 and the policyholder has an existing account with the Series.

CUMULATIVE PURCHASE PRIVILEGE AND LETTERS OF INTENT. You may purchase
Class A shares of a Series at a reduced sales charge through the Cumulative
Purchase Privilege or by executing a Letter of Intent. You may combine your
Class A and Class B shares of any Eligible Fund (including Class B shares of the
Money Market Funds) to qualify for this reduced sales charge. Under the
Cumulative Purchase Privilege, Class A shares of a Series are available at
quantity discounts. By completing a Letter of Intent, you state your intention
to invest a specific amount in Class A shares over the next 13 months which, if
made in one lump sum, would qualify you for a reduced sales charge. For more
information, see the SAI, call your Representative or call Shareholder Services
at 1-800-423-4026.

UNITHOLDERS. Holders of certain unit trusts ("Unitholders") who have
elected to invest the entire amount of cash distributions from either principal,
interest income or capital gains or any combination thereof ("Unit
Distributions") from the following trusts may invest such Unit Distributions in
Class A shares of a Series at a reduced sales charge.

Unitholders of various series of New York Insured Municipals-Income Trust
sponsored by Van Kampen Merritt Inc. (the "New York Trust"); Unitholders of
various series of the Multistate Tax Exempt Trust sponsored by Advest Inc.; and
Unitholders of various series of the Municipal Insured National Trust, J.C.
Bradford & Co. as agent, may purchase Class A shares of a Series with Unit
Distributions at an offering price which is the net asset value per share plus a
sales charge of 1.5%. Unitholders of various series of tax-exempt trusts, other
than the New York Trust, sponsored by Van Kampen Merritt Inc. may purchase Class
A shares of a Series with Unit Distributions at an offering price which is the
net asset value per share plus a sales charge of 1.0%. Each Series' initial
minimum investment requirement is waived for purchases of Class A shares with
Unit Distributions. Shares of a Series purchased by Unitholders may be
exchanged for Class A shares of any Eligible Fund subject to the terms and
conditions set forth under "How to Exchange Shares."

CLASS B SHARES. The public offering price of Class B shares of each Series
is the next determined net asset value, with no initial sales charge imposed. A
CDSC, however, is imposed upon most redemptions of Class B shares at the rates
set forth below:

<PAGE>

CONTINGENT DEFERRED SALES CHARGE
YEAR SINCE PURCHASE AS A PERCENTAGE OF DOLLARS INVESTED
PAYMENT MADE OR REDEMPTION PROCEEDS
------------------- -----------------------------------

First . . . . . . . . . . . . 4%
Second. . . . . . . . . . . . 4
Third . . . . . . . . . . . . 3
Fourth. . . . . . . . . . . . 3
Fifth . . . . . . . . . . . . 2
Sixth . . . . . . . . . . . . 1
Seventh and thereafter. . . . 0

The CDSC will not be imposed on (1) the redemption of Class B shares
acquired as dividends or other distributions, or (2) any increase in the net
asset value of redeemed shares above their initial purchase price (in other
words, the CDSC will be imposed on the lower of net asset value or purchase
price). In determining whether a CDSC is payable on any redemption, it will be
assumed that the redemption is made first of any Class B shares acquired as
dividends or distributions, second of Class B shares that have been held for a
sufficient period of time such that the CDSC no longer is applicable to such
shares and finally of Class B shares held longest during the period of time that
a CDSC is applicable to such shares. This will result in your paying the lowest
possible CDSC.

As an example, assume an investor purchased 100 shares of Class B shares at
$10 per share for a total cost of $1,000 and in the second year after purchase,
the net asset value per share is $12 and, during such time, the investor has
acquired 10 additional Class B shares as dividends. If at such time the
investor makes his or her first redemption of 50 shares (proceeds of $600), 10
shares will not be subject to a CDSC charge because redemptions are first made
of shares acquired through dividend reinvestment. With respect to the remaining
40 shares, the charge is applied only to the original cost of $10 per share and
not to the increase in net asset value of $2 per share. Therefore, $400 of the
$600 redemption proceeds will be charged at a rate of 4.00% (the applicable rate
in the second year after purchase).

For purposes of determining the CDSC on Class B shares, all purchases made
during a calendar month will be deemed to have been made on the first business
day of that month at the average cost of all purchases made during that month.
The holding period of Class B shares acquired through an exchange with another
Eligible Fund will be calculated from the first business day of the month that
the Class B shares were initially acquired in the other Eligible Fund. The
amount of any CDSC will be paid to FIC. The CDSC imposed on the purchase of
Class B shares will be waived under certain circumstances. See "Waivers of CDSC
on Class B Shares" in the SAI.

CONVERSION OF CLASS B SHARES. A shareholder's Class B shares will
automatically convert to Class A shares approximately eight years after the date
of purchase, together with a pro rata portion of all Class B shares representing
dividends and other distributions paid in additional Class B shares. The Class
B shares so converted will no longer be subject to the higher expenses borne by
Class B shares. The conversion will be effected at the relative net asset
values per share of the two classes on the first business day of the month
following that in which the eighth anniversary of the purchase of the Class B
shares occurs. If a shareholder effects one or more exchanges between Class B
shares of the Eligible Funds during the eight-year period, the holding period
for the shares so exchanged will commence upon the date of the purchase of the
original shares. Because the per

<PAGE>

share net asset value of the Class A shares may be higher than that of the Class
B shares at the time of conversion, a shareholder may receive fewer Class A
shares than the number of Class B shares converted. See "Determination of Net
Asset Value."

GENERAL. The Underwriter may at times agree to reallow to Dealers up to an
additional 0.25% of the dollar amount of shares of the Series and/or certain
other First Investors or Executive Investors funds sold by such Dealers during a
specific period of time. From time to time, the Underwriter also will pay,
through additional reallowances or other sources, a bonus or other compensation
to Dealers which employ a Dealer Representative who sells a minimum dollar
amount of the shares of the Series and/or certain other First Investors or
Executive Investors funds during a specific period of time. Such bonus or other
compensation may take the form of reimbursement of certain seminar expenses, co-
operative advertising, or payment for travel expenses, including lodging
incurred in connection with trips taken by qualifying Dealer Representatives to
the Underwriter's principal office in New York City.

HOW TO EXCHANGE SHARES

Should your investment needs change, you may exchange, at net asset value,
shares of a Series for shares of any Eligible Fund (including the Money Market
Funds). In addition, Class A shares of a Series may be exchanged at net asset
value for units of any single payment plan ("plan") sponsored by the
Underwriter. SHARES OF A PARTICULAR CLASS MAY BE EXCHANGED ONLY FOR SHARES OF
THE SAME CLASS OF ANOTHER FUND. For example, you can exchange Class A shares of
a Series only for Class A shares of another Eligible Fund. Exchanges can only
be made into accounts registered to identical owners. If your exchange is into
a new account, it must meet the minimum investment and other requirements of the
fund or plan into which the exchange is being made. Additionally, the fund or
plan must be available for sale in the state where you reside. A $5.00 exchange
fee is charged for each exchange. However, currently this fee is being
voluntarily borne by the fund into which you are making the exchange and, thus,
that fund's shareholders are bearing the fee ratably. Before exchanging Series
shares for shares of another fund or plan, you should read the Prospectus of the
fund or plan into which the exchange is to be made. You may obtain Prospectuses
and information with respect to which funds or plans qualify for the exchange
privilege free of charge by calling Shareholder Services at 1-800-423-4026.
Exchange requests may be made in writing or by telephone (for shares held on
deposit only) if telephone privileges were elected on your application.
Exchange requests received in "good order" by the Transfer Agent before the
close of regular trading on the NYSE, generally 4:00 P.M. (New York City time),
will be processed at the net asset value determined as of the close of regular
trading on the NYSE on that day; exchange requests received after that time will
be processed on the following trading day.

EXCHANGES BY MAIL. To exchange shares by mail, you should mail requests to
Administrative Data Management Corp., 10 Woodbridge Center Drive, Woodbridge, NJ
07095-1198. Shares will be exchanged after the request is received in "good
order" by the Transfer Agent. "Good order" means that exchange requests must
state: (1) the names of the funds; (2) account numbers (if existing accounts);
(3) the dollar amount, number of shares or percentage of the account you wish to
exchange; and (4) the exchange request must be signed by all registered owners
exactly as the account is registered. If information is missing, your request
is ambiguous or the value of your account is less than the amount indicated on
your request, the exchange will not be processed. The Transfer Agent will seek
additional information from you and process the exchange on the day it

<PAGE>

receives such information. Signature guarantees may be required to process
certain exchange requests. See "How to Redeem Shares--Signature Guarantees."

EXCHANGES BY TELEPHONE. See "Telephone Transactions" for instructions on
making exchanges by telephone.

ADDITIONAL EXCHANGE INFORMATION. Exchanges should be made for investment
purposes only. A pattern of frequent exchanges may be contrary to the best
interests of a Series' other shareholders. Accordingly, each Series has the
right, at its sole discretion, to limit the amount of an exchange, reject any
exchange, or, upon 60 days' notice, materially modify or discontinue the
exchange privilege. Each Series will consider all relevant factors in
determining whether a particular frequency of exchanges is contrary to the best
interests of the Series and/or a class of the Series and its other shareholders.
Any such restriction will be made by a Series on a prospective basis only, upon
notice to the shareholder not later than ten days following such shareholder's
most recent exchange.

HOW TO REDEEM SHARES

You may redeem your Series shares at the next determined net asset value,
less any applicable CDSC, on any day the NYSE is open, directly through the
Transfer Agent. Your Representative may help you with this transaction. Shares
may be redeemed by mail or telephone (provided written authorization for
telephone transactions is on file). Redemption requests received in "good
order" by the Transfer Agent before the close of regular trading on the NYSE,
generally 4:00 P.M. (New York City time), will be processed at the net asset
value, less any applicable CDSC, determined as of the close of regular trading
on the NYSE on that day; redemption requests received after that time will be
processed on the following trading day. Payment of redemption proceeds will be
made within seven days. If the shares being redeemed were recently purchased by
check, payment may be delayed to verify that the check has been honored,
normally not more than fifteen days.

REDEMPTIONS BY MAIL. Written redemption requests should be mailed to
Administrative Data Management Corp., 10 Woodbridge Center Drive, Woodbridge, NJ
07095-1198. For your redemption request to be in good order, you must include:
(1) the name of the Series; (2) your account number; (3) the dollar amount,
number of shares or percentage of the account you want redeemed; (4) share
certificates, if issued; (5) the original signatures of all registered owners
exactly as the account is registered; (6) signature guarantees as described
below; and (7) additional documents required for redemptions by corporations,
trusts, partnerships, organizations, retirement, pension or profit sharing plans
and for requests from anyone other than the shareholder(s) of record. If
information is missing, your request is ambiguous or the value of your account
is less than the amount indicated on your request, the redemption will not be
processed. The Transfer Agent will seek additional information and process the
redemption on the day it receives such information.

<PAGE>

SIGNATURE GUARANTEES. A signature guarantee is designed to protect you,
the Series and their agents. Members of STAMP (Securities Transfer Agents
Medallion Program), MSP (New York Stock Exchange Medallion Signature Program),
SEMP (Stock Exchanges Medallion Program) or any underwriter of any issue for
which the Transfer Agent acts as transfer agent are eligible signature
guarantors. A notary public is not an acceptable guarantor. The guarantee must
be manually signed by an authorized signatory of the guarantor and the words
"Signature Guaranteed" must appear in direct association with such signature.
Although each Series reserves the right to require signature guarantees at any
other time, signature guarantees are required whenever: (1) the amount of the
redemption is $50,000 or more, (2) an exchange in the amount of $50,000 or more
is made into the Money Market Funds, (3) a redemption check is to be made
payable to someone other than the registered accountholder, other than
institutions on behalf of the shareholder, (4) a redemption check is to be
mailed to an address other than the address of record, (5) an account
registration is being transferred to another owner, (6) an account, other than
an individual, joint, UGMA or UTMA nonretirement account, is being exchanged or
redeemed, (7) the redemption request is for certificated shares, or (8) your
address of record has changed within 60 days prior to a redemption request or an
exchange to a Money Market Fund of $50,000 or more.

REDEMPTIONS BY TELEPHONE. See "Telephone Transactions" for instructions on
making redemptions by telephone.

SYSTEMATIC WITHDRAWAL PLAN. If you own noncertificated Class A shares with
a net asset value of $5,000 or more in a single Series account, you may set up a
plan for redemptions to be made automatically at regular intervals. You may
elect to have the payments (a) sent directly to you or persons you designate; or
(b) automatically invested at net asset value in shares of the same class of any
other Eligible Fund, including the Money Market Funds. The redemption proceeds,
less any applicable CDSC, will be automatically sent directly to you. See the
SAI for more information on the Systematic Withdrawal Plan. To establish a
Systematic Withdrawal Plan, call Shareholder Services at 1-800-423-4026.

REINVESTMENT AFTER REDEMPTION. If you redeem Class A or Class B shares in
your Series account, you can reinvest within ninety days from the date of
redemption all or any part of the proceeds in shares of the same class of the
same Series or any other Eligible Fund (including the Money Market Funds), at
net asset value, on the date the Transfer Agent receives your purchase request.
If you reinvest the entire proceeds of a redemption of Class B shares for which
a CDSC has been paid, you will be credited for the amount of the CDSC. If you
reinvest less than the entire proceeds, you will be credited with a pro rata
portion of the CDSC. All credits will be paid in Class B shares of the fund
into which the reinvestment is being made. The period you owned the original
Class B shares prior to redemption will be added to the period of time you own
Class B shares acquired through reinvestment for purposes of determining (a) the
applicable CDSC upon a subsequent redemption and (b) the date on which Class B
shares automatically convert to class A shares. If your reinvestment is into a
new account, it must meet the minimum investment and other requirements of the
fund into which the reinvestment is being made. To take advantage of this
option, send your reinvestment check along with a written request to the
Transfer Agent within 90 days from the date of your redemption. Include your
account number and a statement that you are taking advantage of the
"Reinvestment Privilege."

REPURCHASE THROUGH UNDERWRITER. You may redeem Class A shares for which a
certificate has been issued through a Dealer. In this event, the Underwriter,
acting as agent for each Series,

<PAGE>

will offer to repurchase or accept an offer to sell such shares at a price equal
to the net asset value next determined after the making of such offer. The
Dealer may charge you an added commission for handling any redemption
transaction.

REDEMPTION OF LOW BALANCE ACCOUNTS. Because each Series incurs certain
fixed costs in maintaining shareholder accounts, each Series may redeem without
your consent, on at least 60 days' prior written notice (which may appear on
your account statement), any Series account of Class A or Class B shares which
has a net asset value of less than $500. To avoid such redemption, you may,
during such 60-day period, purchase additional Series shares of the same class
so as to increase your account balance to the required minimum. There will be
no CDSC imposed on such redemptions of Class B shares. The Series will not
redeem accounts that fall below $500 solely as a result of a reduction in net
asset value. Accounts established under a Systematic Investment Plan which have
been discontinued prior to meeting the $1,000 minimum are subject to this
policy.

Additional information concerning how to redeem shares of the Series is
available upon request to your Representative or Shareholder Services at
1-800-423-4026.

TELEPHONE TRANSACTIONS

Provided you have selected telephone privileges on your account
application, you may redeem or exchange noncertificated shares of a Series by
calling the Special Services Department at 1-800-342-6221 weekdays (except
holidays) between 9:00 A.M. and 5:00 P.M. (New York City time). Exchange or
redemption requests received after the close of regular trading on the NYSE,
generally 4:00 P.M. (New York City time), will be processed at the net asset
value, less any applicable CDSC, determined as of the close of business on the
following business day. For your convenience, you may authorize your FIC
Representative (or your Dealer Representative, provided certain minimum sales
requirements are met) to exchange or redeem shares for you.

TELEPHONE EXCHANGES. Telephone exchanges are available between
nonretirement accounts and between IRA accounts of the same class of shares
registered in the same name. A telephone exchange also is available from an
individually registered nonretirement account to an IRA account of the same
class of shares in the same name (provided an IRA application is on file).
Telephone exchanges are not available for exchanges of Series shares for plan
units. For joint accounts, telephone exchange instructions will be accepted
from any one owner. You are limited to one telephone exchange within any 30-day
period for each account authorized. Telephone exchanges to Money Market Funds
are not available if your address of record has changed within 60 days prior to
the exchange request.

TELEPHONE REDEMPTIONS. The telephone redemption privilege may be used
provided: (1) the redemption proceeds are being mailed to the address of record;
(2) your address of record has not changed within the past 60 days; (3) the
shares to be redeemed have not been issued in certificate form; (4) the proceeds
of the redemption do not exceed $50,000; and (5) shares have not been redeemed
by telephone from the account in the past 30 days. For joint accounts,
telephone redemption instructions will be accepted from any one owner.

<PAGE>

telephone instructions, these parties use procedures which are reasonably
designed to ensure that such instructions are genuine. If the Series, the
Underwriter or their affiliates do not follow reasonable procedures, some or all
of them may be liable for any such losses. For more information on telephone
transactions see the SAI. Each Series has the right, at its sole discretion,
upon 60 days' notice, to materially modify or discontinue the telephone exchange
and redemption privilege. During times of drastic economic or market changes,
telephone exchanges or redemptions may be difficult to implement. If you
experience difficulty in making a telephone exchange or redemption, your
exchange or redemption request may be made by regular or express mail, and it
will be implemented at the next determined net asset value, less any applicable
CDSC, following receipt by the Transfer Agent.

MANAGEMENT

BOARD OF TRUSTEES. The Fund's Board of Trustees, as part of its overall
management responsibility, oversees various organizations responsible for each
Series' day-to-day management.
ADVISER. First Investors Management Company, Inc. supervises and manages
each Series' investments, determines each Series' portfolio transactions and
supervises all aspects of each Series' operations. The Adviser is a New York
corporation located at 95 Wall Street, New York, NY 10005. The Adviser
presently acts as investment adviser to 14 mutual funds. First Investors
Consolidated Corporation ("FICC") owns all of the voting common stock of the
Adviser and all of the outstanding stock of FIC and the Transfer Agent. Mr.
Glenn O. Head (and members of his family) and Mrs. Julie W. Grayson (as
executrix of the estate of her deceased husband, David D. Grayson) are
controlling persons of FICC and, therefore, jointly control the Adviser.

As compensation for its services, the Adviser receives an annual fee from
each of the Series, which is payable monthly. For the fiscal year ended
December 31, 1994, the advisory fees paid by each Series, as a percentage of
such Series' average daily net assets, net of waivers, were as follows:
CALIFORNIA SERIES - 0.50%; MICHIGAN SERIES - 0.50%; MINNESOTA SERIES - 0.25%;
and OHIO SERIES - 0.40%. The advisory fees accrued by the ARIZONA SERIES,
COLORADO SERIES, MISSOURI SERIES and OREGON SERIES were voluntarily waived by
the Adviser in their entirety.

Each Series bears all expenses of its operations other than those incurred
by the Adviser or Underwriter under the terms of its advisory or underwriting
agreements. Series expenses include, but are not limited to: the advisory fee;
shareholder servicing fees and expenses; custodian fees and expenses; legal and
auditing fees; expenses of communicating to existing shareholders, including
preparing, printing and mailing prospectuses and shareholder reports to such
shareholders; and proxy and shareholder meeting expenses.

PORTFOLIO MANAGER. Clark D. Wagner has been Portfolio Manager of each
Series since he joined FIMCO in 1991. Mr. Wagner is also Portfolio Manager for
all of First Investors municipal bond funds. In 1992, he became Chief
Investment Officer of FIMCO. Prior to joining FIMCO, Mr. Wagner was a Vice
President at General Electric Investment Corporation from 1988-1991, where he
managed a tax-exempt portfolio.

BROKERAGE. Each Series may allocate brokerage commissions, if any, to
broker-dealers in consideration of Series share distribution, but only when
execution and price are comparable to that

<PAGE>

offered by other broker-dealers. Brokerage may be directed to brokers who
provide research. See the SAI for more information on allocation of portfolio
brokerage.

UNDERWRITER. The Fund has entered into an Underwriting Agreement with
First Investors Corporation, 95 Wall Street, New York, NY 10005, as Underwriter.
The Underwriter receives all sales charges in connection with the sale of each
Series' Class A shares and all contingent deferred sales charges in connection
with each Series' Class B shares and may receive payments under a plan of
distribution. See "How to Buy Shares" and "Distribution Plans."

REGULATORY MATTERS. In June 1992, the Fund's underwriter FIC, entered into
a settlement with the Securities and Exchange Commission ("SEC") to resolve
allegations by the agency that certain of FIC's sales representatives had made
misrepresentations concerning the risks of investing in two high yield bond
funds, the First Investors Fund For Income, Inc. and the First Investors High
Yield Fund, Inc. ("High Yield Funds"), and had sold these Funds to investors for
whom they were not suitable. Without admitting or denying the SEC's
allegations, FIC: (a) consented to the entry of a final judgment enjoining it
from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule
10b-5 thereunder and Section 17(a) of the 1933 Act; (b) agreed to the entry of
an administrative order censuring it and requiring it to comply with
undertakings to improve its policies and procedures with regard to sales,
training, supervision and compliance; and (c) agreed to pay $24.7 million to
certain investors who purchased shares of the High Yield Funds from in or about
November 1984 to in or about November 1990.

FIC, FIMCO and/or certain affiliated entities and persons have entered into
settlements with regulators in 29 states to resolve allegations, similar to
those made by the SEC, concerning sales of the High Yield Funds. In October
1993, as part of settlements with Maine, Massachusetts, New York, Virginia and
Washington ("State Settlements"), FIC, FIMCO and certain affiliated entities
and persons agreed, without admitting or denying any of the allegations, (a) to
be enjoined from violating certain provisions of the state securities laws, (b)
to engage in remedial measures designed to ensure that proper sales practices
are observed in the future, and (c) to pay $7.5 million, in addition to the
$24.7 million previously paid by FIC in connection with the SEC settlement, to
investors in the High Yield Funds. In addition, as part of those settlements,
several FIC executives, including Glenn O. Head, who is an officer and Trustee
of the Fund, agreed to be suspended and enjoined temporarily from associating
with any broker-dealer in a supervisory capacity in certain of the states. On
December 8, 1993, several present and former FIC executives, including Mr. Head,
also agreed, without admitting or denying the allegations, to temporary SEC
suspensions from associating with broker-dealers and in some cases other
regulated entities in a supervisory capacity.

DISTRIBUTION PLANS

Pursuant to separate distribution plans pertaining to each Series' Class A
and Class B shares ("Class A Plan" or "Class B Plan," and collectively,
"Plans"), each Series may reimburse or compensate, as applicable, the
Underwriter for certain expenses incurred in the distribution of that Series'
shares ("distribution fees") and the servicing or maintenance of existing Series
shareholder accounts ("service fees"). Pursuant to the Plans, distribution fees
are paid for activities relating to the distribution of Series shares, including
costs of printing and dissemination of sales material or literature,
prospectuses and reports used in connection with the sale of Series shares.
Service fees are paid for the ongoing maintenance and servicing of existing
shareholder accounts, including

<PAGE>

payments to Representatives who provide shareholder liaison services to their
customers who are holders of that Series, provided they meet certain criteria.

Pursuant to the Class A Plan, the Fund's Board of Trustees, in its sole
discretion, may periodically allocate the portion of distribution fees and
services fees that the Series may spend, provided the aggregate of such fees
paid by each Series may not exceed an annual rate of 0.30% of that Series'
average daily net assets attributable to Class A shares in any one fiscal year.
Of that amount, no more than 0.25% of a Series' average daily net assets
attributable to Class A shares may be paid as service fees. Payments made to
the Underwriter under the Class A Plan may only be made for reimbursement of
specific expenses incurred in connection with distribution and service
activities.

Pursuant to the Class B Plan, each Series is authorized to pay the
Underwriter a distribution fee at the annual rate of 0.75% of that Series'
average daily net assets attributable to Class B shares and a service fee of
0.25% of the Series' average daily net assets attributable to Class B shares.
Payments made to the Underwriter under the Class B Plan will represent
compensation for distribution and service activities, not reimbursement for
specific expenses incurred.

Although Class B shares are sold without an initial sales charge, the
Underwriter pays from its own resources a sales commission to FIC
Representatives and a concession equal to 3.5% of the amount invested to Dealers
who sell Class B shares. In addition, the Underwriter will make quarterly
payments of service fees to Representatives commencing after the thirteenth
month following the initial sale of Class B shares. The Underwriter will make
such payments at an annual rate of up to 0.25% of the average net asset value of
Class B shares which are attributable to shareholders for whom the
Representatives are designated as dealer of record.

The Series may suspend or modify payments under the Plans at any time, and
payments are subject to the continuation of each Plan, the terms of any dealer
agreements between Dealers and the Underwriter and any applicable limits imposed
by the National Association of Securities Dealers, Inc. Each Series will not
carry over any fees under the Plans to the next fiscal year. See "Distribution
Plans" in the SAI for a full discussion of the various Plans.

DETERMINATION OF NET ASSET VALUE

The net asset value of each Series' shares fluctuates and is determined
separately for each class of shares. The per share net asset value of the Class
B shares will generally be lower than that of the Class A shares because of the
higher expenses borne by the Class B shares. The net asset value of shares of a
given class of each Series is determined as of the close of regular trading on
the NYSE (generally 4:00 P.M., New York City time) on each day the NYSE is open
for trading, and at such other times as the Fund's Board of Trustees deems
necessary, by dividing the market value of the securities held by such Series,
plus any cash and other assets, less all liabilities attributable to that class,
by the number of shares of the applicable class outstanding. If there is no
available market value, securities will be valued at their fair value as
determined in good faith pursuant to procedures adopted by the Fund's Board of
Trustees. The NYSE currently observes the following holidays: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.

<PAGE>

DIVIDENDS AND OTHER DISTRIBUTIONS

Dividends from net investment income are generally declared daily and paid
monthly by each Series. Unless you direct the Transfer Agent otherwise,
dividends declared on a class of shares of a Series are paid in additional
shares of that class at the net asset value generally determined as of the close
of business on the first business day of the following month. If you redeem all
of your shares of a Series at any time during a month, you are paid all
dividends declared through the day prior to the date of the redemption, together
with the proceeds of your redemption, less any applicable CDSC. Net investment
income includes interest, earned discount and other income earned on portfolio
securities less expenses.

Each Series also distributes with its regular dividend at the end of the
year substantially all of its net capital gain (the excess of net long-term
capital gain over net short-term capital loss) and net short-term capital gain,
if any, after deducting any available capital loss carryovers. Unless you
direct the Transfer Agent otherwise, these distributions are paid in additional
shares of the same class of the distributing Series at the net asset value
generally determined as of the close of business on the business day immediately
following the record date of the distribution. A Series may make an additional
distribution in any year if necessary to avoid a Federal excise tax on certain
undistributed ordinary (taxable) income and capital gain.

Dividends and other distributions paid on both classes of a Series' shares
are calculated at the same time and in the same manner. Dividends on Class B
shares of a Series are expected to be lower than those for its Class A shares
because of the higher distribution fees borne by the Class B shares. Dividends
on each class also might be affected differently by the allocation of other
class-specific expenses.

In order to be eligible to receive a dividend or other distribution, you
must own Series shares as of the close of business on the record date of the
distribution. You may elect to receive dividends and/or other distributions in
cash by notifying the Transfer Agent by telephone or in writing prior to the
record date of any such distribution. If you elect this form of payment, the
payment date generally is two weeks following the record date of any such
distribution. Your election remains in effect until you revoke it by notifying
the Transfer Agent.

You may elect to invest the entire amount of any cash distribution on Class
A shares in shares of the same class of any Eligible Fund, including the Money
Market Funds, by notifying the Transfer Agent. See "How to Buy Shares--Cross-
Investment of Cash Distributions." The investment will be made at the net asset
value per share of the other fund, generally determined as of the close of
business, on the business day immediately following the record date of any such
distribution.

A dividend or other distribution paid on a class of shares of a Series will
be paid in additional shares of that class and not in cash if any of the
following events occurs: (1) the total amount of the distribution is under $5,
(2) the Series has received notice of your death on an individual account (until
written alternate payment instructions and other necessary documents are
provided by your legal representative), or (3) a distribution check is returned
to the Transfer Agent, marked as being undeliverable, by the U.S. Postal Service
after two consecutive mailings.

<PAGE>

TAXES

FEDERAL INCOME TAX. Each Series intends to continue to qualify for
treatment as a regulated investment company under the Internal Revenue Code of
1986, as amended (the "Code"), so that it will be relieved of Federal income tax
on that part of its investment company taxable income (consisting generally of
taxable net investment income and net short-term capital gain) and net capital
gain that is distributed to its shareholders. In addition, each Series intends
to continue to qualify to pay "exempt-interest dividends" (as defined below),
which requires, among other things, that at the close of each calendar quarter
at least 50% of the value of its total assets must consist of Municipal
Instruments.

Distributions by a Series of the excess of interest income from Municipal
Instruments over certain amounts disallowed as deductions, which are designated
by the Series as "exempt-interest dividends," generally may be excluded by you
from gross income. Distributions by a Series of interest income from taxable
obligations and net short-term capital gain, if any, are taxable to you as
ordinary income to the extent of the Series' earnings and profits, whether
received in cash or paid in additional Series shares. Distributions of a
Series' realized net capital gain, if any, when designated as such, are taxable
to you as long-term capital gains, whether received in cash or paid in
additional Series shares, regardless of the length of time you have owned your
shares. If you purchase your shares shortly before the record date for a
taxable dividend or capital gain distribution, you will pay full price for the
shares and receive some portion of the price back as a taxable distribution.
You will receive an annual statement following the end of each calendar year
describing the tax status of distributions paid by your Series during that year.

Interest on indebtedness incurred or continued to purchase or carry shares
of a Series will not be deductible for Federal income tax purposes to the extent
the Series' distributions consist of exempt-interest dividends. Each Series
does not intend to invest in PABs or IDBs the interest on which is treated as a
tax preference item for purposes of the Federal alternative minimum tax.

Proposals may be introduced before Congress for the purpose of restricting
or eliminating the Federal income tax exemption for interest on Municipal
Instruments. If such a proposal were enacted, the availability of Municipal
Instruments for investment by each Series and the value of its portfolio
securities would be affected. In that event, each Series would reevaluate its
investment objective and policies.

Each Series is required to withhold 31% of all taxable dividends, capital
gain distributions and redemption proceeds payable to you after any applicable
CDSC is deducted (if you are an individual or certain other non-corporate
shareholder) if the Series is not furnished with your correct taxpayer
identification number, and that percentage of dividends and such distributions
in certain other circumstances.

<PAGE>

In these cases, any gain on the disposition of the original Class A shares will
be increased, or loss decreased, by the amount of the sales charge paid when the
shares were acquired, and that amount will increase the basis of the Eligible
Fund's shares subsequently acquired. In addition, if you purchase Series shares
within 30 days before or after redeeming other shares of that Series (regardless
of class) at a loss, all or a portion of the loss will not be deductible and
will increase the basis of the newly purchased shares.

No gain or loss will be recognized to a shareholder as a result of a
conversion of Class B shares into Class A shares.

The foregoing is only a summary of some of the important Federal income tax
considerations generally affecting each Series and its shareholders; see the SAI
for a further discussion. There may be other Federal, state or local tax
considerations applicable to a particular investor; for example, a Series'
distributions may be wholly or partly taxable under state and/or local laws.
You therefore are urged to consult your own tax adviser.

STATE INCOME TAXES.

ARIZONA. In the opinion of O'Connor, Cavanagh, Anderson, Westover,
Killingsworth & Beshears, P.A., Arizona tax counsel to MULTI-STATE INSURED,
distributions from the ARIZONA SERIES that are received by investors that are
individuals, corporations, trusts, and estates who are subject to Arizona income
tax will not be subject to tax in Arizona to the extent that those distributions
are attributable to interest on tax-exempt obligations of the State of Arizona
or interest on obligations of the United States, Puerto Rico, the Virgin Islands
or Guam. Other distributions from the ARIZONA SERIES, including those related
to short-term and long-term capital gains, generally will be taxable under
Arizona law when received by Arizona taxpayers. Interest on indebtedness
incurred (directly and indirectly) by an investor to purchase or carry an
investment in the ARIZONA SERIES should not be deductible for Arizona income tax
purposes to the extent that the ARIZONA SERIES holds tax-exempt obligations of
the state of Arizona or obligations of the United States, Puerto Rico, the
Virgin Islands or Guam.

The foregoing discussion assumes that in each taxable year the ARIZONA
SERIES qualifies and elects to be taxed as a regulated investment company for
federal income tax purposes. In addition, the foregoing discussion assumes that
in each taxable year the ARIZONA SERIES qualifies to pay exempt-interest
dividends by complying with the requirements of the Code that at least 50% of
its assets at the close of each quarter of its taxable year is invested in
state, municipal or other obligations, the interest on which is excluded from
gross income for federal income tax purposes pursuant to section 103(a) of the
Code.

CALIFORNIA. In the opinion of Parker, Milliken, Clark, O'Hara & Samuelian,
a professional corporation, California tax counsel to MULTI-STATE INSURED,
provided that the CALIFORNIA SERIES qualifies as a regulated investment company
under the Code, shareholders of the CALIFORNIA SERIES that are individuals,
estates or trusts subject to the California personal income tax will not be
required to include in their gross income, for California personal income tax
purposes, distributions made by the CALIFORNIA SERIES that are treated as
exempt-interest dividends under the Code and are attributable to interest, less
allocable nondeductible expenses, on obligations the interest from which is
exempt from taxation by the State of California pursuant to either California or
Federal law, provided that the CALIFORNIA SERIES properly designates such
exempt-interest dividends under

<PAGE>

California law and satisfies the requirement of California law that at least 50%
of its assets at the close of each quarter of its taxable year be invested in
such obligations. These exempt obligations generally include obligations issued
by California or a local government within California as well as direct U.S.
Government obligations. Direct U.S. Government obligations do not include
securities guaranteed by U.S. Government agencies such as the Federal National
Mortgage Association ("FNMA" or "Fannie Mae"), the Government National Mortgage
Association ("GNMA" or "Ginnie Mae") or similar agencies. However, a portion of
any discount attributable to a stripped tax-exempt bond or a stripped coupon may
be treated as taxable when distributed to shareholders. Additionally, through
an apparent technical error, California tax legislation enacted in 1990 makes
unclear whether exempt-interest dividends derived from interest on obligations
of U.S. possessions (i.e., Puerto Rico, the U.S. Virgin Islands and Guam) will
be treated as exempt. Distributions of the CALIFORNIA SERIES that are derived
from sources other than those described above, including interest on certain
non-California obligations such as repurchase agreements and municipal
instruments of other states, will not be treated as tax-exempt for California
personal income tax purposes and are also includable in income subject to the
California alternative minimum tax.

Distributions treated as capital gains dividends under the Code will
currently be taxed as ordinary income for California personal income tax
purposes.

Corporations subject to the California franchise tax or California
corporate income tax are required to include in their gross income and in income
subject to the corporate alternative minimum tax all distributions received from
the CALIFORNIA SERIES, including exempt-interest dividends.

As under Federal law, interest on indebtedness incurred by shareholders to
purchase or carry shares of the CALIFORNIA SERIES will not be deductible for
California personal income tax purposes. In addition, and as under Federal law,
any loss realized on the sale of shares held for six months or less will be
disallowed to the extent of any exempt-interest dividends received with respect
to such shares. Any loss realized upon the redemption of shares within thirty
days before or after the acquisition of other shares of the CALIFORNIA SERIES
may be disallowed under the "wash sale" rules, as under Federal law. The
Federal income tax rule to the effect that a sales charge is not taken into
account in determining gain or loss upon the redemption of shares within 90 days
after their purchase if the redemption proceeds are paid in additional shares in
any fund without payment of an additional sales charge pursuant to a
reinvestment right will also apply for California income tax purposes.

It is the intent of MULTI-STATE INSURED, as represented to and relied upon
by California tax counsel in rendering their opinion, that except when
acceptable investments are unavailable for the CALIFORNIA SERIES, the CALIFORNIA
SERIES will maintain at least 80% of the value of its net assets in debt
obligations of the State of California, its localities and political
subdivisions, which are exempt from regular Federal income tax and California
personal income tax.

The foregoing description relates to certain aspects of the California tax
treatment of an investment in shares of the CALIFORNIA SERIES. For purposes of
the foregoing opinion, California tax counsel has assumed, as to the CALIFORNIA
SERIES, the Federal tax treatment as set forth elsewhere in this Prospectus.
Investors may be subject to other state tax limitations depending upon their
particular situations and should consult their own tax advisers for appropriate
tax advice.

<PAGE>

COLORADO. In the opinion of Kutak Rock, Colorado tax counsel to MULTI-
STATE INSURED, shareholders of the COLORADO SERIES that are individuals, estates
or trusts subject to the Colorado personal income tax will not be required to
include in their gross income for Colorado income tax purposes, distributions
made by the COLORADO SERIES that are derived from interest on obligations issued
by the State of Colorado, or any political subdivision thereof on or after May
1, 1980 which obligations are exempt from Federal taxation under section 103(a)
of the Code. Similarly, individuals, estates and trusts may exclude from the
calculation of Colorado income tax dividend distributions from the COLORADO
SERIES to the extent attributable to interest on obligations of the United
States or its possessions. Colorado statutes provide that individuals, estates
and trusts will not be entitled to exclude from income any dividend
distributions from the COLORADO SERIES which are attributable to interest exempt
from federal income tax under Section 103(a) of the code and attributable to
obligations issued by any other state or a political subdivision thereof.

In general, corporations may exclude dividend distributions which are
attributable to interest exempt from Federal income tax under section 103(a)
from the calculation of Colorado income tax to the extent derived from
obligations issued by the State of Colorado or any political subdivision thereof
on or after May 1, 1980. Further, corporations may exclude from the calculation
of Colorado income tax, dividend distributions from the COLORADO SERIES to the
extent attributable to interest on obligations of the United States or its
possessions. Colorado statutes provide that corporations will not be entitled
to exclude from income any dividend distributions from the COLORADO SERIES which
are attributable to interest exempt from Federal income tax under section 103(a)
and attributable to obligations issued by any other state or political
subdivision thereof.

Neither capital gains recognized as a result of the sale of shares in the
COLORADO SERIES nor capital gain dividends received from the COLORADO SERIES can
be excluded for purposes of calculating the Colorado income tax by individuals,
estates, trusts or corporations. In addition, interest on indebtedness incurred
or continued by individuals, estates, trusts, or corporations to purchase or
carry shares of the COLORADO SERIES will not be deductible for Colorado income
tax purposes to the extent that the COLORADO SERIES distributions consist of
exempt-interest dividends during the applicable taxable year of such
shareholder.

Colorado has no municipal income taxes.

MICHIGAN. In the opinion of Dickinson, Wright, Moon, Van Dusen & Freeman,
Michigan tax counsel to MULTI-STATE INSURED, holders of the MICHIGAN SERIES who
are subject to the Michigan income tax or single business tax will not be
subject to the Michigan income tax or single business tax on MICHIGAN SERIES
dividends to the extent that such distributions qualify as exempt-interest
dividends of a RIC under section 852(b)(5) of the Code which are attributable to
interest on tax-exempt obligations of the State of Michigan, or its political or
governmental subdivisions, its governmental agencies or instrumentalities (as
well as certain other Federally tax-exempt obligations, the interest on which is
exempt from Michigan tax, such as certain obligations of Puerto Rico). To the
extent that distributions on the MICHIGAN SERIES are attributable to sources
other than those described in the preceding sentence, such distributions,
including, but not limited to, long or short-term capital gains, will not be
exempt from Michigan income tax or single business tax. The Michigan Department
of Treasury has issued a 1986 Bulletin stating that holders of interests in RICs
who are subject to the Michigan intangibles tax will be exempt from the tax to
the extent that the investment portfolio consists of the aforementioned
obligations. In addition, MICHIGAN SERIES shares owned by certain financial
institutions or by certain other persons subject to the Michigan

<PAGE>

single business tax are not subject to Michigan intangibles tax. To the extent
the distributions on the MICHIGAN SERIES are not subject to Michigan income tax,
they are not subject to the uniform city income tax imposed by certain Michigan
cities.

Except when acceptable investments are unavailable to the MICHIGAN SERIES,
at least 80% of the value of its net assets will be maintained in debt
obligations which are exempt from Federal income tax and Michigan income and
single business taxes.

MINNESOTA. In the opinion of Faegre & Benson, Minnesota tax counsel to
MULTI-STATE INSURED, provided that the MINNESOTA SERIES qualifies as a RIC under
the Code, shareholders of the MINNESOTA SERIES who are individuals, estates, or
trusts and who are subject to the regular Minnesota personal income tax will not
be subject under current law to such regular Minnesota tax on MINNESOTA SERIES
dividends to the extent that such distributions qualify as exempt-interest
dividends of a RIC under section 852(b)(5) of the Code which are derived from
interest on tax-exempt obligations of the State of Minnesota, or its political
or governmental subdivisions, municipalities, governmental agencies or
instrumentalities. The foregoing will apply, however, only if the portion of
the exempt-interest dividends from such Minnesota sources that is paid to all
shareholders represents 95% or more of the exempt-interest dividends that are
paid by the MINNESOTA SERIES. If the 95% test is not met, all exempt-interest
dividends that are paid by the MINNESOTA SERIES will be subject to the regular
Minnesota personal income tax. Even if the 95% test is met, to the extent that
exempt-interest dividends that are paid by the MINNESOTA SERIES are not derived
from the Minnesota sources described in the first sentence of this paragraph,
such dividends will be subject to the regular Minnesota personal income tax.
Other distributions of the MINNESOTA SERIES, including distributions from net
short-term and long-term capital gains, are generally not exempt from the
regular Minnesota personal income tax.

On March 15, 1995, the Chair of the Tax Committee of the Minnesota House of
Representatives introduced legislation in the House which provides for the
inclusion in Minnesota taxable income, in the case of individuals, estates, and
trusts, of interest income on obligations of the State of Minnesota or political
or governmental subdivisions, municipalities, or governmental agencies or
instrumentalities of the State of Minnesota, where the interest income is exempt
from federal income taxes under the Code or any other federal statute, if the
obligation was issued or sold, or if the obligation was acquired by the
taxpayer, in either an original offering or a secondary market trade, after July
1, 1995. The proposed bill also provides that exempt-interest dividends as
defined in section 852(b)(5) of the Code that are derived from the obligations
described in the previous sentence are subject to tax, in the case of
individuals, estates, and trusts, with the taxpayer's acquisition date
determined by the date the regulated investment company acquired the obligation.
If enacted, the bill would be effective for taxable years beginning after
December 31, 1994, and would subject exempt-interest dividends that are derived
from the specified obligations to the regular Minnesota personal income tax and
the Minnesota alternative minimum tax, in the case of individuals, estates, and
trusts. In order for any legislation to become law, it must be adopted by both
the Minnesota House of Representatives and the Minnesota Senate, and be signed
by the Governor.

Minnesota presently imposes an alternative minimum tax on individuals,
estates, and trusts that is based, in part, on such taxpayers' Federal
alternative minimum taxable income, which includes Federal tax preference items.
The Code provides that interest on specified private activity bonds is a Federal
tax preference item and that an exempt-interest dividend of a RIC constitutes a
Federal tax preference item to the extent of its proportionate share of the
interest on such private

<PAGE>

activity bonds. Accordingly, shareholders of the MINNESOTA SERIES who are
individuals, estates or trusts may be subject to the Minnesota alternative
minimum tax as a result of the receipt of exempt-interest dividends that are
attributable to such private activity bond interest, even though they are also
derived from the Minnesota sources described in the paragraph above. (The
MINNESOTA SERIES has no present intention of investing in tax-exempt securities
that are subject to the alternative minimum tax.) In addition, the entire
portion of exempt-interest dividends that is received by such shareholders and
that is derived from sources other than the Minnesota sources described in the
paragraph above is subject to the Minnesota alternative minimum tax. Further,
should the 95% test that is described in the paragraph above fail to be met, all
of the exempt-interest dividends that are paid by the MINNESOTA SERIES,
including all of those that are derived from the Minnesota sources described in
the paragraph above, will be subject to the Minnesota alternative minimum tax,
in the case of shareholders of the MINNESOTA SERIES who are individuals, estates
or trusts.

Subject to certain limitations that are set forth in the Minnesota rules,
MINNESOTA SERIES dividends, if any, that are derived from interest on certain
United States obligations are not subject to the regular Minnesota personal
income tax or the Minnesota alternative minimum tax, in the case of shareholders
of the MINNESOTA SERIES who are individuals, estates or trusts.

MINNESOTA SERIES distributions, including exempt-interest dividends, are
not excluded in determining the Minnesota franchise tax on corporations that is
measured by taxable income and alternative minimum taxable income. MINNESOTA
SERIES distributions may also be taken into account in certain cases in
determining the minimum fee that is imposed on corporations, S corporations and
partnerships.

Interest on indebtedness incurred or continued by a shareholder of the
MINNESOTA SERIES to purchase or carry shares of the MINNESOTA SERIES will
generally not be deductible for regular Minnesota personal income tax purposes
or Minnesota alternative minimum tax purposes, in the case of shareholders of
the MINNESOTA SERIES who are individuals, estates or trusts.

Except during temporary defensive periods or when acceptable investments
are unavailable to the MINNESOTA SERIES, at least 80% of the value of the net
assets of the MINNESOTA SERIES will be maintained in debt obligations which are
exempt from the Federal income tax and the Minnesota personal income tax. The
MINNESOTA SERIES seeks to invest so that the 95% test described in the
paragraphs above will be met.

MISSOURI. In the opinion of Shook, Hardy & Bacon P.C., Missouri tax
counsel to MULTI-STATE INSURED, if a dividend paid by the MISSOURI SERIES
qualifies as an exempt-interest dividend under the Code, the portion of such
exempt-interest dividend that is attributable to interest received by the
MISSOURI SERIES on obligations of (1) Missouri or its political subdivisions
("Missouri Obligations"), or (2) territories or possessions of the United States
(to the extent federal law exempts interest on such obligations from state
taxation), will not be subject to the Missouri income tax when received by a
shareholder of the MISSOURI SERIES, provided that the MISSOURI SERIES properly
designates such portion as an exempt dividend (a "Missouri Dividend") under
Missouri law.

At the present time, the MISSOURI SERIES does not intend to invest in
obligations the interest on which is subject to Federal income taxation.
However, to the extent any dividend (or portion thereof) paid by the MISSOURI
SERIES is attributable to net interest earned by the MISSOURI SERIES on
obligations of the United States, such dividend (or portion thereof) will not be
subject to the

<PAGE>

Missouri income tax when received by a shareholder of the MISSOURI SERIES,
provided (1) the MISSOURI SERIES properly designates such dividend (or portion
thereof) as a "State income tax exempt-interest dividend" under Missouri law,
and (2) the MISSOURI SERIES and the shareholder meet certain recordkeeping
requirements specified under Missouri law.

Except as provided in the preceding paragraphs, the State of Missouri has
no special exemption provisions for (1) dividends received by shareholders of a
RIC or (2) capital gains realized by shareholders of a RIC upon the sale or
exchange of shares of such RIC. Thus, in the case of shareholders who are
subject to the Missouri income tax and who, under applicable law, are required
to include capital gain, dividend and interest income in their Missouri taxable
income, all dividends, except Missouri dividends and dividends properly
designated as "state income tax exempt-interest dividends" under Missouri law,
paid by the MISSOURI SERIES to such shareholders, and all gains realized by such
shareholders on the redemption or sale of shares of the MISSOURI SERIES, will be
subject to the Missouri income tax.

Except as set forth in paragraph (a) below, dividends received by (1) an
individual shareholder of the MISSOURI SERIES who is not engaged in a trade or
business, or (2) any other shareholder of the MISSOURI SERIES (a "Business
Taxpayer") who holds shares of the MISSOURI SERIES for investment purposes and
not as part of its ordinary trade or business, will not be subject to the city
earnings and profits tax of St. Louis or Kansas City, Missouri (the "City Tax").
With respect to dividends received by a Business Taxpayer who holds shares as
part of its ordinary trade or business, each dividend (or portion thereof) paid
by the MISSOURI SERIES that is attributable to interest earned on Missouri
Obligations, or on obligations of the United States or its possessions, will not
be subject to the City Tax; however, except as set forth in paragraph (b) below,
other dividends received by such Business Taxpayer will be subject to the
applicable City Tax, to the extent such Business Taxpayer is otherwise subject
to such tax.

(a) The taxing authorities in St. Louis take the position that all of
the assets of a partnership or corporation having its business domicile in
St. Louis should be treated as held as part of such entity's ordinary trade or
business. Under this position, dividends received on shares of the MISSOURI
SERIES held by such partnership or corporation, whether or not held for
investment purposes, could be subject to the City Tax of St. Louis. There is no
express authority for this position, and a taxpayer could take the position that
dividends received by any corporation or partnership that holds shares of the
MISSOURI SERIES for investment purposes ("Investment Dividends") should not be
subject to the City Tax of St. Louis. Therefore, Shook, Hardy & Bacon P.C.
specifically refrains from expressing an opinion as to whether its business
domicile in St. Louis (to the extent such Investment Dividends are not
attributable to interest earned on Missouri Obligations, or on obligations of
the United States or its possessions) are subject to the City Tax of St. Louis.

(b) The enabling statutes for the City Tax do not indicate whether
obligations of territories (as opposed to possessions) of the United States are
exempt from the City Tax. Therefore, Shook, Hardy & Bacon P.C. specifically
refrains from expressing an opinion as to whether dividends attributable to
interest earned on obligations of territories of the United States are exempt
from the City Tax.

OHIO. In the opinion of Squire, Sanders & Dempsey, Ohio tax counsel to
MULTI-STATE INSURED, provided that the OHIO SERIES continues to qualify as a
regulated investment company for federal

<PAGE>

income tax purposes and that at all times at least 50 percent of the value of
the total assets of the OHIO SERIES consists of obligations issued by or on
behalf of the State of Ohio, political subdivisions thereof or agencies or
instrumentalities of the State or its political subdivisions ("Ohio
Obligations") or similar obligations of other states or their subdivisions,
shareholders of the OHIO SERIES who are otherwise subject to the Ohio personal
income tax, or municipal or school district income taxes in Ohio will not be
subject to such taxes on distributions with respect to shares of the OHIO SERIES
to the extent that such distributions are properly attributable to (1) interest
on and profits made on the sale, exchange or other disposition of Ohio
Obligations or (2) interest on obligations of the United States or its
territories or possessions or of any authority, commission or instrumentality of
the United States that is exempt from state income taxes under the laws of the
United States (e.g., obligations issued by the Governments of Puerto Rico, the
Virgin Islands and Guam and their authorities and municipalities) ("Federal and
Possessions Obligations").

It is further the opinion of Squire, Sanders & Dempsey that, subject to the
proviso stated in the previous paragraph, shareholders who are otherwise subject
to the Ohio corporation franchise tax will not be required to include
distributions with respect to shares of the OHIO SERIES in their tax base for
purposes of computing such tax on the net income basis to the extent that such
distributions are (1) properly attributable to interest on and profits made on
the sale, exchange or other disposition of Ohio Obligations, (2) attributable to
interest on Federal and Possessions Obligations, or (3) exempt-interest
dividends for Federal income tax purposes. However, shares of the OHIO SERIES
will be includable in a shareholder's tax base for purposes of computing the
Ohio corporation franchise tax on the net worth basis. Corporate shareholders
that are subject to Ohio municipal income taxes will not be subject to such tax
on distributions received from the OHIO SERIES to the extent such distributions
consist of interest on or gain from the sale, exchange, or other disposition of
Ohio Obligations.

Except as provided above, distributions with respect to shares of the OHIO
SERIES will not be exempt from the Ohio personal income tax, municipal or school
district income taxes in Ohio, or the net income base of the Ohio corporation
franchise tax.

Except when acceptable investments are unavailable to the OHIO SERIES, it
will maintain at least 80% of the value of its net assets in obligations that
are exempt from Federal income tax and that are exempt from Ohio personal income
tax and the net income base of the Ohio corporation franchise tax.

OREGON. In the opinion of Weiss, Jensen, Ellis & Howard, Oregon tax
counsel to MULTI-STATE INSURED, shareholders of the OREGON SERIES who are
subject to the Oregon personal income tax will not be required to include in
their Oregon personal income distributions from the OREGON SERIES to the extent
that (1) such distributions qualify as exempt-interest dividends of a RIC under
section 852(b)(5) of the Code that are attributable to interest from tax-exempt
obligations of the State of Oregon or its political subdivisions or authorities;
(2) such distributions are attributable to interest from obligations issued by
the territories of Guam, Puerto Rico, Samoa, Virgin Islands, or their
authorities, or the Commonwealth of Puerto Rico or its authority; or (3) such
distributions are attributable to interest from obligations issued by the U.S.
Government, its agencies and instrumentalities and are exempted from state
income tax under the laws of the United States.

To the extent that distributions from the OREGON SERIES are attributable to
sources other than those described in the preceding paragraph, such
distributions will not be exempt from the Oregon

<PAGE>

personal income tax. Also, distributions that qualify as capital gain dividends
under section 852(b)(3)(C) of the Code and that are includable in Federal gross
income will be includable as capital gains in Oregon income of a shareholder.

Interest on indebtedness incurred (directly or indirectly) by a shareholder
of the OREGON SERIES to purchase or carry shares of the OREGON SERIES will not
be deductible for purposes of the Oregon personal income tax.

Shareholders of the OREGON SERIES that are otherwise subject to the Oregon
corporate excise tax must include in income distributions with respect to shares
of the OREGON SERIES.

PERFORMANCE INFORMATION

For purposes of advertising, each Series' performance may be calculated for
each class of its shares based on average annual total return and total return.
Each of these figures reflects past performance and does not necessarily
indicate future results. Average annual total return shows the average annual
percentage change in an assumed $1,000 investment. It reflects the hypothetical
annually compounded return that would have produced the same total return if a
Series' performance had been constant over the entire period. Because average
annual total return tends to smooth out variations in a Series' return, you
should recognize that it is not the same as actual year-by-year results.
Average annual total return includes the effect of paying the maximum sales
charge (in the case of Class A shares) or the deduction of any applicable CDSC
(in the case of Class B shares) and payment of dividends and other distributions
in additional shares. One, five and ten year periods will be shown unless the
class has been in existence for a shorter period. Total return is computed
using the same calculations as average annual total return. However, the rate
expressed is the percentage change from the initial $1,000 invested to the value
of the investment at the end of the stated period. Total return calculations
assume reinvestment of dividends and other distributions.

Each Series also may advertise its yield for each class of shares. Yield
reflects investment income net of expenses over a 30-day (or one-month) period
on a Series share, expressed as an annualized percentage of the maximum offering
price per share for Class A shares and the net asset value per share for Class B
shares at the end of the period. Yield computations differ from other
accounting methods and therefore may differ from dividends actually paid or
reported net income. Each Series may also advertise its "actual distribution
rate" for each class of shares. This is computed in the same manner as yield
except that actual income dividends declared per share during the period in
questions are substituted for net investment income per share. In addition,
each Series calculates its "actual distribution rate" based upon net asset value
for dissemination to existing shareholders.

Tax-equivalent yields show the taxable yields an investor would have to
earn to equal a Series' tax-free yields. The tax-equivalent yield is calculated
similarly to the yield, except that the yield is increased using a stated income
tax rate to demonstrate the taxable yield necessary to produce an after-tax
yield equivalent to a Series' tax-free yield.

<PAGE>

performance information is contained in the Fund's Annual Report which may be
obtained without charge by contacting the Fund at 1-800-423-4026.

GENERAL INFORMATION

ORGANIZATION. The Fund was organized as a Massachusetts business trust on
October 30, 1985. In addition to the eight Series described in this Prospectus,
the following are also separate Series of the Fund:

FIRST INVESTORS CONNECTICUT INSURED TAX FREE SERIES
FIRST INVESTORS FLORIDA INSURED TAX FREE SERIES
FIRST INVESTORS GEORGIA INSURED TAX FREE SERIES
FIRST INVESTORS MARYLAND INSURED TAX FREE SERIES
FIRST INVESTORS MASSACHUSETTS INSURED TAX FREE SERIES
FIRST INVESTORS NEW JERSEY INSURED TAX FREE SERIES
FIRST INVESTORS NORTH CAROLINA INSURED TAX FREE SERIES
FIRST INVESTORS PENNSYLVANIA INSURED TAX FREE SERIES
FIRST INVESTORS VIRGINIA INSURED TAX FREE SERIES

The Fund is authorized to issue an unlimited number of shares of beneficial
interest in such separate and distinct series and classes of shares as the
Fund's Board of Trustees shall from time to time establish. The shares of
beneficial interest of the Fund are presently divided into seventeen separate
and distinct Series, each having two classes, designated Class A shares and
Class B shares. Each class of a Series represents interests in the same assets
of that Series. The classes differ in that (1) each class has exclusive voting
rights on matters affecting only that class, (2) Class A shares are subject to
an initial sales charge and relatively lower ongoing distribution fees, (3)
Class B shares bear higher ongoing distribution fees, are subject to a CDSC upon
certain redemptions and will automatically convert to Class A shares
approximately eight years after purchase, (4) each class may bear differing
amounts of certain other class-specific expenses, and (5) each class has
different exchange privileges. The Fund's Board of Trustees does not anticipate
that there will be any conflicts among the interests of the holders of the
different classes of each Series' shares. On an ongoing basis, the Fund's Board
of Trustees will consider whether any such conflict exists and, if so, take
appropriate action. The Fund does not hold annual shareholder meetings. If
requested to do so by the holders of at least 10% of the Fund's outstanding
shares, the Fund's Board of Trustees will call a special meeting of shareholders
for any purpose, including the removal of Trustees. Each share of each Series
has equal voting rights except as noted above. Each share of a Series is
entitled to participate equally in dividends and other distributions and the
proceeds of any liquidation except that, due to the higher expenses borne by the
Class B shares, such dividends and proceeds are likely to be lower for the Class
B shares than for the Class A shares.

CUSTODIAN. The Bank of New York, 48 Wall Street, New York, NY 10286, is
custodian of the securities and cash of each Series.

TRANSFER AGENT. Administrative Data Management Corp., 10 Woodbridge Center
Drive, Woodbridge, NJ 07095-1198, an affiliate of FIMCO and FIC, acts as
transfer and dividend disbursing agent for each Series and as redemption agent
for regular redemptions. The Transfer Agent's telephone number is
1-800-423-4026.

<PAGE>

SHARE CERTIFICATES. The Series do not issue share certificates unless
requested in writing to do so. The Series do not issue certificates for Class B
shares. Ownership of shares of each Series is recorded on a stock register by
the Transfer Agent and shareholders have the same rights of ownership with
respect to such shares as if certificates had been issued.

CONFIRMATIONS AND STATEMENTS. You will receive confirmations of purchases
and redemptions of shares of a Series. Statements of shares owned will be sent
to you following a transaction in the account, including payment of a dividend
or capital gain distribution in additional shares or cash.

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES. Murilyn H. Racine, as
Trustee, 15606 S. Gilbert #99, Chandler, AZ 85225 and Catherine T. McAllister,
as Trustee, 2231 Elks Lane #83, Yuma, AZ 85364 own 59.7% and 40.0%, respectively
of the Class B shares of the ARIZONA SERIES and may, therefore, each be deemeed
to control this class of that Series under the 1940 Act. Jane M. Ahring, as
Trustee, 4763 Mayflower Way, Oceanside, CA 92057 owns 76.2% of the Class B
shares of the CALIFORNIA SERIES and may, therefore, be deemed to control this
class of that Series under the 1940 Act. Raymond D. Baros and Maria C. Baros,
2640 Pegasus Dr., Colorado Springs, CO 80906 own 69.0% of the Class B shares of
the COLORADO SERIES and may, therefore, be deemed to control this class of that
Series under the 1940 Act. David C. Sanders, W 8485 Old Carney Lake Rd., Iron
Mountain, MI 49801 owns 62.0% of the Class B shares of the MICHIGAN SERIES and
may, therefore, be deemed to control this class of that Series under the 1940
Act. The Adviser owns 100.0% of the Class B shares of the MINNESOTA SERIES and
may, therefore, be deemed to control this class of that Series under the 1940
Act. The Adviser owns 100.0% of the Class B shares of the MISSOURI SERIES and
may, therefore, be deemed to control this class of that Series under the 1940
Act. James R. Hunkler, 887 West 8th Ave., Columbus, OH 43212 owns 65.4% of the
Class B shares of the OHIO SERIES and may, therefore, be deemed to control this
class of that Series under the 1940 Act. Donald L. Phillips, Sr. and Karen A.
Phillips, 18729 S. Lyons Rd., Oregon City, OR 97045 own 94.6% of the Class B
shares of the OREGON SERIES and may, therefore, be deemed to control this class
of that Series under the 1940 Act.

SHAREHOLDER INQUIRIES. Shareholder inquiries can be made by calling
Shareholder Services at 1-800-423-4026.

ANNUAL AND SEMI-ANNUAL REPORTS TO SHAREHOLDERS. It is each Series'
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 in writing or by telephone by any shareholder. Each Series will
ensure that an additional copy of such reports are sent to any shareholder who
subsequently changes his or her mailing address.

<PAGE>

TABLE OF CONTENTS
- --------------------------------------------------------------------------------

Fee Table. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . . 5
Investment Objectives and Policies . . . . . . . . . . . . . . . . . . 10
Alternative Purchase Plans . . . . . . . . . . . . . . . . . . . . . . 19
How to Buy Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . 20
How to Exchange Shares . . . . . . . . . . . . . . . . . . . . . . . . 25
How to Redeem Shares . . . . . . . . . . . . . . . . . . . . . . . . . 26
Telephone Transactions . . . . . . . . . . . . . . . . . . . . . . . . 28
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Distribution Plans . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Determination of Net Asset Value . . . . . . . . . . . . . . . . . . . 31
Dividends and Other Distributions. . . . . . . . . . . . . . . . . . . 32
Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Performance Information. . . . . . . . . . . . . . . . . . . . . . . . 41
General Information. . . . . . . . . . . . . . . . . . . . . . . . . . 42

INVESTMENT ADVISER CUSTODIAN
First Investors Management The Bank of New York
Company, Inc. 48 Wall Street
95 Wall Street New York, NY 10286
New York, NY 10005
TRANSFER AGENT
UNDERWRITER Administrative Data
First Investors Corporation Management Corp.
95 Wall Street 10 Woodbridge Center Drive
New York, NY 10005 Woodbridge, NJ 07095-1198

LEGAL COUNSEL AUDITORS
Kirkpatrick & Lockhart Tait, Weller & Baker
1800 M Street, N.W. Two Penn Center Plaza
Washington, D.C. 20036 Philadelphia, PA 19102-1707

NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS OR THE STATEMENT OF ADDITIONAL INFORMATION, AND IF GIVEN OR MADE,
SUCH INFORMATION AND REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE FUND, FIRST INVESTORS CORPORATION, OR ANY AFFILIATE THEREOF.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY OF THE SHARES OFFERED HEREBY IN ANY STATE TO ANY PERSON TO WHOM
IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH STATE.
<PAGE>

First Investors
Multi-State
Insured Tax Free Fund
- ------------------------------------

Arizona Series Minnesota Series
California Series Missouri Series
Colorado Series Ohio Series
Michigan Series Oregon Series

- ------------------------------------

Prospectus
- ------------------------------------

May 1, 1995

First Investors Logo

Logo is described as follows: the arabic numeral one separated into seven
vertical segments followed by the words "First Investors."

Vertical line from top to bottom in center of page about 1/2 inch in thickness.

The following language appears to the left of the above language in the printed
piece:

The words "BULK RATE U.S. POSTAGE PAID PERMIT NO. 7379" in a box to the right of
a circle containing the words "MAILED FROM ZIP CODE 11201" appears on the
righthand side.

The following language appears on the lefthand side:

FIRST INVESTORS MULTI-STATE INSURED TAX FREE FUND
95 WALL STREET
NEW YORK, NY 10005

First Investors Logo (as described above)
A MEMBER OF THE
FIRST INVESTORS
FINANCIAL NETWORK

FITF002

<PAGE>

FIRST INVESTORS NEW YORK INSURED TAX FREE FUND, INC.
FIRST INVESTORS MULTI-STATE INSURED TAX FREE FUND

CONNECTICUT, FLORIDA, GEORGIA, MARYLAND, MASSACHUSETTS, NEW JERSEY,
NORTH CAROLINA, PENNSYLVANIA AND VIRGINIA SERIES

95 Wall Street, New York, New York 10005/1-800-423-4026

This is a Prospectus for FIRST INVESTORS NEW YORK INSURED TAX FREE FUND,
INC. and FIRST INVESTORS MULTI-STATE INSURED TAX FREE FUND (collectively, the
"Funds"), each an open-end diversified management investment company. FIRST
INVESTORS NEW YORK INSURED TAX FREE FUND, INC. ("NEW YORK INSURED") consists of
a single investment series and FIRST INVESTORS MULTI-STATE INSURED TAX FREE FUND
("MULTI-STATE INSURED") consists of seventeen separate investment series. This
Prospectus relates to NEW YORK INSURED and the nine Series of MULTI-STATE
INSURED listed above (singularly and collectively, "Series"). Each Series sells
two classes of shares. Investors may select Class A or Class B shares, each
with a public offering price that reflects different sales charges and expense
levels. See "Alternative Purchase Plans."

NEW YORK INSURED. The investment objective of NEW YORK INSURED is to
provide a high level of interest income which is exempt from Federal income tax,
New York State and New York City personal income taxes and, for non-corporate
shareholders, the Federal alternative minimum tax.

MULTI-STATE INSURED. The investment objective of each Series of MULTI-
STATE INSURED is to achieve a high level of interest income which is exempt from
Federal income tax and, to the extent indicated for a particular Series, from
state and local income taxes for residents of that state and, for non-corporate
shareholders, the Federal alternative minimum tax.
Each Series invests primarily in tax-exempt obligations issued by or on
behalf of the states or a particular state, its municipal governments and public
authorities, as well as tax-exempt obligations issued by territories or
possessions of the United States, the interest on which is exempt from Federal
income tax, the income or other taxes of a particular state and, for non-
corporate shareholders, the Federal alternative minimum tax. Each Series'
municipal bonds are insured as to payment of principal and interest through the
issuer or under insurance policies written by independent insurance companies.
There can be no assurance that the objective of any Series will be realized.

This Prospectus sets forth concisely the information about the Series that
a prospective investor should know before investing and should be retained for
future reference. First Investors Management Company, Inc. ("FIMCO" or
"Adviser") serves as investment adviser to the Series and First Investors
Corporation ("FIC" or "Underwriter") serves as distributor of the Series'
shares. A Statement of Additional Information ("SAI"), dated May 1, 1995 (which
is incorporated by reference herein), has been filed with the Securities and
Exchange Commission. The SAI is available at no charge upon request to the
Funds at the address or telephone number indicated above.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

The date of this Prospectus is May 1, 1995

<PAGE>

FEE TABLE

The following table is intended to assist investors in understanding the
expenses associated with investing in each class of shares of a Series. Shares
of the Series issued prior to the January 12, 1995 have been designated as Class
A shares.

SHAREHOLDER TRANSACTION EXPENSES

Class A Class B
Shares Shares
--------- --------
<S> <C> <C>

Maximum Sales Load Imposed on Purchases
(as a percentage of offering price) . . . . . . . . . . . . . . . . 6.25% None
Deferred Sales Load
(as a percentage of the lower of original purchase
price or redemption proceeds) . . . . . . . . . . . . . . . . . . . None 4% in the first year;
declining to 0% after
the sixth year

Exchange Fee** None None

</TABLE>

ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)

NEW YORK INSURED 0.75% 0.75% 0.30 1.00% 0.23% 0.23% 1.28% 1.98%
CONNECTICUT SERIES 0.65+ 0.65+ 0.25 1.00 0.25+ 0.25+ 1.15+ 1.90+
FLORIDA SERIES 0.65+ 0.65+ 0.25 1.00 0.24 0.24 1.14+ 1.89+
GEORGIA SERIES 0.65+ 0.65+ 0.25 1.00 0.25+ 0.25+ 1.15+ 1.90+
MARYLAND SERIES 0.65+ 0.65+ 0.25 1.00 0.25+ 0.25+ 1.15+ 1.90+
MASSACHUSETTS SERIES 0.65+ 0.65+ 0.25 1.00 0.25 0.25 1.15+ 1.90+
NEW JERSEY SERIES 0.65+ 0.65+ 0.25 1.00 0.19 0.19 1.09+ 1.84+
NORTH CAROLINA SERIES 0.65+ 0.65+ 0.25 1.00 0.25+ 0.25+ 1.15+ 1.90+
PENNSYLVANIA SERIES 0.65+ 0.65+ 0.25 1.00 0.18 0.18 1.08+ 1.83+
VIRGINIA SERIES 0.65+ 0.65+ 0.25 1.00 0.25 0.25 1.15+ 1.90+

- ----------------
<FN>
* A contingent deferred sales charge ("CDSC") of 1.00% will be assessed on
certain redemptions of Class A shares that are purchased without a sales
charge. See "How to Buy Shares."

** Although there is a $5.00 exchange fee for exchanges into a Series, this
fee is being assumed by that Series for a minimum period ending December
31, 1995. Each Series reserves the right to change or suspend this
privilege after December 31, 1995. See "How to Exchange Shares."

+ Net of waiver and/or reimbursement.

1 Since Class B shares were not issued during each Series' prior fiscal year,
Other Expenses and Total Fund Operating Expenses are based on estimated
amounts for the fiscal year ending December 31, 1995.

2 Management Fees have been restated for each Series of MULTI-STATE INSURED.
The Adviser will waive management fees in excess of 0.65% for each Series.
Otherwise, Management Fees would be 0.75% for each Series.

3 12b-1 Fees have been restated for Class A shares of each Series of MULTI-
STATE INSURED to reflect the maximum 12b-1 Fees that may be incurred
through December 31, 1995.

<PAGE>

4 Other Expenses have been restated for certain Series of MULTI-STATE
INSURED. The Adviser will assume Other Expenses for each class of certain
Series of MULTI-STATE INSURED, other than the FLORIDA SERIES, MASSACHUSETTS
SERIES, NEW JERSEY SERIES, PENNSYLVANIA SERIES and VIRGINIA SERIES, in
excess of 0.25% for a minimum period ending December 31, 1995. Otherwise
Other Expenses for each of the remaining Series would be as follows:
CONNECTICUT SERIES - 0.27%; GEORGIA SERIES - 0.98%; MARYLAND SERIES -
0.39%; and NORTH CAROLINA SERIES - 0.49%.

5 If certain Operating Expenses were not waived or reimbursed, Total Fund
Operating Expenses for Class A shares would have been as follows:
CONNECTICUT SERIES - 1.32%; FLORIDA SERIES - 1.29%; GEORGIA SERIES - 2.03%;
MARYLAND SERIES - 1.44%; MASSACHUSETTS SERIES - 1.30%; NEW JERSEY SERIES -
1.24%; NORTH CAROLINA SERIES - 1.54%; PENNSYLVANIA SERIES - 1.23%; and
VIRGINIA SERIES - 1.30%; and for Class B shares are estimated to be as
follows: CONNECTICUT SERIES - 2.02%; FLORIDA SERIES - 1.99%; GEORGIA
SERIES - 2.73%; MARYLAND SERIES - 2.14%; MASSACHUSETTS SERIES - 2.00%; NEW
JERSEY SERIES - 1.94%; NORTH CAROLINA SERIES - 2.24%; PENNSYLVANIA SERIES -
1.93%; and VIRGINIA SERIES - 2.00%.

</TABLE>

The Example below is based on Class A expense data for each Series' fiscal
year ended December 31, 1994, except that certain Operating Expenses have been
restated as noted above. Expense data for Class B shares has been estimated
because the shares were not issued during this period.

EXAMPLE

You would pay the following expenses on a $1,000 investment, assuming (1)
5% annual return and (2) redemption at the end of each time period:

ONE YEAR THREE YEARS FIVE YEARS TEN YEARS
<S> <C> <C> <C> <C>

NEW YORK INSURED SERIES
Class A. . . . . . . . . . . . $75 $101 $128 $207
Class B. . . . . . . . . . . . 60 92 127 213

CONNECTICUT SERIES
Class A. . . . . . . . . . . . $73 $97 $122 $194
Class B. . . . . . . . . . . . 59 90 123 203

FLORIDA SERIES
Class A. . . . . . . . . . . . $73 $96 $121 $192
Class B. . . . . . . . . . . . 59 89 122 202

GEORGIA SERIES
Class A. . . . . . . . . . . . $73 $97 $122 $194
Class B. . . . . . . . . . . . 59 90 123 203

MARYLAND SERIES
Class A. . . . . . . . . . . . $73 $97 $122 $194
Class B. . . . . . . . . . . . 59 90 123 203

</TABLE>

<PAGE>

ONE YEAR THREE YEARS FIVE YEARS TEN YEARS
<S> <C> <C> <C> <C>

MASSACHUSETTS SERIES
Class A. . . . . . . . . . . . $73 $97 $122 $194
Class B. . . . . . . . . . . . 59 90 123 203

NEW JERSEY SERIES
Class A. . . . . . . . . . . . $73 $95 $119 $187
Class B. . . . . . . . . . . . 59 86 120 196

NORTH CAROLINA SERIES
Class A. . . . . . . . . . . . $73 $97 $122 $194
Class B. . . . . . . . . . . . 59 90 123 203

PENNSYLVANIA SERIES
Class A. . . . . . . . . . . . $73 $95 $118 $186
Class B. . . . . . . . . . . . 59 88 119 195

VIRGINIA SERIES
Class A. . . . . . . . . . . . $73 $97 $122 $194
Class B. . . . . . . . . . . . 59 90 123 203

</TABLE>

You would pay the following expenses on the same $1,000 investment,
assuming (1) 5% annual return and (2) no redemption at the end of each time
period:

ONE YEAR THREE YEARS FIVE YEARS TEN YEARS
<S> <C> <C> <C> <C>

NEW YORK INSURED SERIES
Class A. . . . . . . . . . . . $75 $101 $128 $207
Class B. . . . . . . . . . . . 20 62 107 213

CONNECTICUT SERIES
Class A. . . . . . . . . . . . $73 $97 $122 $194
Class B. . . . . . . . . . . . 19 60 103 203

FLORIDA SERIES
Class A. . . . . . . . . . . . $73 $96 $121 $192
Class B. . . . . . . . . . . . 19 59 102 202

GEORGIA SERIES
Class A. . . . . . . . . . . . $73 $97 $122 $194
Class B. . . . . . . . . . . . 19 60 103 203

MARYLAND SERIES
Class A. . . . . . . . . . . . $73 $97 $122 $194
Class B. . . . . . . . . . . . 19 60 103 203

MASSACHUSETTS SERIES
Class A. . . . . . . . . . . . $73 $97 $122 $194
Class B. . . . . . . . . . . . 19 60 103 203

</TABLE>

<PAGE>

ONE YEAR THREE YEARS FIVE YEARS TEN YEARS
<S> <C> <C> <C> <C>

NEW JERSEY SERIES
Class A. . . . . . . . . . . . $73 $95 $119 $187
Class B. . . . . . . . . . . . 19 58 100 196

NORTH CAROLINA SERIES
Class A. . . . . . . . . . . . $73 $97 $122 $194
Class B. . . . . . . . . . . . 19 60 103 203

PENNSYLVANIA SERIES
Class A. . . . . . . . . . . . $73 $95 $118 $186
Class B. . . . . . . . . . . . 19 58 99 195

VIRGINIA SERIES
Class A. . . . . . . . . . . . $73 $97 $122 $194
Class B. . . . . . . . . . . . 19 60 103 203

</TABLE>

THE EXPENSES IN THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION BY
THE SERIES OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES IN FUTURE YEARS MAY BE
GREATER OR LESS THAN THOSE SHOWN.

FINANCIAL HIGHLIGHTS

<PAGE>

FIRST INVESTORS NEW YORK
INSURED TAX FREE FUND, INC.

1985 . . . . . . . . . . . . $ 11.82 $.942 $1.228 $2.170 $.960 $ --
1986 . . . . . . . . . . . . 13.03 .932 1.238 2.170 .950 --
1987 . . . . . . . . . . . . 14.25 .919 (1.109) (.190) .910 --
1988 . . . . . . . . . . . . 13.15 .902 .388 1.290 .930 --
1989 . . . . . . . . . . . . 13.51 .901 .339 1.240 .880 --
1990 . . . . . . . . . . . . 13.87 .889 (.119) .770 .890 --
1991 . . . . . . . . . . . . 13.75 .881 .574 1.455 .875 --
1992 . . . . . . . . . . . . 14.33 .844 .386 1.230 .840 --
1993 . . . . . . . . . . . . 14.72 .809 .608 1.417 .820 .137
1994 . . . . . . . . . . . . 15.18 .758 (1.510) (.752) .768 --

FIRST INVESTORS MULTI-STATE
INSURED TAX FREE FUND

CONNECTICUT SERIES
10/8/90** to 12/31/90 . . . . 11.17 .034 (.014) .020 -- --
1991 . . . . . . . . . . . . 11.19 .630 .449 1.079 .625 .004
1992 . . . . . . . . . . . . 11.64 .669 .401 1.070 .660 --
1993 . . . . . . . . . . . . 12.05 .615 1.053 1.668 .625 .043
1994 . . . . . . . . . . . . 13.05 .609 (1.480) (.871) .609 --

FLORIDA SERIES
10/5/90** to 12/31/90 . . . . 11.17 .018 (.058) (.040) -- --
1991 . . . . . . . . . . . . 11.13 .658 .582 1.240 .640 .030
1992 . . . . . . . . . . . . 11.70 .702 .508 1.210 .700 --
1993 . . . . . . . . . . . . 12.21 .664 1.032 1.696 .671 .095
1994 . . . . . . . . . . . . 13.14 .642 (1.346) (.704) .646 --

GEORGIA SERIES
5/1/92** to 12/31/92 . . . . 11.17 .267 .233 .500 .250 --
1993 . . . . . . . . . . . . 11.42 .603 1.091 1.694 .619 .005
1994 . . . . . . . . . . . . 12.49 .584 (1.165) (.581) .579 --

MARYLAND SERIES
10/8/90** to 12/31/90 . . . . 11.17 .021 .189 .210 -- --
1991 . . . . . . . . . . . . 11.38 .628 .287 .915 .615 --
1992 . . . . . . . . . . . . 11.68 .669 .426 1.095 .665 --
1993 . . . . . . . . . . . . 12.11 .653 1.083 1.736 .660 .036
1994 . . . . . . . . . . . . 13.15 .644 (1.373) (.729) .651 --

FIRST INVESTORS NEW YORK
INSURED TAX FREE FUND, INC.

1985 . . . . . . . . . . . . $.960 $13.03 18.92 $ 44,606
1986 . . . . . . . . . . . . .950 14.25 17.03 83,760
1987 . . . . . . . . . . . . .910 13.15 (1.25) 103,892
1988 . . . . . . . . . . . . .930 13.51 10.10 121,017
1989 . . . . . . . . . . . . .880 13.87 9.43 150,154
1990 . . . . . . . . . . . . .890 13.75 5.81 156,022
1991 . . . . . . . . . . . . .875 14.33 10.89 162,296
1992 . . . . . . . . . . . . .840 14.72 8.84 181,389
1993 . . . . . . . . . . . . .957 15.18 9.82 211,967
1994 . . . . . . . . . . . . .768 13.66 (5.03) 193,916

FIRST INVESTORS MULTI-STATE
INSURED TAX FREE FUND

CONNECTICUT SERIES
10/8/90** to 12/31/90 . . . . -- 11.19 7.71* 625
1991 . . . . . . . . . . . . .629 11.64 9.92 5,050
1992 . . . . . . . . . . . . .660 12.05 9.49 10,828
1993 . . . . . . . . . . . . .668 13.05 14.10 17,202
1994 . . . . . . . . . . . . .609 11.57 (6.75) 14,848

FLORIDA SERIES
10/5/90** to 12/31/90 . . . . -- 11.13 (1.48)* 1,339
1991 . . . . . . . . . . . . .670 11.70 11.45 6,891
1992 . . . . . . . . . . . . .700 12.21 10.67 12,678
1993 . . . . . . . . . . . . .766 13.14 14.19 21,397
1994 . . . . . . . . . . . . .646 11.79 (5.39) 19,765

GEORGIA SERIES
5/1/92** to 12/31/92 . . . . .250 11.42 6.75* 365
1993 . . . . . . . . . . . . .624 12.49 15.16 1,469
1994 . . . . . . . . . . . . .579 11.33 (4.69) 2,065

MARYLAND SERIES
10/8/90** to 12/31/90 . . . . -- 11.38 8.08* 403
1991 . . . . . . . . . . . . .615 11.68 8.30 1,543
1992 . . . . . . . . . . . . .665 12.11 9.64 3,575
1993 . . . . . . . . . . . . .696 13.15 14.62 6,643
1994 . . . . . . . . . . . . .651 11.77 (5.59) 6,904

FIRST INVESTORS NEW YORK
INSURED TAX FREE FUND, INC.

1985 . . . . . . . . . . . . 1.18 8.02 N/A N/A 32
1986 . . . . . . . . . . . . 1.13 6.90 N/A N/A 10
1987 . . . . . . . . . . . . 1.10 6.91 N/A N/A 2
1988 . . . . . . . . . . . . 1.26 6.77 N/A N/A 21
1989 . . . . . . . . . . . . 1.14 6.57 N/A N/A 13
1990 . . . . . . . . . . . . 1.23 6.53 N/A N/A 33
1991 . . . . . . . . . . . . 1.24 6.29 N/A N/A 25
1992 . . . . . . . . . . . . 1.29 5.84 N/A N/A 46
1993 . . . . . . . . . . . . 1.27 5.35 N/A N/A 31
1994 . . . . . . . . . . . . 1.28 5.30 N/A N/A 55

FIRST INVESTORS MULTI-STATE
INSURED TAX FREE FUND

CONNECTICUT SERIES
10/8/90** to 12/31/90 . . . . -- 1.75* 1.46* .28* 0
1991 . . . . . . . . . . . . .06 5.83 1.60 4.28 35
1992 . . . . . . . . . . . . .33 5.73 1.20 4.86 46
1993 . . . . . . . . . . . . .80 4.83 1.15 4.48 29
1994 . . . . . . . . . . . . .87 5.01 1.22 4.66 63

FLORIDA SERIES
10/5/90** to 12/31/90 . . . . -- 1.20* 1.03* .17* 0
1991 . . . . . . . . . . . . .06 6.12 1.12 5.06 70
1992 . . . . . . . . . . . . .29 5.97 1.17 5.10 65
1993 . . . . . . . . . . . . .45 5.20 1.10 4.55 53
1994 . . . . . . . . . . . . .62 5.24 1.19 4.67 98

GEORGIA SERIES
5/1/92** to 12/31/92 . . . . -- 4.45* 3.32* 1.13* 53
1993 . . . . . . . . . . . . .13 4.96 1.84 3.24 50
1994 . . . . . . . . . . . . .20 4.99 1.93 3.26 78

MARYLAND SERIES
10/8/90** to 12/31/90 . . . . -- 1.69* 2.88* (1.19)* 0
1991 . . . . . . . . . . . . .05 5.74 1.88 3.92 26
1992 . . . . . . . . . . . . .20 5.72 1.38 4.55 38
1993 . . . . . . . . . . . . .45 5.16 1.28 4.33 50
1994 . . . . . . . . . . . . .45 5.27 1.34 4.37 44

6 and 7
<PAGE>

FIRST INVESTORS MULTI-STATE
INSURED TAX FREE FUND

MASSACHUSETTS SERIES
1987 . . . . . . . . . . . . $11.13 $.533 $(1.143) $ (.610) $.510 $ --
1988 . . . . . . . . . . . . 10.01 .753 .547 1.300 .770 --
1989 . . . . . . . . . . . . 10.54 .725 .345 1.070 .730 --
1990 . . . . . . . . . . . . 10.88 .748 (.038) .710 .750 --
1991 . . . . . . . . . . . . 10.84 .732 .468 1.200 .730 --
1992 . . . . . . . . . . . . 11.31 .687 .399 1.086 .676 .010
1993 . . . . . . . . . . . . 11.71 .653 .716 1.369 .660 .139
1994 . . . . . . . . . . . . 12.28 .627 (1.267) (.640) .630 --

NEW JERSEY SERIES

9/13/88** to 12/31/88 . . . . 11.13 .083 .117 .200 -- --
1989 . . . . . . . . . . . . 11.33 .797 .373 1.170 .770 --
1990 . . . . . . . . . . . . 11.73 .787 .013 .800 .800 --
1991 . . . . . . . . . . . . 11.73 .762 .548 1.310 .750 --
1992 . . . . . . . . . . . . 12.29 .716 .439 1.155 .716 .059
1993 . . . . . . . . . . . . 12.67 .680 .947 1.627 .684 .103
1994 . . . . . . . . . . . . 13.51 .659 (1.448) (.789) .661 --

NORTH CAROLINA SERIES
5/4/92** to 12/31/92 . . . . 11.17 .272 .188 .460 .260 --
1993 . . . . . . . . . . . . 11.37 .595 .962 1.557 .604 .043
1994 . . . . . . . . . . . . 12.28 .594 (1.380) (.786) .594 --

PENNSYLVANIA SERIES
4/30/90** to 12/31/90 . . . . 11.17 .296 .214 .510 .270 --
1991 . . . . . . . . . . . . 11.41 .714 .429 1.143 .695 .008
1992 . . . . . . . . . . . . 11.85 .699 .427 1.126 .716 --
1993 . . . . . . . . . . . . 12.26 .667 1.048 1.715 .663 .152
1994 . . . . . . . . . . . . 13.16 .627 (1.447) (.820) .630 --

VIRGINIA SERIES
4/30/90** to 12/31/90 . . . . 11.17 .320 .080 .400 .300 --
1991 . . . . . . . . . . . . 11.27 .715 .523 1.238 .690 .018
1992 . . . . . . . . . . . . 11.80 .683 .481 1.164 .702 .032
1993 . . . . . . . . . . . . 12.23 .636 .915 1.551 .639 .082
1994 . . . . . . . . . . . . 13.06 .611 (1.383) (.772) .608 --

FIRST INVESTORS MULTI-STATE
INSURED TAX FREE FUND

MASSACHUSETTS SERIES
1987 . . . . . . . . . . . . $.510 $10.01 5.43 $ 1,595
1988 . . . . . . . . . . . . .770 10.54 13.40 2,901
1989 . . . . . . . . . . . . .730 10.88 10.43 8,292
1990 . . . . . . . . . . . . .750 10.84 6.85 12,760
1991 . . . . . . . . . . . . .730 11.31 11.45 17,608
1992 . . . . . . . . . . . . .686 11.71 9.90 20,067
1993 . . . . . . . . . . . . .799 12.28 11.93 23,653
1994 . . . . . . . . . . . . .630 11.01 (5.30) 20,838

NEW JERSEY SERIES
9/13/88** to 12/31/88 . . . . -- 11.33 5.96* 2,148
1989 . . . . . . . . . . . . .770 11.73 10.61 17,380
1990 . . . . . . . . . . . . .800 11.73 7.10 30,686
1991 . . . . . . . . . . . . .750 12.29 11.52 42,475
1992 . . . . . . . . . . . . .775 12.67 9.74 54,372
1993 . . . . . . . . . . . . .787 13.51 13.09 64,558
1994 . . . . . . . . . . . . .661 12.06 (5.91) 55,379

NORTH CAROLINA SERIES
5/4/92** to 12/31/92 . . . . .260 11.37 6.21* 1,084
1993 . . . . . . . . . . . . .647 12.28 13.98 3,883
1994 . . . . . . . . . . . . .594 10.90 (6.45) 3,872

PENNSYLVANIA SERIES
4/30/90** to 12/31/90 . . . . .270 11.41 6.88* 6,252
1991 . . . . . . . . . . . . .703 11.85 10.24 16,118
1992 . . . . . . . . . . . . .716 12.26 9.81 26,036
1993 . . . . . . . . . . . . .815 13.16 14.28 35,514
1994 . . . . . . . . . . . . .630 11.71 (6.31) 33,542

VIRGINIA SERIES
4/30/90** to 12/31/90 . . . . .300 11.27 5.40* 3,327
1991 . . . . . . . . . . . . .708 11.80 11.31 9,756
1992 . . . . . . . . . . . . .734 12.23 10.19 16,507
1993 . . . . . . . . . . . . .721 13.06 12.94 24,684
1994 . . . . . . . . . . . . .608 11.68 (5.97) 22,325

FIRST INVESTORS MULTI-STATE
INSURED TAX FREE FUND

MASSACHUSETTS SERIES
1987 . . . . . . . . . . . . .05 6.32 1.13 5.24 16
1988 . . . . . . . . . . . . .10 7.33 1.29 6.14 31
1989 . . . . . . . . . . . . .10 6.78 1.03 5.85 11
1990 . . . . . . . . . . . . .06 7.01 .99 6.09 22
1991 . . . . . . . . . . . . .28 6.66 .99 5.94 4
1992 . . . . . . . . . . . . .70 5.99 1.17 5.52 28
1993 . . . . . . . . . . . . .90 5.37 1.15 5.12 32
1994 . . . . . . . . . . . . .95 5.45 1.20 5.20 64

NEW JERSEY SERIES
9/13/88** to 12/31/88 . . . . -- 4.95* .95* 3.99* 0
1989 . . . . . . . . . . . . .03 6.82 .92 5.93 10
1990 . . . . . . . . . . . . .10 6.93 .91 6.12 16
1991 . . . . . . . . . . . . .44 6.38 .98 5.84 22
1992 . . . . . . . . . . . . .78 5.76 1.13 5.41 42
1993 . . . . . . . . . . . . .96 5.12 1.11 4.97 44
1994 . . . . . . . . . . . . .99 5.21 1.14 5.06 60

NORTH CAROLINA SERIES
5/4/92** to 12/31/92 . . . . -- 4.53* 2.20* 2.33* 10
1993 . . . . . . . . . . . . .13 4.99 1.28 3.83 32
1994 . . . . . . . . . . . . .20 5.22 1.44 3.99 61

PENNSYLVANIA SERIES
4/30/90** to 12/31/90 . . . . .05* 5.39* 1.05* 4.39* 1
1991 . . . . . . . . . . . . .29 6.28 1.03 5.54 26
1992 . . . . . . . . . . . . .56 5.84 1.12 5.28 18
1993 . . . . . . . . . . . . .79 5.17 1.10 4.86 37
1994 . . . . . . . . . . . . .88 5.11 1.13 4.86 81

VIRGINIA SERIES
4/30/90** to 12/31/90 . . . . .08* 5.56* 1.22* 4.43* 0
1991 . . . . . . . . . . . . .13 6.32 1.10 5.36 15
1992 . . . . . . . . . . . . .56 6.75 1.22 5.09 41
1993 . . . . . . . . . . . . .81 4.97 1.16 4.62 39
1994 . . . . . . . . . . . . .85 5.01 1.20 4.66 55

</TABLE>

8 and 9
<PAGE>

INVESTMENT OBJECTIVES AND POLICIES

NEW YORK INSURED

The investment objective of NEW YORK INSURED is to provide a high level of
interest income which is exempt from Federal income tax, New York State and New
York City personal income taxes and, for non-corporate shareholders, the Federal
alternative minimum tax. NEW YORK INSURED seeks to achieve its objective by
investing at least 80% of its total assets in Municipal Instruments, as defined
below, issued by or on behalf of New York State and its municipal governments
and by public authorities in New York State, as well as by territories and
possessions of the United States and the District of Columbia and their
political subdivisions, agencies and instrumentalities, the interest on which is
exempt from Federal income tax, New York State and New York City personal income
taxes and, for non-corporate shareholders, the Federal alternative minimum tax.
See "Municipal Instruments."

MULTI-STATE INSURED

The investment objective of each Series of MULTI-STATE INSURED is to
achieve a high level of interest income which is exempt from Federal income tax
and, to the extent indicated for a particular Series, from state and local
income taxes for residents of that state and, for non-corporate shareholders,
the Federal alternative minimum tax. Each Series of MULTI-STATE INSURED seeks
to achieve its objective by investing at least 80% of its total assets in
Municipal Instruments, as defined below, issued by or on behalf of states,
territories and possessions of the United States and the District of Columbia
and their political subdivisions, agencies and instrumentalities, the interest
on which is exempt from Federal income tax, state and local income taxes in the
states for whose residents the particular Series is established and, for non-
corporate shareholders, the Federal alternative minimum tax. See "Municipal
Instruments."

GENERAL POLICIES

<PAGE>

Factors." However, in each instance such municipal bonds will be covered by the
insurance feature and thus are considered to be of higher quality than lower
rated municipal bonds without an insurance feature. See "Insurance" for a
discussion of the insurance feature. The Adviser will carefully evaluate on a
case-by-case basis whether to dispose of or retain a municipal bond which has
been downgraded in rating subsequent to its purchase by a Series. A description
of municipal bond ratings is contained in Appendix A to the SAI.

DESCRIPTION OF CERTAIN SECURITIES, OTHER INVESTMENT POLICIES AND RISK FACTORS

INSURANCE. All municipal bonds in each Series' portfolio will be insured
as to their scheduled payment of principal and interest at the time of purchase
either (1) under a Mutual Fund Insurance Policy purchased by NEW YORK INSURED
and by MULTI-STATE INSURED, on behalf of the Series, from an independent
insurance company; (2) under an insurance policy obtained subsequent to a
municipal bond's original issue (a "Secondary Market Insurance Policy") or (3)
under an insurance policy obtained by the issuer or underwriter of such
municipal bond at the time of original issuance (a "New Issue Insurance
Policy"). An insured municipal bond in the portfolio of a Series typically will
be covered by only one of the three policies. All three types of insurance
policies insure the scheduled payment of all principal and interest on the
Series' municipal bonds as they fall due. The insurance does not guarantee the
market value or yield of the insured municipal bonds or the net asset value or
yield of the shares of a Series. Investors should note that while all municipal
bonds

<PAGE>

in which the Series will invest will be insured, each Series may invest up to
35% of its total assets in portfolio securities not covered by the insurance
feature. Each Fund has purchased a Mutual Fund Insurance Policy from AMBAC
Indemnity Corporation ("AMBAC"), a Wisconsin stock insurance company with its
principal executive offices in New York City. Under certain circumstances, each
Fund may obtain such insurance from an insurer other than AMBAC, provided such
insurer has a claims-paying ability rated AAA by S&P and Aaa by Moody's.
Because these insurance premiums are paid by each Series, a Series' yield is
reduced by this expense. See "Insurance" in the SAI for a detailed discussion
of the insurance feature.

MUNICIPAL INSTRUMENTS

MUNICIPAL BONDS. Municipal bonds are debt obligations that generally
are issued to obtain funds for various public purposes and have a time to
maturity, at issuance, of more than one year. The two principal classifications
of municipal bonds are "general obligation" and "revenue" bonds. General
obligation bonds are secured by the issuer's pledge of its full faith and credit
for the payment of principal and interest. Revenue bonds generally are payable
only from revenues derived from a particular facility or class of facilities or,
in some cases, from the proceeds of a special tax or other specific revenue
source. There are variations in the security of municipal bonds, both within a
particular classification and between classifications, depending on numerous
factors. The yields on municipal bonds depend on, among other things, general
money market conditions, condition of the municipal bond market, size of a
particular offering, the maturity of the obligation and rating of the issuer.
Generally, the value of municipal bonds varies inversely to changes in interest
rates. See Appendix A to the SAI for a description of municipal bond ratings.

PRIVATE ACTIVITY BONDS OR INDUSTRIAL DEVELOPMENT BONDS. Certain types
of revenue bonds, referred to as private activity bonds ("PABs") or industrial
development bonds ("IDBs"), are issued by or on behalf of public authorities to
obtain funds to provide for various privately operated facilities, such as
airports or mass transportation facilities. Most PABs and IDBs are pure revenue
bonds and are not backed by the taxing power of the issuing agency or authority.
See "Taxes" in the SAI for a discussion of special tax consequences to
"substantial users," or persons related thereto, of facilities financed by PABs
or IDBs.

CERTIFICATES OF PARTICIPATION. COPs provide participation interests
in lease revenues and each certificate represents a proportionate interest in or
right to the lease-purchase payment made under municipal lease obligations or
installment sales contracts. In certain states, COPs constitute a majority of
new municipal financing issues. The possibility that a municipality will not
appropriate funds for lease payments is a risk of investing in COPs, although
this risk is mitigated by the fact that each COP will be covered by the
insurance feature. See "Certificates of Participation" in the SAI for further
information on COPs.

<PAGE>

VARIABLE RATE DEMAND INSTRUMENTS. VRDIs are Municipal Instruments,
the interest on which is adjusted periodically, and which allow the holder to
demand payment of all unpaid principal plus accrued interest from the issuer. A
VRDI that a Series may purchase will be selected if it meets criteria
established and designed by that Fund's Board to minimize risk to that Series.
In addition, a VRDI must be rated MIG-1 by Moody's or SP-1 by S&P or insured by
the issuer or an independent insurance company. There is a recognized after-
market for VRDIs.

VARIABLE RATE AND FLOATING RATE NOTES. Each Series may invest in
variable rate and floating rate notes issued by municipalities. Variable rate
notes include master demand notes which are obligations permitting the holder to
invest fluctuating amounts, which may change daily without penalty, pursuant to
direct arrangements between the Series, as lender, and the borrower. The
interest rates on these notes fluctuate from time to time. The issuer of such
obligations normally has a corresponding right, after a given period, to prepay
in its discretion the outstanding principal amount of the obligations plus
accrued interest upon a specified number of days' notice to the holders of such
obligations.

The interest rate on a floating rate obligation is based on a known
lending rate, such as a bank's prime rate, and is adjusted automatically each
time such rate is adjusted. The interest rate on a variable rate obligation is
adjusted automatically at specified intervals. Frequently, such obligations are
secured by letters of credit or other credit support arrangements provided by
banks. Because these obligations are direct lending arrangements between the
lender and borrower, it is not contemplated that such instruments generally will
be traded, and there is generally no established secondary market for these
obligations, although they are redeemable at face value. Accordingly, where
these obligations are not secured by letters of credit or other credit support
arrangements, the right of the Series to redeem is dependent on the ability of
the borrower to pay agencies.

TAXABLE SECURITIES. Each Series may invest up to 20% of its assets, on a
temporary basis, in high quality fixed income obligations, the interest on which
is subject to Federal and state or local

<PAGE>

income taxes. A Series may, for example, invest the proceeds from the sale of
portfolio securities in taxable obligations pending the investment or
reinvestment thereof in Municipal Instruments. A Series may invest in highly
liquid taxable obligations in order to avoid the necessity of liquidating
portfolio investments to meet redemptions by Series investors. Each Series'
temporary investments in taxable securities may consist of: (1) obligations of
the U.S. Government, its agencies or instrumentalities; (2) other debt
securities rated within the highest grade of S&P or Moody's; (3) commercial
paper rated in the highest grade by either of such rating services; and (4)
certificates of deposit and letters of credit. Certificates of deposit are
negotiable certificates issued against funds deposited in a commercial bank or a
savings and loan association for a definite period of time and earning a
specified return.

STATE SPECIFIC RISK FACTORS

RISK FACTORS FOR THE CONNECTICUT SERIES. Connecticut's economy is
generally diverse, but concentration in several important sectors, such as
manufacturing, finance, insurance and real estate, wholesale and retail trade
and services, may cause the State's economy to be adversely affected by cyclical
changes. The State government derives more than 70% of its revenue from the
collection of taxes, principally personal income, sales and use, corporation and
motor fuel taxes. The State finances a wide array of capital programs and
projects through the issuance of general obligation bonds backed by the general
taxing authority of the State and special tax obligation bonds backed by a
dedicated stream of revenue. The State has also enacted numerous statutes
enabling various municipalities in the State to issue general obligation or
project revenue bonds which are not backed by the credit of the State. The
State Comptroller reported a surplus in the State's General Fund operations for
fiscal years 1993 and 1994; however, it is expected that General Fund operations
will show a deficit for the 1995 fiscal year, the amount of which will depend
upon the outcome of pending legislation designed to reduce the deficit which was
recently submitted by the Governor. If the projected deficit is in excess of
1%, the Governor will be required to modify current appropriations levels to the
extent necessary to prevent a deficit.

RISK FACTORS FOR THE FLORIDA SERIES. Florida's economy has diversified and
has shifted emphasis from resource manufacturing and construction to tourism,
other services and trade. While Florida's dependency on the highly cyclical
construction industries has declined, detrimental developments in construction
activity have and may continue to adversely affect the Florida economy. In
addition, economic development affecting the service industry, the tourism
industry and high-tech manufacturing could have severe effects on the Florida
economy. Due to the development of amusement and educational theme parks, the
seasonal and cyclical character of Florida's tourist industry has been reduced.
However, a decline in the national economy, competition from other tourist
destinations, crime and international developments (particularly currency
fluctuations) all

<PAGE>

may affect Florida tourism. While Florida's population growth has traditionally
helped its economy to perform above the national average, the rapid population
growth experienced by the State in the 1980s is not expected to be repeated in
the 1990s. Due to the large number of retirees, Florida personal income has
generally been insulated from certain national economic effects. A reduction in
the number of retirees moving to Florida and an increasing native birthrate may
increase the susceptibility of Florida's economy to national economic effects
affecting personal income. In addition, the economic well-being of Florida's
retirees could be adversely affected by cuts in the federal Medicare and
Medicaid dollars available to the elderly as well as cuts in Social Security and
other entitlements. In addition, various limitations on the State of Florida,
its governmental agencies and Florida local governmental agencies may inhibit
the ability of the issuers to repay existing municipal indebtedness and issue
additional indebtedness. The Florida constitution and statutes require a
balanced budget which may affect the ability of Florida to issue and/or repay
its obligations. The value of Florida municipal instruments may also be
affected by general conditions in the money markets or the municipal bond
markets, the levels of Federal income tax rates, the supply of tax-exempt bonds,
the credit quality and rating of the issues and perceptions with respect to the
level of interest rates.

RISK FACTORS FOR THE GEORGIA SERIES. The GEORGIA SERIES will concentrate
its investments in debt obligations of the State of Georgia and guaranteed
revenue debt of its instrumentalities (the "Georgia Obligations"). The Georgia
Obligations may be adversely affected by economic and political conditions and
developments within the State. In both economic and demographic arenas,
Georgia's growth continues to exceed that of the United States and its
neighboring Southeastern states. Georgia's economy is expected to improve in
most sectors during 1995, and anticipated job and economic growth will increase
as the 1996 Summer Olympics in Atlanta approach. The unemployment rate in
Georgia is currently at one of its lowest levels of the past twenty years and
continues to be below the national average. Georgia is experiencing a continued
growth in population, a rise in personal income that outpaces the national
average, stability in real estate values and increased revenues. Actual
revenues for the State of Georgia have increased in each of the past five years
along with an increase in the amount of taxes and fees collected. Recent
legislation in Georgia has also lowered taxes for both businesses and
individuals. Should the above-mentioned trends slow or reverse themselves, the
Georgia economy and State revenues could be adversely affected. There can be no
assurance that these, or other events, will not negatively affect the market
value of the Georgia Obligations or the ability of either the State or its
instrumentalities to pay interest and repay principal on the Georgia Obligations
in a timely manner.

RISK FACTORS FOR THE MARYLAND SERIES. Maryland's rate of economic growth
has been slower in the early 1990's than it had been during the 1980's. State
revenues in recent years have been less than expected and, because Maryland's
constitution requires a balanced budget, expenditures were cut. The public
indebtedness of Maryland and its instrumentalities is divided into three basic
types. The State issues general obligation bonds for capital improvements and
for various State-sponsored projects. The Department of Transportation of
Maryland issues limited, special obligation bonds for transportation purposes
payable primarily from specific, fixed-rate excise taxes and other revenues
related mainly to highway use. Certain authorities issue obligations payable
solely from specific non-tax enterprise fund revenues, for which the State has
no liability and has given no moral obligation assurance. While the ratings
assigned to Maryland municipal instruments by nationally recognized statistical
ratings organizations indicate that Maryland and its principal subdivisions and
agencies are overall in satisfactory economic health, there can, of course, be
no assurance that this will continue or that particular bond issues may not be
adversely affected by changes in state or local

<PAGE>

economic or political conditions. Maryland tax-free securities include
obligations issued by the State of Maryland or its counties, municipalities,
authorities, or other subdivisions. The performance of these securities is
closely tied to economic and political conditions within the State.

RISK FACTORS FOR THE MASSACHUSETTS SERIES. The Commonwealth of
Massachusetts and certain of its cities and towns have at certain times in the
past experienced serious financial difficulties which have adversely affected
their credit standing. The recurrence of such financial difficulties could
adversely affect the market values and marketability of, or result in default in
payment on, outstanding obligations issued by the Commonwealth or its public
authorities or municipalities. In addition, recent developments regarding the
Massachusetts statutes which limit the taxing authority of certain Massachusetts
governmental entities may impair the ability of the issuers of some
Massachusetts tax-exempt obligations to maintain debt service on their
obligations. In Massachusetts, the tax on personal property and real estate is
the principal source of tax revenues available to cities and towns to meet local
costs. "Proposition 2 1/2," an initiative petition adopted by the voters of the
Commonwealth of Massachusetts in November 1980, limits the power of
Massachusetts cities and towns and certain tax-supported districts and public
agencies to raise revenue from property taxes to support their operations,
including the payment of debt service. Proposition 2 1/2 required many cities
and towns to reduce their property tax levies to a stated percentage of the full
and fair cash value of their taxable real estate and personal property and
limited the amount by which the total property taxes assessed by all cities and
towns might increase from year to year. The reduction in local revenues and
anticipated reductions in local personnel and services resulting from
Proposition 2 1/2 created strong demand for substantial increases in
Commonwealth funded local aid, which increased significantly in fiscal years
1982 through 1989. The effect of this increase in local aid was to shift a
major part of the impact of Proposition 2 1/2 to the Commonwealth. Because of
decreased Commonwealth revenues, local aid declined significantly in fiscal
years 1990-92, but increased somewhat in fiscal 1993 and fiscal 1994 and is
expected to increase again in fiscal 1995. See the SAI for an expanded
discussion of the risk considerations for the MASSACHUSETTS SERIES.

RISK FACTORS FOR THE NEW JERSEY SERIES. New Jersey has a diversified
economic base consisting of, among others, commerce and service industries,
selective commercial agriculture, insurance, tourism, petroleum refining and
manufacturing, although New Jersey's manufacturing industry has shown a downward
trend in the last few years. New Jersey is a major recipient of Federal
assistance. Hence, a decrease in Federal financial assistance may adversely
affect New Jersey's financial condition. As a result of high levels of
unemployment in the 1970's, New Jersey defaulted on employment benefits in 1974
and received advances from the U.S. Department of Labor in order to continue
meeting benefit obligations. In the early 1980's New Jersey's trust fund for
unemployment insurance was bankrupt and until 1984 the trust fund was subject to
a Federal penalty surtax. While New Jersey's economic base has become more
diversified over time and thus its economy appears to be less vulnerable during
recessionary periods, a recurrence of high levels of unemployment could
adversely affect New Jersey's overall economy and its ability to meet its
financial obligations. New Jersey law requires a municipality to maintain a
balanced budget and generally to restrict increases of certain appropriations,
excluding debt service, to the lesser of a certain price index or 5% annually.
Maintaining a balanced budget may adversely affect a municipality's ability to
repay its obligations. The value of New Jersey obligations may also be affected
by general conditions in the money markets or the municipal bond markets, the
levels of Federal and New Jersey income tax rates, the supply of tax-exempt
bonds, the size of the particular

<PAGE>

offering, the maturity of the obligation, the credit quality and rating of the
issue and perceptions with respect to the level of interest rates.

RISK FACTORS FOR NEW YORK INSURED. New York is still experiencing
financial difficulties as a result of the national recession that commenced in
mid-1990. Although a recovery commenced near the start of the 1993 calendar
year, the recession had been more severe in the State owing to a significant
retrenchment in the financial services industry, cutbacks in defense spending,
and an overbuilt real estate market. Although the recovery is expected to
continue, there can be no assurance that the State economy will not experience
worse than predicted results. NEW YORK INSURED'S performance is closely tied to
conditions within the State and its authorities and municipalities, particularly
the City of New York (the "City"). To the extent the State experiences economic
difficulties, its ability to assist its public authorities and subdivisions is
impaired. Debt service on outstanding obligations of the State's authorities
("Authorities") is normally paid out of revenues generated by the Authorities'
projects, such as fares, user fees, bridge and tunnel tolls and rentals for
dormitory rooms and housing. In recent years, however, the State has provided
special financial assistance, in some cases on a recurring basis, to certain
Authorities for operating and other expenses, and for debt service pursuant to
moral obligations indebtedness provisions or otherwise. Certain Authorities
continue to experience financial difficulties. Failure of the State to
appropriate necessary amounts or to take other action to permit the Authorities
to meet their obligations could result in a default by one or more of the
Authorities. If a default were to occur, it would likely have a significant
adverse effect on the market price of obligations of the State and its
Authorities. The fiscal health of the State is closely related to that of its
localities, including the City. Primarily as a result of falling tax revenues,
the City faces substantial budget gaps for upcoming fiscal years that require
significant actions be taken by the City, including reductions in spending and
tax increases. Certain lawsuits pending against the State or its officers or
employees could have a substantial or long-term adverse effect on State
finances. There are also outstanding claims against the City and other
localities in the State. The State has historically been one of the wealthiest
states in the nation. For decades, however, the State economy has grown more
slowly than that of the nation as a whole, resulting in the gradual erosion of
its relative economic affluence. The causes of the relative decline are varied
and complex, in many cases involving national and international developments
beyond the State's control. Part of the reasons for the long-term relative
decline in the State's economy has been attributed to the combined State and
local tax burden, which is among the highest in the nation. The existence of
this tax burden limits the State's ability to impose higher taxes in the event
of future financial difficulties.

RISK FACTORS FOR THE NORTH CAROLINA SERIES. The following information
discusses certain North Carolina risk factors arising from the NORTH CAROLINA
SERIES relating to investment in North Carolina State and municipal securities
and the general economic climate of the State of North Carolina. This
information constitutes only a brief discussion, does not purport to be a
complete description, and is based on information obtained from governmental
agencies. For a more expansive and detailed discussion, see the SAI.

In North Carolina the issuance of municipal debt is overseen by the North
Carolina Local Government Commission. This Commission handles the approval,
sale and delivery of all local bonds and notes issued in North Carolina and
monitors fiscal accounting standards prescribed by the Local Government Budget
and Fiscal Control Act. No unit of local government can incur bonded
indebtedness without the Commission's prior approval. If approved, the
obligations are sold by the

<PAGE>

Commission on a sealed bid basis. The Commission then monitors the local unit's
debt service through a system of monthly reports.

Over the past twenty years, North Carolina State debt obligations have
maintained ratings of Aaa by Moody's and AAA by S&P. There can be no assurance
that the State's current ratings will be maintained for any given period or that
such ratings will not be lowered, suspended or withdrawn entirely by either
rating agency.

North Carolina State and municipal securities may be adversely affected by
economic and political conditions and developments within the State of North
Carolina. The North Carolina Constitution requires that the total expenditures
of the State for the fiscal period covered by the budget shall not exceed the
total receipts during that fiscal period plus the surplus remaining in the State
Treasury at the beginning of the period. The State has not realized any revenue
shortfalls in recent fiscal years. For the two most recent fiscal periods
ending June 30, 1993 and 1994, the State realized budgetary credit balances of
approximately $578.9 million and $887.5 million, respectively. However, during
the 1989-90 and 1990-91 fiscal years, the State had revenue shortfalls of
approximately $346.2 million and $727.3 million, respectively, requiring the
Governor and General Assembly to mandate significant spending constraints
through reductions in spending authorizations and hiring restrictions to fulfill
the constitutional requirement of maintaining a balanced budget. Therefore,
even though the State has not experienced any revenue shortfalls in recent
years, there is no guarantee that budgetary credit balances will continue to be
realized in future periods.

During 1994 the North Carolina General Assembly held a special session
where $256.6 million worth of anti-crime legislation was passed. This anti-
crime legislation will be funded from beginning budgetary credit balances and
operational revenues. The Regular Session of the 1994 General Assembly
authorized additional General Fund expenditures of $1.02 billion in excess of
the previously authorized 1994-95 budget. A major portion of these additional
expenses consists of a $427.1 million compensation package for public school
teachers, state employees and employees of stated-funded local programs. The
funding of these additional expenditures is to come from the collection of
additional revenues and a reduction in existing programs. The SAI provides a
detailed summary of specific legislation and litigation that may have a
potential economic impact on the fiscal condition of the State and its political
subdivisions.

The economic profile of the State consists of a combination of industry,
agriculture and tourism. The labor force has undergone significant changes
during recent years. The State has moved from a predominantly agricultural
economy to a service and goods producing economy. According to the North
Carolina Employment Security Commission, the labor force grew 4.7% to 3,608,200
by February 1995 from 3,445,000 in 1991. North Carolina's largest segment of
employment is in the manufacturing industry where an estimated 871,500 jobs
existed in January 1995 in contrast to 826,100 in 1991. Total non-agricultural
wage and salary employment accounted for approximately 3,436,800 jobs in January
1995 (compared to 3,072,200 jobs in 1991) with the majority of this employment
spread among manufacturing, retail trade, services and the government sector.
The Employment Security Commission estimates the unadjusted unemployment rate in
February 1995 to have been 5.0% of the labor force, as compared with a national
unemployment rate of 5.9%. The North Carolina annual unemployment rate over the
past six years has ranged from a high of 5.9% in 1992 to a low of 3.5% in 1989.
The effect of these changes in the State's economic profile can be seen in the
SAI, which provides a figurative breakdown of the State's population, labor
force, employment and revenue from various employment areas.

<PAGE>

RISK FACTORS FOR THE PENNSYLVANIA SERIES. Pennsylvania's economy has
historically depended on manufacturing and mining, with the steel and coal
industries being of national importance. However, due in part to the decline in
the steel and coal industries, Pennsylvania's economy has become more
diversified, with major new sources of growth in the service sector, including
trade, medical and health services, education and financial institutions. This
diversification has helped reduce Pennsylvania's unemployment rate to
approximately the same as the national average. The availability,
marketability, and market value of Pennsylvania municipal securities may be
affected by certain Pennsylvania circumstances which, if not resolved, could
adversely affect the various issuers' abilities to meet their financial
obligations. For example, Pennsylvania's continued dependence on manufacturing,
mining, steel and coal has made the state vulnerable to cyclical fluctuations,
foreign imports and environmental concerns. Pennsylvania had a budget surplus
of $218.0 million and $302.2 million for the 1993 and 1994 fiscal years,
respectively, and the 1995 budget forecasts a budget surplus of $4.1 million.
Changes in Pennsylvania's economic conditions or governmental policies could
have a significant effect on the PENNSYLVANIA SERIES' performance.

RISK FACTORS FOR THE VIRGINIA SERIES. Virginia's economy is based
primarily on manufacturing, the government and service sectors, agriculture,
mining and tourism, and unemployment rates are typically below the national
average. The Commonwealth has a long history of fiscal stability, due in large
part to a conservative financial philosophy, broad-based employment
opportunities and diverse sources of revenue. The 1994-96 biennium budget for
the Commonwealth forecasts a slower economic growth in the Commonwealth than in
the nation at large because of the expected significant reductions in the
federal government's defense budget and the high concentration of defense-
dependent industries in Northern Virginia and Tidewater areas of the
Commonwealth. The December 1994 economic forecast by the Virginia Department of
Planning and Budget projects steady but slow job growth in Virginia and real
income growth that will begin to slow as the economy slows. The Constitution of
Virginia requires a balanced budget and limits the ability of the Commonwealth
to create debt. General obligation debt may be incurred to meet certain short-
term needs, to finance capital projects and, under less stringent restrictions,
to finance revenue-producing capital projects. Also, "special fund" revenue
bonds, to which the constitutional debt restrictions do not apply and which are
not supported by the full faith and credit of the Commonwealth, may be issued to
finance qualifying Commonwealth revenue projects. General obligations of
cities, towns and counties are payable from the general revenues of the entity,
including ad valorem tax revenues on property within the jurisdiction. Revenue
obligations issued by other entities are payable only from revenues from the
particular project or projects involved. Securities held in the VIRGINIA SERIES
that are not general obligations of the Commonwealth may be subject to economic
risks or uncertainties peculiar to the issuers of such securities or the sources
from which they are to be paid.

<PAGE>

ALTERNATIVE PURCHASE PLANS

<PAGE>

HOW TO BUY SHARES

<PAGE>

account number on the face of the check. There is no minimum on additional
purchases of Series shares.

SYSTEMATIC INVESTING

<PAGE>

Money Market Funds. See "How to Redeem Shares." To arrange for Systematic
Withdrawal Plan investments, call Shareholder Services at 1-800-423-4026.

CLASS A SHARES. Class A shares of each Series are sold at the public
offering price, which will vary with the size of the purchase, as shown in the
following table:

SALES CHARGE AS % OF
------------------------ CONCESSION TO
OFFERING NET AMOUNT DEALERS AS % OF
AMOUNT OF INVESTMENT PRICE INVESTED OFFERING PRICE
- -------------------- -------- ----------- ---------------
Less than $25,000. . . . . . . . 6.25% 6.67% 5.13%
$25,000 but under $50,000. . . . 5.75 6.10 4.72
$50,000 but under $100,000 . . . 5.50 5.82 4.51
$100,000 but under $250,000. . . 4.50 4.71 3.69
$250,000 but under $500,000. . . 3.50 3.63 2.87
$500,000 but under $1,000,000. . 2.50 2.56 2.05

WAIVERS OF CLASS A SALES CHARGES. Sales charges on Class A shares do not
apply to: (1) any purchase by an officer, director, trustee or full-time
employee (who has completed the introductory period) of either Fund, the
Underwriter, the Adviser, or their affiliates, by a Representative, or by the
spouse, or by the children and grandchildren under the age of 21 of any such
person; and (2) any purchase by a former officer, director, trustee or full-time
employee of either Fund, the Underwriter, the Adviser, or their affiliates, or
by a former FIC Representative; provided they had acted as such for at least
five years and had retired or otherwise terminated the relationship in good
standing:

<PAGE>

CONTINGENT DEFERRED SALES CHARGE
YEAR SINCE PURCHASE AS A PERCENTAGE OF DOLLARS INVESTED
PAYMENT MADE OR REDEMPTION PROCEEDS
------------------- -----------------------------------

<PAGE>

original cost of $10 per share and not to the increase in net asset value of $2
per share. Therefore, $400 of the $600 redemption proceeds will be charged at a
rate of 4.00% (the applicable rate in the second year after purchase).

HOW TO EXCHANGE SHARES

<PAGE>

by the fund into which you are making the exchange and, thus, that fund's
shareholders are bearing the fee ratably. Before exchanging Series shares for
shares of another fund or plan, you should read the Prospectus of the fund or
plan into which the exchange is to be made. You may obtain Prospectuses and
information with respect to which funds or plans qualify for the exchange
privilege free of charge by calling Shareholder Services at 1-800-423-4026.
Exchange requests may be made in writing or by telephone (for shares held on
deposit only) if telephone privileges were elected on your application.
Exchange requests received in "good order" by the Transfer Agent before the
close of regular trading on the NYSE, generally 4:00 P.M. (New York City time),
will be processed at the net asset value determined as of the close of regular
trading on the NYSE on that day; exchange requests received after that time will
be processed on the following trading day.

EXCHANGES BY TELEPHONE. See "Telephone Transactions" for instructions on
making exchanges by telephone.

HOW TO REDEEM SHARES

<PAGE>

REDEMPTIONS BY TELEPHONE. See "Telephone Transactions" for instructions on
making redemptions by telephone.

SYSTEMATIC WITHDRAWAL PLAN. If you own noncertificated Class A shares with
a net asset value of $5,000 or more in a single Series account, you may set up a
plan for redemptions to be made automatically at regular intervals. You may
elect to have the payments (a) sent directly to you or persons you designate; or
(b) automatically invested at net asset value in shares of the same class of any
other Eligible Fund, including the Money Market Funds. See the SAI for more
information on the Systematic Withdrawal Plan. To establish a Systematic
Withdrawal Plan, call Shareholder Services at 1-800-423-4026.

<PAGE>

Class B shares prior to redemption will be added to the period of time you own
Class B shares acquired through reinvestment for purposes of determining (a) the
applicable CDSC upon a subsequent redemption and (b) the date on which Class B
shares automatically convert to class A shares. If your reinvestment is into a
new account, it must meet the minimum investment and other requirements of the
fund into which the reinvestment is being made. To take advantage of this
option, send your reinvestment check along with a written request to the
Transfer Agent within 90 days from the date of your redemption. Include your
account number and a statement that you are taking advantage of the
"Reinvestment Privilege."

REPURCHASE THROUGH UNDERWRITER. You may redeem Class A shares for which a
certificate has been issued through a Dealer. In this event, the Underwriter,
acting as agent for each Series, will offer to repurchase or accept an offer to
sell such shares at a price equal to the net asset value next determined after
the making of such offer. The Dealer may charge you an added commission for
handling any redemption transaction.

Additional information concerning how to redeem shares of the Series is
available upon request to your Representative or Shareholder Services at
1-800-423-4026.

TELEPHONE TRANSACTIONS

<PAGE>

ADDITIONAL INFORMATION. The Series, the Underwriter and their affiliates
will not be liable for any loss, damage, cost or expense arising out of any
instruction (or any interpretation of such instruction) received by telephone
which they reasonably believe to be authentic. In acting upon telephone
instructions, these parties use procedures which are reasonably designed to
ensure that such instructions are genuine. If the Series, the Underwriter or
their affiliates do not follow reasonable procedures, some or all of them may be
liable for any such losses. For more information on telephone transactions see
the SAI. Each Series has the right, at its sole discretion, upon 60 days'
notice, to materially modify or discontinue the telephone exchange and
redemption privilege. During times of drastic economic or market changes,
telephone exchanges or redemptions may be difficult to implement. If you
experience difficulty in making a telephone exchange or redemption, your
exchange or redemption request may be made by regular or express mail, and it
will be implemented at the next determined net asset value, less any applicable
CDSC, following receipt by the Transfer Agent.

MANAGEMENT

BOARD OF DIRECTORS OR TRUSTEES. Each Fund's Board of Directors or
Trustees, as part of its overall management responsibility, oversees various
organizations responsible for the applicable Series' day-to-day management.

ADVISER. First Investors Management Company, Inc. supervises and manages
each Series' investments, determines each Series' portfolio transactions and
supervises all aspects of each Series' operations. The Adviser is a New York
corporation located at 95 Wall Street, New York, NY 10005. The Adviser
presently acts as investment adviser to 14 mutual funds. First Investors
Consolidated Corporation ("FICC") owns all of the voting common stock of the
Adviser and all of the outstanding stock of FIC and the Transfer Agent. Mr.
Glenn O. Head (and members of his family) and Mrs. Julie W. Grayson (as
executrix of the estate of her deceased husband, David D. Grayson) are
controlling persons of FICC and, therefore, jointly control the Adviser.

As compensation for its services, the Adviser receives an annual fee from
each of the Series, which is payable monthly. For the fiscal year ended
December 31, 1994, NEW YORK INSURED paid 0.75% of its average daily net assets
in advisory fees. For the fiscal year ended December 31, 1994, the advisory
fees paid by each Series of MULTI-STATE INSURED, as a percentage of such Series'
average daily net assets, net of waivers, were as follows: ARIZONA SERIES -
0.10%; CALIFORNIA SERIES - 0.50%; CONNECTICUT SERIES - 0.40%; FLORIDA SERIES -
0.18%; MASSACHUSETTS SERIES - 0.50%; MICHIGAN SERIES - 0.50%; MINNESOTA SERIES -
0.25%; NEW JERSEY SERIES - 0.60%; OHIO SERIES - 0.40%; PENNSYLVANIA SERIES -
0.50%; and VIRGINIA SERIES - 0.40%. The advisory fees accrued by the COLORADO
SERIES, GEORGIA SERIES, MARYLAND SERIES, MISSOURI SERIES, NORTH CAROLINA SERIES
and OREGON SERIES were voluntary waived by the Adviser in their entirety.

<PAGE>

BROKERAGE. Each Series may allocate brokerage commissions, if any, to
broker-dealers in consideration of Series share distribution, but only when
execution and price are comparable to that offered by other broker-dealers.
Brokerage may be directed to brokers who provide research. See the SAI for more
information on allocation of portfolio brokerage.

REGULATORY MATTERS. In June 1992, the Funds' underwriter FIC, entered into
a settlement with the Securities and Exchange Commission ("SEC") to resolve
allegations by the agency that certain of FIC's sales representatives had made
misrepresentations concerning the risks of investing in two high yield bond
funds, the First Investors Fund For Income, Inc. and the First Investors High
Yield Fund, Inc. ("High Yield Funds"), and had sold these Funds to investors for
whom they were not suitable. Without admitting or denying the SEC's
allegations, FIC: (a) consented to the entry of a final judgment enjoining it
from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule
10b-5 thereunder and Section 17(a) of the 1933 Act; (b) agreed to the entry of
an administrative order censuring it and requiring it to comply with
undertakings to improve its policies and procedures with regard to sales,
training, supervision and compliance; and (c) agreed to pay $24.7 million to
certain investors who purchased shares of the High Yield Funds from in or about
November 1984 to in or about November 1990.

FIC, FIMCO and/or certain affiliated entities and persons have entered into
settlements with regulators in 29 states to resolve allegations, similar to
those made by the SEC, concerning sales of the High Yield Funds. In October
1993, as part of settlements with Maine, Massachusetts, New York, Virginia and
Washington ("State Settlements"), FIC, FIMCO and certain affiliated entities
and persons agreed, without admitting or denying any of the allegations, (a) to
be enjoined from violating certain provisions of the state securities laws, (b)
to engage in remedial measures designed to ensure that proper sales practices
are observed in the future, and (c) to pay $7.5 million, in addition to the
$24.7 million previously paid by FIC in connection with the SEC settlement, to
investors in the High Yield Funds. In addition, as part of those settlements,
several FIC executives, including Glenn O. Head, who is an officer and Director
or Trustee of the Funds, agreed to be suspended and enjoined temporarily from
associating with any broker-dealer in a supervisory

<PAGE>

capacity in certain of the states. On December 8, 1993, several present and
former FIC executives, including Mr. Head, also agreed, without admitting or
denying the allegations, to temporary SEC suspensions from associating with
broker-dealers and in some cases other regulated entities in a supervisory
capacity.

DISTRIBUTION PLANS

Pursuant to each Class A Plan, the applicable Fund's Board of Directors or
Trustees, in its sole discretion, may periodically allocate the portion of
distribution fees and services fees that each Series may spend, provided the
aggregate of such fees paid by that Series may not exceed an annual rate of
0.30% of the Series' average daily net assets attributable to Class A shares in
any one fiscal year. Of that amount, no more than 0.25% of a Series' average
daily net assets attributable to Class A shares may be paid as service fees.
Payments made to the Underwriter under each Class A Plan may only be made for
reimbursement of specific expenses incurred in connection with distribution and
service activities.

Pursuant to each Class B Plan, each Series is authorized to pay the
Underwriter a distribution fee at the annual rate of 0.75% of that Series'
average daily net assets attributable to Class B shares and a service fee of
0.25% of the Series' average daily net assets attributable to Class B shares.
Payments made to the Underwriter under each Class B Plan will represent
compensation for distribution and service activities, not reimbursement for
specific expenses incurred.

Each Series may suspend or modify payments under the Plans at any time, and
payments are subject to the continuation of each Plan, the terms of any dealer
agreements between Dealers and the Underwriter and any applicable limits imposed
by the National Association of Securities Dealers, Inc. Each Series will not
carry over any fees under the Plans to the next fiscal year. See "Distribution
Plans" in the SAI for a full discussion of the various Plans.

<PAGE>

DETERMINATION OF NET ASSET VALUE

The net asset value of each Series' shares fluctuates and is determined
separately for each class of shares. The per share net asset value of the Class
B shares will generally be lower than that of the Class A shares because of the
higher expenses borne by the Class B shares. The net asset value of shares of a
given class of each Series is determined as of the close of regular trading on
the NYSE (generally 4:00 P.M., New York City time) on each day the NYSE is open
for trading, and at such other times as the applicable Fund's Board of Directors
or Trustees deems necessary, by dividing the market value of the securities held
by such Series, plus any cash and other assets, less all liabilities
attributable to that class, by the number of shares of the applicable class
outstanding. If there is no available market value, securities will be valued
at their fair value as determined in good faith pursuant to procedures adopted
by the applicable Fund's Board of Directors or Trustees. The NYSE currently
observes the following holidays: New Year's Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.

DIVIDENDS AND OTHER DISTRIBUTIONS

<PAGE>

TAXES

<PAGE>

Your redemption of Series shares will result in a taxable gain or loss to
you, depending on whether the redemption proceeds are more or less than your
adjusted basis for the redeemed shares (which normally includes any initial
sales charge paid on Class A shares). An exchange of Series shares for shares
of any other Eligible Fund generally will have similar tax consequences.
However, special tax rules apply when a shareholder (1) disposes of Class A
shares through a redemption or exchange within 90 days of purchase and (2)
subsequently acquires Class A shares of an Eligible Fund without paying a sales
charge due to the 90-day reinvestment privilege or exchange privilege. In these
cases, any gain on the disposition of the original Class A shares will be
increased, or loss decreased, by the amount of the sales charge paid when the
shares were acquired, and that amount will increase the basis of the Eligible
Fund's shares subsequently acquired. In addition, if you purchase Series shares
within 30 days before or after redeeming other shares of that Series (regardless
of class) at a loss, all or a portion of the loss will not be deductible and
will increase the basis of the newly purchased shares.

No gain or loss will be recognized to a shareholder as a result of a
conversion of Class B shares into Class A shares.

STATE INCOME TAXES.

CONNECTICUT. In the opinion of Kelley Drye & Warren, Connecticut tax
counsel to MULTI-STATE INSURED, shareholders who are Connecticut resident
individuals will not be subject to the Connecticut personal income tax on
distributions from the CONNECTICUT SERIES to the extent that these distributions
qualify as (i) exempt-interest dividends, as defined in section 852(b)(5) of the
Code, that are attributable to interest on either (a) obligations issued by or
on behalf of the State of Connecticut, any political subdivision thereof, or any
public instrumentality, state or local authority, district or similar public
entity created under the laws of the State of Connecticut or (b) obligations,
the income with respect to which taxation by any state is prohibited by federal
law, or (ii) "exempt dividends" for Connecticut tax purposes. Distributions to
Connecticut shareholders of the CONNECTICUT SERIES that are attributable to
sources other than those described above will generally be includable in the
Connecticut income of such shareholders.

Corporate shareholders of the CONNECTICUT SERIES subject to tax in
Connecticut will be required to include in net income, for purposes of
calculating the Connecticut corporation business tax, distributions made by the
CONNECTICUT SERIES and gains resulting from the redemption or sale of shares of
the CONNECTICUT SERIES. Such corporate shareholders, in determining net income,
will be entitled to deduct (i) the portion, if any, of such distributions that
are exempt interest dividends

<PAGE>

attributable to state or local bonds issued prior to January 1, 1992 and (ii)
70% of the amount of includable distributions that qualify as dividends under
Section 316 of the Code will be deductible.

Except when acceptable investments are unavailable to the CONNECTICUT
SERIES, it will maintain at least 80% of the value of its assets in debt
obligations which are exempt from federal income tax and the Connecticut
personal income tax.

FLORIDA. In the opinion of Rudnick & Wolfe, Florida tax counsel to MULTI-
STATE INSURED, under existing law, shareholders of the Florida Series will not
be subject to the Florida intangible personal property tax on their ownership of
FLORIDA SERIES shares or on distributions of income or gains made by the FLORIDA
SERIES to the extent that such distributions are attributable solely to
obligations issued by the United States government and its agencies, or by the
Commonwealths of Puerto Rico, Guam the Virgin Islands, American Samoa, or the
Northern Mariana Islands (collectively, "EXEMPT INSTRUMENTS") or to money,
notes, bonds, and other obligations issued by the State of Florida and its
municipalities, counties, and other taxing districts. If the FLORIDA SERIES is
not invested solely in Exempt Instruments and money, notes, bonds, and other
obligations issued by the State of Florida and its municipalities, counties, and
other taxing districts as of the last business day of each calendar year, then
the Florida intangible personal property tax ("INTANGIBLE TAX") will apply as
follows:

(a) The portion of the net asset value of the Florida Series'
portfolio that is attributable to Exempt Instruments will be exempt from
the Intangible Tax.

(b) If the remaining portion of the net asset value of the Florida
Series' portfolio, after removing the portion representing Exempt
Instruments, represents assets which are themselves exempt from the
Intangible Tax, then this portion will also be exempt from the Intangible
Tax.

(c) If the remaining portion of the net asset value of the Florida
Series' portfolio, after removing the portion representing Exempt
Instruments, represents any asset which is subject to the Intangible Tax
under Florida law, then the remaining portion of the net asset value of the
Florida Series portfolio will be subject to the Intangible Tax.

Shareholders of the Florida Series will be exempt from the Intangible Tax
on their shares to the extent that the net asset value of the Florida Series'
portfolio is exempt. (The FLORIDA SERIES has no present intention of investing
in assets which will be subject to the Intangible Tax.)

Because Florida does not impose an income tax on individuals, individual
shareholders will not be subject to any Florida income tax on income or gains
distributed by the FLORIDA SERIES or on gains resulting from the redemption or
exchange of shares of the FLORIDA SERIES. Corporate shareholders will be
subject to the Florida income tax on all distributions received from the FLORIDA
SERIES, regardless of the tax-exempt status of interest received from the
FLORIDA SERIES which is attributable to bonds under section 103(a) of the Code
or any other Federal law; however, if a corporation does not have its commercial
domicile within the State of Florida, its non-business income generated from the
FLORIDA SERIES is not allocated as Florida income subject to Florida corporate
income tax. Non-business income includes capital gains and interest to the
extent they do not arise from transactions and activities in the regular course
of a taxpayer's business.

<PAGE>

For Florida state income tax purposes, the FLORIDA SERIES itself will not
be subject to the Florida income tax so long as it has no income subject to
Federal taxation.

Shareholders of the FLORIDA SERIES will be subject to Florida estate tax on
their FLORIDA SERIES shares only if they are Florida residents, certain natural
persons not domiciled in Florida, or certain natural persons not residents of
the United States. However, the Florida estate tax is limited to the amount of
the credit allowable under the Code (currently section 2011 and in some cases
section 2102 of the Code for death taxes actually paid to the several states).

Neither interests held by shareholders of the FLORIDA SERIES nor Exempt
Instruments nor money, notes, bonds, and other obligations issued by the State
of Florida and its municipalities, counties, and other taxing districts held by
the FLORIDA SERIES will be subject to the Florida ad valorem property tax, the
Florida sales and use tax or the Florida documentary stamp tax.

GEORGIA. In the opinion of Kutak Rock, Georgia tax counsel to MULTI-STATE
INSURED, shareholders of the GEORGIA SERIES that are individuals, estates or
trusts subject to the Georgia personal income tax will not be required to
include in the gross income for Georgia income tax purposes, distributions made
by the GEORGIA SERIES that are derived from interest on obligations issued by
the State of Georgia or any political subdivision thereof which obligations are
exempt from Federal taxation under section 103(a) of the Code. Similarly,
individuals, estates and trusts may exclude from the calculation of Georgia
income tax, dividend distributions from the GEORGIA SERIES to the extent
attributable to interest on obligations of the United States, its territories or
possessions or any authority, commission or instrumentality of the United States
exempt from state income tax under Federal law. To the extent that
distributions of the GEORGIA SERIES are attributable to short or long-term
capital gains, such distributions will not be treated as tax-exempt for Georgia
personal income tax purposes.

In general, corporations may exclude dividend distributions which are
attributable to interest exempt from Federal income tax under section 103(a)
from the calculation of Georgia income tax to the extent derived from
obligations issued by the State of Georgia or any political subdivision thereof.
Further, corporations may exclude from the calculation of Georgia income tax,
dividend distributions from the GEORGIA SERIES to the extent attributable to
interest on obligations of the United States or its possessions. Corporations
will not be entitled to exclude from income any dividend distributions from the
GEORGIA SERIES which are attributable to interest exempt from Federal income tax
under section 103(a) and attributable to obligations issued by any other state
or political subdivision thereof.

Capital gains recognized as a result of the sale of shares in the GEORGIA
SERIES can not be excluded for purposes of calculating the Georgia income tax by
individuals, estates, trusts or corporations.

Although the application of the Georgia intangible personal property tax to
the ownership of shares in the GEORGIA SERIES is not clear, special tax counsel
believes that the shares in the GEORGIA SERIES will be deemed to be taxable
intangible property separate from an ownership interest in the underlying tax-
exempt Georgia obligations. Special tax counsel urges each potential investor
in the GEORGIA SERIES to consult his or her own tax advisor regarding the
application of the Georgia intangible personal property tax. Because obligations
or evidences of debt of Georgia, its political subdivisions and public
institutions are exempt from the Georgia intangible personal

<PAGE>

property tax, special tax counsel believes that the GEORGIA SERIES will not
be subject to such tax as a result of holding such obligations
or evidences of debt.

MARYLAND. In the opinion of Venable, Baetjer and Howard, LLP, Maryland tax
counsel to MULTI-STATE INSURED, holders of the MARYLAND SERIES who are
individuals, corporations, estates or trusts and who are subject to Maryland
state and local income tax will not be subject to tax in Maryland on MARYLAND
SERIES dividends to the extent that such dividends qualify as exempt-interest
dividends of a RIC under section 852(b)(5) of the Code and which are
attributable to (1) interest on tax-exempt obligations of the State of Maryland
or its political subdivisions or authorities, (2) interest on obligations of the
United States or an authority, commission, instrumentality, possession or
territory of the United States, or (3) gain realized by the MARYLAND SERIES from
the sale or exchange of bonds issued by Maryland or a political subdivision of
Maryland or of the United States or an authority, commission or instrumentality
of the United States.

To the extent that distributions of the MARYLAND SERIES are attributable to
sources other than those described above, such as (1) interest on obligations
issued by states other than Maryland or (2) income from repurchase contracts,
such distributions will not be exempt from Maryland state and local income
taxes. In addition, gain realized by a shareholder upon a redemption or
exchange of MARYLAND SERIES shares will be subject to Maryland taxation.

In the event the MARYLAND SERIES fails to qualify as a regulated investment
company, the MARYLAND SERIES would be subject to corporate Maryland income tax
and distributions would be taxable as ordinary income to the shareholders.

Maryland presently includes in taxable net income items of tax preferences
as defined in the Code. Interest paid on certain private activity bonds
constitutes a tax preference. Accordingly, subject to a threshold amount, 50%
of any distributions on the MARYLAND SERIES attributable to such private
activity bonds will not be exempt from Maryland state and local income taxes.

Interest on indebtedness incurred (directly or indirectly) by a shareholder
of the MARYLAND SERIES to purchase or carry shares of the MARYLAND SERIES will
not be deductible for Maryland state and local income tax purposes to the extent
such interest is allocable to exempt-interest dividends.

MASSACHUSETTS. In the opinion of Palmer & Dodge, Massachusetts tax counsel
to MULTI-STATE INSURED, holders of shares of the MASSACHUSETTS SERIES who are
subject to Massachusetts personal income tax will not be subject to tax on
distributions from the MASSACHUSETTS SERIES for periods during which the
MASSACHUSETTS SERIES qualifies as a regulated investment company under
section 851 of the Code, to the extent that these distributions (1) qualify as
exempt interest dividends of a regulated investment company within the meaning
of Code section 852(b)(5) which are directly attributable to interest exempt
from Massachusetts taxation under any provision of law, on obligations issued by
the Commonwealth of Massachusetts, its instrumentalities or its political
subdivisions, by the government of Puerto Rico or by its authority, by the
government of Guam or by its authority, or by the government of the Virgin
Island or by its authority; (2) are attributable to interest on obligations of
the United States exempt from state income taxation; or (3) qualify as capital
gain dividends within the meaning of Code section 852(b)(3)(C) which are
attributable to gain exempt from Massachusetts taxation under any provision of
law, on obligations issued by the Commonwealth of Massachusetts, its
instrumentalities or political subdivisions. The MASSACHUSETTS SERIES must
identify the items not subject to tax in a written notice to the shareholders.
Holders

<PAGE>

of shares of the MASSACHUSETTS SERIES who are subject to Massachusetts personal
income tax will generally be subject to tax on distributions which are from
sources other than those described above.

If a holder of shares of the MASSACHUSETTS SERIES is a corporation subject
to the Massachusetts corporate excise tax, distributions received from the
MASSACHUSETTS SERIES are includable in gross income and generally may not be
deducted by such a corporate holder in computing its net income.

The holders of shares of the MASSACHUSETTS SERIES will recognize taxable
gain or loss upon an exchange or redemption of their shares. The shares of the
MASSACHUSETTS SERIES will be includable in the gross estate of a deceased
individual holder who is a resident of Massachusetts for purposes of the
Massachusetts Estate Tax.

NEW JERSEY. In the opinion of Hawkins, Delafield & Wood, New Jersey tax
counsel to MULTI-STATE INSURED, shareholders of the NEW JERSEY SERIES who are
New Jersey resident individuals, estates and trusts will not be subject to the
New Jersey Gross Income Tax on distributions of the interest and capital gains
made by the NEW JERSEY SERIES to the extent that such distributions are from
municipal bonds, private activity bonds, municipal notes and municipal
commercial paper issued by the State of New Jersey, or its counties,
municipalities, authorities, or other political subdivisions and within the
scope of those obligations described in N.J.S.A. 54A:6-14. In addition, such
shareholders will not be subject to the New Jersey Gross Income Tax on gains
resulting from the redemption or sale of shares of the NEW JERSEY SERIES. The
foregoing will apply, however, only if in the year in which the distribution is
paid, the NEW JERSEY SERIES qualifies as a RIC under the Code and the
investments of the NEW JERSEY SERIES are limited to interest-bearing
obligations, obligations issued at a discount, and cash and cash items,
including receivables, and not less than 80% of the aggregate principal amount
of its investments, excluding cash and cash items (including receivables), are
comprised of obligations described in N.J.S.A. 54A:6-14.

A corporate shareholder of the NEW JERSEY SERIES subject to tax in New
Jersey will be required to include in its corporate tax base, distributions of
interest and capital gains made by the NEW JERSEY SERIES for purposes of
calculating its New Jersey Corporate Business Tax or its New Jersey Corporate
Income Tax. In addition, such corporate shareholder will be required to include
in its corporate tax base, gains resulting from the redemption or sale of shares
of the NEW JERSEY SERIES for purposes of calculating its New Jersey Business Tax
or its New Jersey Corporate Income Tax.

Except when acceptable investments are unavailable to the NEW JERSEY
SERIES, it will maintain at least 80% of the value of its assets in debt
obligations which are exempt from Federal income tax and New Jersey Gross Income
Tax.

NEW YORK. In the opinion of Hawkins, Delafield & Wood, tax counsel to NEW
YORK INSURED, shareholders who are New York resident individuals will not be
subject to the personal income taxes imposed by New York State and by New York
City on distributions from NEW YORK INSURED to the extent that these
distributions qualify as exempt-interest dividends, as defined in section
852(b)(5) of the Code, and are attributable to interest on obligations issued by
or on behalf of the State of New York or any political subdivision thereof.
Distributions to New York resident individual shareholders of NEW YORK INSURED
that are attributable to other sources will generally be includable in the New
York personal income of such shareholders.

<PAGE>

Interest on indebtedness incurred or continued to purchase or carry shares
of NEW YORK INSURED will not be deductible for New York personal income tax
purposes to the extent such interest is allocable to exempt-interest dividends
paid by that Fund.

NEW YORK INSURED distributions are not excluded from the determination of
the franchise and corporation taxes that are based on entire net income and
respectively imposed by the State and City of New York.

NORTH CAROLINA. In the opinion of Wyrick, Robbins, Yates & Ponton L.L.P,
North Carolina tax counsel to MULTI-STATE INSURED, and based on the current
administrative position of the North Carolina Department of Revenue (the
"Revenue Department"), shareholders of the NORTH CAROLINA SERIES who are
otherwise subject to the North Carolina individual or corporate income tax will
not be subject to either such tax on NORTH CAROLINA SERIES distributions to the
extent that such distributions qualify as exempt-interest dividends under the
Code and represent (a) interest on direct obligations of the United States or
its possessions, obligations of the State of North Carolina or its political
subdivisions or obligations of nonprofit educational institutions organized or
chartered under the laws of the State of North Carolina, or (b) interest upon
obligations, and gain from the disposition of obligations, if the North Carolina
law under which the obligations were issued specifically exempts from such taxes
the interest or gain (collectively, "North Carolina Exempt Obligations").
However, the non-taxability of dividends paid by the NORTH CAROLINA SERIES to a
shareholder is conditioned upon the NORTH CAROLINA SERIES providing a supporting
statement to the shareholder which must specify the amount received by the
shareholder which represents distributions on North Carolina Exempt Obligations.
In the absence of a supporting statement, the total amount designated by the
NORTH CAROLINA SERIES as exempt from tax is subject to North Carolina income
tax. The NORTH CAROLINA SERIES will provide to the shareholders a supporting
statement which meets the Revenue Department's requirements.

Interest on certain other obligations may also be considered interest from
obligations of the United States and thus exempt from North Carolina income tax.
However, interest earned on obligations that are merely backed or guaranteed by
the U.S. Government (and thus are not considered "direct" obligations of the
United States) is subject to North Carolina income tax. For instance, interest
income realized on obligations of the Federal National Mortgage Association and
interest paid by the issuer of mortgage-backed certificates guaranteed by the
Federal government, Federal agencies or corporations formed by the Federal
government is not considered income from obligations of the United States and is
subject to North Carolina income tax. Also subject to North Carolina income tax
is interest paid in connection with repurchase agreements issued by banks and
savings and loan associations.

Distributions by the NORTH CAROLINA SERIES of interest on Federal
obligations will not be treated as dividends for purposes of the six percent
dividend tax credit which might otherwise be available to individual
shareholders because such interest is treated as flowing through to the
shareholders.

In general, a shareholder of the NORTH CAROLINA SERIES who is subject to
North Carolina income tax will recognize capital gains for North Carolina income
tax purposes to the same extent as a shareholder would for Federal income tax
purposes when the NORTH CAROLINA SERIES makes a capital gain distribution or a
shareholder redeems or sells shares. In certain instances, however, North
Carolina legislation creating an entity issuing debt obligations expressly
exempts gain on the

<PAGE>

sale of such obligations from North Carolina income taxation. In a letter to
tax counsel, the Revenue Department stated its administrative position that
NORTH CAROLINA SERIES capital gain distributions which are attributable to such
obligations will not be subject to North Carolina income taxation.

The North Carolina intangible personal property tax is a local property tax
on the total fair market value of all shares of stock, including shares of
mutual funds, owned by North Carolina residents having a business, commercial or
taxable situs in North Carolina on December 31 of each year. However, the share
value of a mutual fund, such as the NORTH CAROLINA SERIES, may be reduced by a
percentage equal to the ratio of "direct obligations" of the U.S. Government
(excluding obligations that are merely backed or guaranteed by the U.S.
Government) and "direct obligations" of the State of North Carolina and its
political subdivisions to the total investments held in the mutual fund as of
December 31. Upon request, a taxpayer must be able to provide information to
support any percentage reduction in the share value of a mutual fund. The NORTH
CAROLINA SERIES will provide a statement to shareholders setting forth
information to support any percentage reduction in share value as of December 31
of each year.

Indebtedness owed to a broker, bank or other party incurred to purchase
shares of the NORTH CAROLINA SERIES as listed on the intangible tax return may
be deducted from the taxable value (net of any reduction in share value
calculated in accordance with the foregoing) of shares owned, subject to the
following requirements and limitations: the indebtedness must be incurred
directly to purchase the shares of the NORTH CAROLINA SERIES; the shares
purchased with proceeds of the indebtedness must be pledged as collateral; the
amount of indebtedness allowable is limited to the same percentage that the
taxable value of the shares of the NORTH CAROLINA SERIES purchased with the
borrowed money relates to the total value of such shares; the amount of
allowable indebtedness may not exceed the taxable value of the shares of the
NORTH CAROLINA SERIES purchased with proceeds of the indebtedness; and
information supporting a claim of allowable indebtedness must be furnished upon
request.

In June 1993, the North Carolina Court of Appeals in FULTON CORPORATION V.
JUSTUS ruled that certain portions of the intangible personal property tax
scheme violate the commerce clause of the U.S. constitution and are therefore
unconstitutional. The case is currently pending before the North Carolina
Supreme Court and a decision is expected this term. It is unclear at this time
whether, or to what extent, the decision will affect shareholders of the NORTH
CAROLINA SERIES.

PENNSYLVANIA. Individual shareholders of the PENNSYLVANIA SERIES who are
otherwise subject to the Pennsylvania personal income tax will not be subject to
that tax on distributions of interest by the PENNSYLVANIA SERIES that are
attributable to obligations issued by Pennsylvania, public authorities,
commissions, boards or agencies created by Pennsylvania, political subdivisions
of Pennsylvania or public authorities created by any such political subdivision
or obligations of the United States and certain qualifying agencies,
instrumentalities, territories and possessions of the United States ("Exempt
Obligations"). Distributions of gains on Exempt Obligations will be subject to
Pennsylvania personal income taxes in the hands of shareholders who are
otherwise subject to the Pennsylvania personal income tax. Distributions
attributable to most other sources will not be exempt from Pennsylvania personal
income tax.

Shares of the PENNSYLVANIA SERIES that are held by individual shareholders
who are Pennsylvania residents will be exempt from the Pennsylvania county
personal property tax to the

<PAGE>

extent that the PENNSYLVANIA SERIES' portfolio consists of Exempt Obligations on
the annual assessment date. Non-residents of the Commonwealth of Pennsylvania
are not subject to this tax. Individual shareholders who are residents of
Allegheny County, the City of Pittsburgh or the School District of Pittsburgh,
have no obligation to pay a personal property tax. Corporations are not subject
to Pennsylvania personal property taxes. For shareholders who are residents of
the City of Philadelphia, distributions of interest derived from Exempt
Obligations are not taxable for purposes of the Philadelphia School District
investment net income tax provided that the PENNSYLVANIA SERIES reports to its
investors the percentage of Exempt Obligations held by it for the year. The
PENNSYLVANIA SERIES will report such percentage to its shareholders.

The Pennsylvania Department of Revenue takes the position that a RIC is a
separate entity under Pennsylvania corporate net income tax law and, therefore,
the characteristics of income received by such company, to the extent that such
income would otherwise be includable in Pennsylvania corporate taxable income,
will not flow through to a corporate shareholder. However, because the
Pennsylvania corporate net income tax is based upon Federal taxable income,
items excluded from Federal taxable income and not required to be added to
taxable income by Pennsylvania law will also be excluded from Pennsylvania
corporate taxable income. Accordingly, "exempt-interest dividends," which are
not required to be so added, are also excluded from the Pennsylvania corporate
taxable income. Gains on Exempt Obligations are, however, subject to the
corporate net income tax in the hands of a corporate shareholder. The
Pennsylvania Department of Revenue also takes the position that shares of funds
similar to the PENNSYLVANIA SERIES are not considered exempt assets of a
corporation for the purpose of determining its capital stock value subject to
the Pennsylvania capital stock and franchise taxes.

Except when acceptable investments are unavailable to the PENNSYLVANIA
SERIES, at least 80% of the value of its net assets will be maintained in debt
obligations of the Commonwealth of Pennsylvania, its localities and political
subdivisions, which are exempt from regular Federal income tax and Pennsylvania
personal income tax and personal property taxes.

VIRGINIA. In the opinion of Sands, Anderson, Marks & Miller, Virginia tax
counsel to MULTI-STATE INSURED, interest on exempt obligations in the VIRGINIA
SERIES passed through to shareholders in qualifying distributions will retain
its exempt status in the hands of the shareholders. Accordingly, individual
shareholders of the VIRGINIA SERIES subject to Virginia personal income tax will
not be required to include in their gross income, for Virginia personal income
tax purposes, distributions made by the VIRGINIA SERIES that are exclusively (1)
both tax-exempt for Federal income tax purposes and derived from interest on
obligations of the Commonwealth of Virginia or any of its political
subdivisions, or (2) without regard to any exemption from Federal income tax,
derived from interest in certain obligations for which a Virginia income tax
exemption is independently provided, including, among others, obligations issued
under the Virginia Public Finance Act, certain revenue bonds for transportation
facilities, and obligations issued by the Virginia Housing Development
Authority, the Virginia Education Loan Authority, and industrial development
authorities created pursuant to the Virginia Industrial Development and Revenue
Bond Act.

If a distribution includes both taxable and tax-exempt interest, the entire
distribution is included in the gross income of the shareholder for Virginia
personal income tax purposes unless the exempt portion is designated with
reasonable certainty. Counsel has been advised that, in the event any such
commingled distributions are made by the VIRGINIA SERIES, the VIRGINIA SERIES
intends

<PAGE>

to provide such designation, in a manner acceptable to the Virginia Department
of Taxation, to shareholders of the VIRGINIA SERIES.

In general, an individual shareholder of the VIRGINIA SERIES who is a
Virginia resident will recognize capital gains for Virginia income tax purposes
to the same extent that he or she would for Federal income tax purposes when the
VIRGINIA SERIES makes a capital gains distribution or the shareholder redeems or
sells shares. In certain instances, however, legislation creating the entity
issuing debt obligations expressly exempts profit on the sale of the obligation
from Virginia income taxation.

Interest on indebtedness incurred (directly or indirectly) by shareholders
to purchase or carry shares of the VIRGINIA SERIES will not be deductible for
Virginia income tax purposes.

PERFORMANCE INFORMATION

<PAGE>

Each of the above performance calculations may be based on investment at
reduced sales charge levels or at net asset value. Any quotation of performance
figures not reflecting the maximum sales charge or CDSC will be greater than if
the maximum sales charge or CDSC were used. Additional performance information
is contained in the Series' Annual Reports which may be obtained without charge
by contacting the applicable Fund at 1-800-423-4026.

GENERAL INFORMATION

ORGANIZATION. NEW YORK INSURED was incorporated in the State of Maryland
on July 5, 1983. NEW YORK INSURED's authorized capital stock consists of one
billion shares of common stock, with a par value of $.01 per share. MULTI-STATE
INSURED was organized as a Massachusetts business trust on October 30, 1985. In
addition, to the nine Series of MULTI-STATE INSURED described in this
Prospectus, the following are also separate Series of that Fund:

FIRST INVESTORS ARIZONA INSURED TAX FREE SERIES
FIRST INVESTORS CALIFORNIA INSURED TAX FREE SERIES
FIRST INVESTORS COLORADO INSURED TAX FREE SERIES
FIRST INVESTORS MICHIGAN INSURED TAX FREE SERIES
FIRST INVESTORS MINNESOTA INSURED TAX FREE SERIES
FIRST INVESTORS MISSOURI INSURED TAX FREE SERIES
FIRST INVESTORS OHIO INSURED TAX FREE SERIES
FIRST INVESTORS OREGON INSURED TAX FREE SERIES

Each Fund is authorized to issue shares of beneficial interest or common
stock, as applicable, in such separate and distinct series and classes of shares
as that Fund's Board of Directors or Trustees shall from time to time establish.
The shares of beneficial interest of MULTI-STATE INSURED are presently divided
into seventeen separate and distinct Series and the shares of common stock of
NEW YORK INSURED presently comprise one series. Each Series presently has two
classes, designed Class A shares and Class B shares. Each class of a Series
represents interests in the same assets of that Series. The classes differ in
that (1) each class has exclusive voting rights on matters affecting only that
class, (2) Class A shares are subject to an initial sales charge and relatively
lower ongoing distribution fees, (3) Class B shares bear higher ongoing
distribution fees, are subject to a CDSC upon certain redemptions and will
automatically convert to Class A shares approximately eight years after
purchase, (4) each class may bear differing amounts of certain other class-
specific expenses, and (5) each class has different exchange privileges. Each
Fund's Board of Directors or Trustees does not anticipate that there will be any
conflicts among the interests of the holders of the different classes of each
Series' shares. On an ongoing basis, each Fund's Board of Directors or Trustees
will consider whether any such conflict exists and, if so, take appropriate
action. The Funds do not hold annual shareholder meetings. If requested to do
so by the holders of at least 10% of a Fund's outstanding shares, that Fund's
Board of Directors or Trustees will call a special meeting of shareholders for
any purpose, including the removal of Directors or Trustees. Each share of each
Series has equal voting rights except as noted above. Each share of a Series is
entitled to participate equally in dividends and other distributions and the
proceeds of any liquidation except that, due to the higher expenses borne by the
Class B shares, such dividends and proceeds are likely to be lower for the Class
B shares than for the Class A shares.

CUSTODIAN. The Bank of New York, 48 Wall Street, New York, NY 10286, is
custodian of the securities and cash of each Series.

<PAGE>

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES. Marjorie A. Engelhart
and Donna Schultz, 14 Revere Ct., Suffern, NY 10901 own 31.2% of the Class B
shares of NEW YORK INSURED and may, therefore, be deemed to control this class
of that Fund under the 1940 Act. Lucille P. Gee, 115 Vernon St., Manchester, CT
06040 owns 60.7% of the Class B shares of the CONNECTICUT SERIES and may,
therefore, be deemeed to control this class of that Series under the 1940 Act.
Raymond J. Beyer, 2769 S. Oakland Forest Dr., Ft. Lauderdale, FL 33309 owns
55.0% of the Class B shares of the FLORIDA SERIES and may, therefore, be deemed
to control this class of that Series under the 1940 Act. Geraldyne P. Miller,
3357 Collier Ct. N.W., Atlanta, GA 30331 owns 99.4% of the Class B shares of the
GEORGIA SERIES and may, therefore, be deemed to control this class of that
Series under the 1940 Act. Roxanne Willims, 6210 Leeke Forest Ct., Bethesda, MD
20817 and Saguna K, Jain, 3417 Inverwood Lane, Mitchelville, MD 20721 own 32.7%
and 49.7%, respectively, of the Class B shares of the MARYLAND SERIES and may,
therefore, each be deemed to control this class of that Series under the 1940
Act. Paul A. D'Oliveira, 2540 Pawtucket Ave., East Providence, RI 02915 owns
81.6% of the Class B shares of the MASSACHUSETTS SERIES and may, therefore, be
deemed to control this class of that Series under the 1940 Act. Mae J.
Andreini, 1170 Cumbermeade Rd., Fort Lee, NJ 07024 and Nancy M. Pasternak and
Robert M.J. Pasternak, 504 Grove Ave., Edison, NJ 08820 own 36.0% and 47.8%,
respectively, of the Class B shares of the NEW JERSEY SERIES and may,
therefore, each be deemed to control this class of that Series under the 1940
Act. Frances Freeman Bracy, P.O.Box 292, 106 Edgewood Dr., Ahoskie, NC 27910
and James C. Rutledge, as Custodian, 1615 Eastwood Drive, Kannapollis, NC 28083
own 49.6% and 40.0%, respectively, of the Class B shares of the NORTH CAROLINA
SERIES and may, therefore, each be deemed to control this class of that Series
under the 1940 Act. Mary M. Kelly and Judith A. Norcutt, Box 108, Lawrence, PA
15055 and Margaret M. Malley, 21 W. Springfield Ave., Philadelphia, PA 19118 own
45.6% and 53.6%, respectively, of the Class B shares of the PENNSYLVANIA SERIES
and may, therefore, each be deemed to control this class of that Series under
the 1940 Act. A. Harry Wagner, as Trustee, 4901 New Kent Rd., Richmond, VA
23225 owns 49.8% of the Class B shares of the VIRGINIA SERIES and may,
therefore, be deemed to control this class of that Series under the 1940 Act.

SHAREHOLDER INQUIRIES. Shareholder inquiries can be made by calling
Shareholder Services at 1-800-423-4026.

<PAGE>

will be mailed if requested in writing or by telephone by any shareholder. Each
Series will ensure that an additional copy of such reports are sent to any
shareholder who subsequently changes his or her mailing address.

<PAGE>

TABLE OF CONTENTS
- ---------------------------------------------------------------------------

Fee Table. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . . 5
Investment Objectives and Policies . . . . . . . . . . . . . . . . . . 10
Alternative Purchase Plans . . . . . . . . . . . . . . . . . . . . . . 20
How to Buy Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . 21
How to Exchange Shares . . . . . . . . . . . . . . . . . . . . . . . . 25
How to Redeem Shares . . . . . . . . . . . . . . . . . . . . . . . . . 26
Telephone Transactions . . . . . . . . . . . . . . . . . . . . . . . . 28
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Distribution Plans . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Determination of Net Asset Value . . . . . . . . . . . . . . . . . . . 32
Dividends and Other Distributions. . . . . . . . . . . . . . . . . . . 32
Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Performance Information. . . . . . . . . . . . . . . . . . . . . . . . 42
General Information. . . . . . . . . . . . . . . . . . . . . . . . . . 43

LEGAL COUNSEL AUDITORS
Kirkpatrick & Lockhart Tait, Weller & Baker
1800 M Street, N.W. Two Penn Center Plaza
Washington, D.C. 20036 Philadelphia, PA 19102-1707

THIS PROSPECTUS IS INTENDED TO CONSTITUTE AN OFFER BY EACH FUND ONLY OF THE
SECURITIES OF WHICH IT IS THE ISSUER AND IS NOT INTENDED TO CONSTITUTE AN OFFER
BY ANY FUND OF THE SECURITIES OF ANY OTHER FUND WHOSE SECURITIES ARE ALSO
OFFERED BY THIS PROSPECTUS. NO FUND INTENDS TO MAKE ANY REPRESENTATION AS TO
THE ACCURACY OR COMPLETENESS OF THE DISCLOSURE IN THIS PROSPECTUS RELATING TO
ANY OTHER FUND. NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED
IN THIS PROSPECTUS OR THE STATEMENT OF ADDITIONAL INFORMATION, AND IF GIVEN OR
MADE, SUCH INFORMATION AND REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY EITHER FUND, FIRST INVESTORS CORPORATION, OR ANY AFFILIATE
THEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY ANY OF THE SHARES OFFERED HEREBY IN ANY STATE TO ANY PERSON
TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH STATE.

<PAGE>

First Investors
New York Insured
Tax Free Fund, Inc.
- ------------------------------------
First Investors
Multi-State
Insured Tax Free Fund
- ------------------------------------
Connecticut Series Massachusetts Series
Florida Series New Jersey Series
Georgia Series North Carolina Series
Maryland Series Pennsylvania Series
Virginia Series

- ------------------------------------

Prospectus
- ------------------------------------

May 1, 1995

First Investors Logo

Logo is described as follows: the arabic numeral one separated into seven
vertical segments followed by the words "First Investors."

Vertical line from top to bottom in center of page about 1/2 inch in thickness.

The following language appears to the left of the above language in the printed
piece:

The words "BULK RATE U.S. POSTAGE PAID PERMIT NO. 7379" in a box to the right of
a circle containing the words "MAILED FROM ZIP CODE 11201" appears on the
righthand side.

The following language appears on the lefthand side:

FIRST INVESTORS MULTI-STATE INSURED TAX FREE FUND
95 WALL STREET
NEW YORK, NY 10005

First Investors Logo (as described above)
A MEMBER OF THE
FIRST INVESTORS
FINANCIAL NETWORK

FITF001

<PAGE>

FIRST INVESTORS NEW YORK INSURED TAX FREE FUND, INC.

FIRST INVESTORS MULTI-STATE INSURED TAX FREE FUND
ARIZONA SERIES, CALIFORNIA SERIES, COLORADO SERIES, CONNECTICUT SERIES,
FLORIDA SERIES, GEORGIA SERIES, MARYLAND SERIES, MASSACHUSETTS SERIES,
MICHIGAN SERIES, MINNESOTA SERIES, MISSOURI SERIES, NEW JERSEY SERIES,
NORTH CAROLINA SERIES, OHIO SERIES, OREGON SERIES, PENNSYLVANIA SERIES,
VIRGINIA SERIES

95 Wall Street 1-800-423-4026
New York, New York 10005

STATEMENT OF ADDITIONAL INFORMATION
DATED MAY 1, 1995

This is a Statement of Additional Information ("SAI") for FIRST INVESTORS
NEW YORK INSURED TAX FREE FUND, INC. and FIRST INVESTORS MULTI-STATE INSURED TAX
FREE FUND (collectively, the "Funds"), each an open-end diversified management
investment company. FIRST INVESTORS NEW YORK INSURED TAX FREE FUND, INC. ("NEW
YORK INSURED") consists of a single investment series and FIRST INVESTORS
MULTI-STATE INSURED TAX FREE FUND ("MULTI-STATE INSURED") consists of seventeen
separate investment series (singularly and collectively, "Series").

NEW YORK INSURED. The investment objective of NEW YORK INSURED is to
provide a high level of interest income which is exempt from Federal income tax,
New York State, New York City personal income taxes and, for non-corporate
shareholders, the Federal alternative minimum tax.

There can be no assurance that any Series will achieve its investment
objective.

This SAI is not a prospectus. It should be read in conjunction with the
Prospectuses of each Fund dated May 1, 1995, which may be obtained free of cost
from the Funds at the address or telephone number noted above.

<PAGE>

TABLE OF CONTENTS Page
----

Investment Policies. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Hedging and Option Income Strategies . . . . . . . . . . . . . . . . . . . 8
Investment Restrictions. . . . . . . . . . . . . . . . . . . . . . . . . . 14
Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
State Specific Risk Factors. . . . . . . . . . . . . . . . . . . . . . . . 21
Directors or Trustees and Officers . . . . . . . . . . . . . . . . . . . . 59
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Underwriter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Distribution Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Determination of Net Asset Value . . . . . . . . . . . . . . . . . . . . . 65
Allocation of Portfolio Brokerage. . . . . . . . . . . . . . . . . . . . . 66
Reduced Sales Charges, Additional Exchange and
Redemption Information and Other Services. . . . . . . . . . . . . . . . 66
Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Performance Information. . . . . . . . . . . . . . . . . . . . . . . . . . 72
General Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Appendix A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Appendix B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Appendix C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
<PAGE>

INVESTMENT POLICIES

BOND MARKET CONCENTRATION. Each Series may invest more than 25% of its
total assets in a particular segment of the municipal bond market, such as
hospital revenue bonds, housing agency bonds, industrial development bonds,
airport bonds and university dormitory bonds, during periods when one or more of
these segments offer higher yields and/or profit potential. As of December 31,
1994, the percentage of assets of each Series concentrated in a particular
segment of the bond market is as follows: NEW YORK INSURED - 31.5% in
transportation bonds; ARIZONA SERIES - 43.2% in general obligation bonds;
COLORADO SERIES - 48.2% in general obligations bonds; CONNECTICUT SERIES - 28.8%
in general obligations bonds; FLORIDA SERIES - 47.4% in utilities bonds; GEORGIA
SERIES - 25.8% in general obligations bonds and 30.5% in utilities bonds;
MASSACHUSETTS SERIES - 37.4% in hospital bonds; MICHIGAN SERIES - 45.5% in
general obligations bonds; MINNESOTA SERIES - 39.8% in general obligation bonds
and 34.7% in hospital bonds; MISSOURI SERIES - 33.9% in hospital bonds; NEW
JERSEY SERIES - 27.9% in hospital bonds; NORTH CAROLINA SERIES - 45.1% in
utilities bonds; OHIO SERIES - 48.9% in general obligation bonds; OREGON SERIES
- - 52.5% in general obligation bonds; PENNSYLVANIA SERIES - 29.3% in utilities
bonds; and VIRGINIA SERIES - 33.3% in utilities bonds.

CERTIFICATES OF PARTICIPATION. NEW YORK INSURED's Board of Directors and
MULTI-STATE INSURED's Board of Trustees (collectively, "Board") have established
guidelines for determining the liquidity of the COPs in the applicable Series'
portfolio and, subject to review by that Fund's Board, has delegated that
responsibility to the Adviser. Pursuant to these guidelines, the Adviser will
consider (1) the frequency of trades and quotes for the security, (2) the number
of dealers willing to purchase or sell the security and the number of other
potential buyers, (3) the willingness of dealers to undertake to make a market
in the security, (4) the nature of the marketplace, namely, the time needed to
dispose of the security, the method of soliciting offers and the mechanics of
transfer, (5) the coverage of the obligation by new issue insurance, (6) the
likelihood that the marketability of the obligation will be maintained through
the time the security is held by the Series, and (7) for unrated COPs, the COPs'
credit status analyzed by the Adviser according to the factors reviewed by
rating agencies.

The Fund's Board of Trustees has established guidelines for determining the
liquidity of the COPs in the Series' portfolios and, subject to review by the
Fund's Board of Trustees, has delegated that responsibility to the Adviser.
Pursuant to these guidelines, the Adviser will consider (1) the frequency of
trades and quotes for the security, (2) the number of dealers willing to
purchase or sell the security and the number of other potential buyers, (3) the
willingness of dealers to undertake to make a market in the security, (4) the
nature of the marketplace, namely, the time needed to dispose of the security,
the method of soliciting offers and the mechanics of transfer, (5) the coverage
of the obligation by new issue insurance, (6) the likelihood that the
marketability of the obligation will be maintained through the time the security
is held by the Series, and (7) for unrated COPs, the COPs' credit status
analyzed by the Adviser according to the factors reviewed by rating agencies.

DETACHABLE CALL OPTIONS. Detachable call options are sold by issuers of
municipal bonds separately from the municipal bonds to which the call options
relate and permit the purchasers of the call options to acquire the municipal
bonds at the call prices and call dates. In the event that interest rates drop,
the purchaser could exercise the call option to acquire municipal bonds that
yield above-market rates. Each Series may acquire detachable call options
relating to municipal bonds that the Series already owns or will acquire in the
immediate future and thereby, in effect, make such municipal bonds non-callable

<PAGE>

so long as the Series continues to hold the detachable call option. Each Series
will consider detachable call options to be illiquid securities and they will be
treated as such for purposes of certain investment limitation calculations.

HIGH YIELD SECURITIES. Although each Series may invest up to 5% of its net
assets in municipal bonds rated lower than Baa by Moody's Investors Service,
Inc. ("Moody's") or BBB by Standard &Poor's Ratings Group ("S&P"), each Series
currently does not intend to purchase such municipal bonds. However,
occasionally a Series may hold in its portfolio a municipal bond that has had
its rating downgraded. In each instance, such bonds will be covered by the
insurance feature and thus considered to be of higher quality than high yield
securities without an insurance feature. See "Insurance" for a detailed
discussion of the insurance feature. Debt obligations rated lower than Baa by
Moody's or BBB by S&P, commonly referred to as "junk bonds" are speculative and
generally involve a higher risk or loss of principal and income than higher-
rated securities ("High Yield Securities"). High Yield Securities are subject
to certain risks that may not be present with investments in high grade
securities. The prices of High Yield Securities tend to be less sensitive to
interest rate changes than higher-rated investments, but may be more sensitive
to adverse economic changes. A strong economic downturn or a substantial period
of rising interest rates could severely affect the market for High Yield
Securities.

Municipal obligations that are high yield securities rated below investment
grade ("Municipal High Yield Securities") are deemed by Moody's and S&P to be
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal and may involve major risk exposure to adverse conditions.
"Municipal High Yield Securities," unless otherwise noted, includes unrated
securities deemed to be rated below investment grade by the Series' investment
adviser, First Investors Management Company, Inc. ("Adviser" or "FIMCO").
Ratings of Municipal High Yield Securities represent the rating agencies'
opinions regarding their quality, are not a guarantee of quality and may be
reduced after a Series has acquired the security. Credit ratings attempt to
evaluate the safety of principal and interest payments and do not evaluate the
risks of fluctuations in market value. Also, rating agencies may fail to make
timely changes in credit ratings in response to subsequent events, so that an
issuer's current financial condition may be better or worse than the rating
indicates.

Municipal High Yield Securities generally offer a higher current yield than
higher grade issues. However, Municipal High Yield Securities involve higher
risks, in that they are especially subject to adverse changes in the general
economic conditions, in economic conditions of an issuer's geographic area and
in the industries or activities in which the issuer is engaged. Municipal High
Yield Securities are also especially sensitive to changes in the financial
condition of the issuer and to price fluctuations in response to changes in
interest rates. Accordingly, the yield on lower rated Municipal High Yield
Securities will fluctuate over time. During periods of economic downturn or
rising interest rates, municipal issuers may experience financial stress which
could adversely affect their ability to make payments of principal and interest
and increase the possibility of default.

In addition, Municipal High Yield Securities are frequently traded only in
markets where the number of potential purchasers and sellers, if any, is
limited. This factor may limit a Series' ability to acquire such securities and
to sell such securities at their fair value in response to changes in the
economy or the financial markets, especially for unrated Municipal High Yield
Securities. Although unrated Municipal High Yield Securities are not
necessarily of lower quality than rated Municipal High Yield Securities, the
market for rated Municipal High Yield Securities generally is broader than that
for unrated Municipal High Yield Securities. Adverse publicity and investor
perceptions, whether or not based on

<PAGE>

fundamental analysis, may also decrease the values and liquidity of Municipal
High Yield Securities, especially in a thinly traded market.

LOANS OF PORTFOLIO SECURITIES. NEW YORK INSURED may loan securities to
qualified broker-dealers or other institutional investors provided: the borrower
pledges to the Series and agrees to maintain at all times with the Series cash
collateral equal to not less than 100% of the value of the securities loaned
(plus accrued interest or dividend), if any, the loan is terminable at will by
the Series, the Series pays only reasonable custodian fees in connection with
the loan, and the Adviser monitors the creditworthiness of the borrower
throughout the life of the loan. Such loans may be terminated by the Series at
any time and the Series may vote the proxies if a material event affecting the
investment is to occur. The market risk applicable to any security loaned
remains a risk of the Series. The borrower must add to the collateral whenever
the market value of the securities rises above the level of such collateral.
The Series could incur a loss if the borrower should fail financially at a time
when the value of the loaned securities is greater than the collateral. The
primary objective of such loaning function is to supplement the Series' income
through investment of the cash collateral in short-term interest bearing
obligations. The Series may make loans, together with illiquid securities, not
in excess of 15% of its net assets.

REPURCHASE AGREEMENTS. Each Series may enter into repurchase agreements
with banks which are members of the Federal Reserve System or securities dealers
who are members of a national securities exchange or are market makers in
government securities. The period of these repurchase agreements will usually
be short, from overnight to one week, and at no time will a Series invest in
repurchase agreements with more than one year in time to maturity. The
securities which are subject to repurchase agreements, however, may have
maturity dates in excess of one year from the effective date of the repurchase
agreement. Each Series will always receive, as collateral, securities whose
market value, including accrued interest, which will at all times be at least
equal to 100% of the dollar amount invested by the Series in each agreement, and
the Series will make payment for such securities only upon physical delivery or
evidence of book entry transfer to the account of the custodian. If the seller
defaults, a Series might incur a loss if the value of the collateral securing
the repurchase agreement declines, and might incur disposition costs in
connection with liquidating the collateral. In addition, if bankruptcy or
similar proceedings are commenced with respect to the seller of the security,
realization upon the collateral by a Series may be delayed or limited. No
Series may enter into a repurchase agreement with more than seven days to
maturity if, as a result, more than 15% of the market value of such Series' net
assets would be invested in such repurchase agreements and other illiquid
investments.

RESTRICTED AND ILLIQUID SECURITIES. No Series will purchase or otherwise
acquire any security if, as a result, more than 15% of its net assets (taken at
current value) would be invested in securities that are illiquid by virtue of
the absence of a readily available market or legal or contractual restrictions
on resale. This policy includes detachable call options and repurchase
agreements maturing in more than seven days. This policy does not include
restricted securities eligible for resale pursuant to Rule 144A under the
Securities Act of 1933, as amended ("1933 Act"), which each Fund's Board of
Directors or Trustees or the Adviser has determined under Board-approved
guidelines are liquid.

Restricted securities which are illiquid may be sold only in privately
negotiated transactions or in public offerings with respect to which a
registration statement is in effect under the 1933 Act. Such securities include
those that are subject to restrictions contained in the securities laws of other
countries. Securities that are freely marketable in the country where they are
principally traded, but would not be freely marketable in the United States,
will not be subject to this 15% limit. Where registration is

<PAGE>

required, a Series may be obligated to pay all or part of the registration
expenses and a considerable period may elapse between the time of the decision
to sell and the time the Series may be permitted to sell a security under an
effective registration statement. If, during such a period, adverse market
conditions were to develop, a Series might obtain a less favorable price than
prevailed when it decided to sell.

In recent years, a large institutional market has developed for certain
securities that are not registered under the 1933 Act, including private
placements, repurchase agreements, commercial paper, foreign securities and
corporate bonds and notes. These instruments are often restricted securities
because the securities are either themselves exempt from registration or sold in
transactions not requiring registration. Institutional investors generally will
not seek to sell these instruments to the general public, but instead will often
depend on an efficient institutional market in which such unregistered
securities can be readily resold or on an issuer's ability to honor a demand for
repayment. Therefore, the fact that there are contractual or legal restrictions
on resale to the general public or certain institutions is not dispositive of
the liquidity of such investments.

Rule 144A under the 1933 Act establishes a "safe harbor" from the
registration requirements of the 1933 Act for resales of certain securities to
qualified institutional buyers. Institutional markets for restricted securities
that might develop as a result of Rule 144A could provide both readily
ascertainable values for restricted securities and the ability to liquidate an
investment in order to satisfy share redemption orders. An insufficient number
of qualified institutional buyers interested in purchasing Rule 144A-eligible
securities held by a Series, however, could affect adversely the marketability
of such portfolio securities and the Series might be unable to dispose of such
securities promptly or at reasonable prices.

U.S. GOVERNMENT OBLIGATIONS. Securities issued or guaranteed as to
principal and interest by the U.S. Government include (1) U.S. Treasury
obligations which differ only in their interest rates, maturities and times of
issuance as follows: U.S. Treasury bills (maturities of one year or less), U.S.
Treasury notes (maturities of one to ten years), and U.S. Treasury bonds
(generally maturities of greater than ten years); and (2) obligations issued or
guaranteed by U.S. Government agencies and instrumentalities that are backed by
the full faith and credit of the United States, such as securities issued by the
Federal Housing Administration, Government National Mortgage Association, the
Department of Housing and Urban Development, the Export-Import Bank, the General
Services Administration and the Maritime Administration and certain securities
issued by the Farmers Home Administration and the Small Business Administration.
The range of maturities of U.S. Government Obligations is usually three months
to thirty years.

WHEN-ISSUED SECURITIES. Each Series may invest up to 25% of its net assets
in securities issued on a when-issued or delayed delivery basis, which involves
an arrangement whereby delivery of, and payment for, the instruments occur up to
45 days after the agreement to purchase the instruments is made by a Series.
The purchase price to be paid by a Series and the interest rate on the
instruments to be purchased are both selected when the Series agrees to purchase
the securities on a "when-issued" basis. A Series generally would not pay for
such securities or start earning interest on them until they are issued or
received. However, when a Series purchases debt obligations on a when-issued
basis, it assumes the risks of ownership, including the risk of price
fluctuation, at the time of purchase, not at the time of receipt. Failure of
the issuer to deliver a security purchased by a Series on a when-issued basis
may result in such Series incurring a loss or missing an opportunity to make an
alternative investment. When a Series enters into a commitment to purchase
securities on a when-issued basis, it establishes a separate

<PAGE>

account with its custodian consisting of cash, U.S. Government securities or
other liquid high-grade debt securities equal to the amount of the Series'
commitment, which are valued at their fair market value. If on any day the
market value of this segregated account falls below the value of the Series'
commitment, the Series will be required to deposit additional cash or qualified
securities into the account until equal to the value of the Series' commitment.
When the securities to be purchased are issued, a Series will pay for the
securities from available cash, the sale of securities in the segregated
account, sales of other securities and, if necessary, from sale of the
when-issued securities themselves although this is not ordinarily expected.
Securities purchased on a when-issued basis are subject to the risk that yields
available in the market, when delivery takes place, may be higher than the rate
to be received on the securities a Series is committed to purchase. Sale of
securities in the segregated account or other securities owned by a Series and
when-issued securities may cause the realization of a capital gain or loss.

ZERO COUPON SECURITIES. Each Series may invest in zero coupon municipal
securities. Zero coupon securities are debt obligations that do not entitle the
holder to any periodic payment of interest prior to maturity or a specified date
when the securities begin paying current interest. They are issued and traded
at a discount from their face amount or par value, which discount varies
depending on the time remaining until cash payments begin, prevailing interest
rates, liquidity of the security and the perceived credit quality of the issuer.
Original issue discount earned on zero coupon securities must be included in a
Series' income. Thus, to continue to qualify for tax treatment as a regulated
investment company, a Series may be required to distribute as a dividend an
amount that is greater than the total amount of cash it actually receives.
These distributions must be made from a Series' cash assets or, if necessary,
from the proceeds of sales of portfolio securities. A Series will not be able
to purchase additional income-producing securities with cash used to make such
distributions, and its current income ultimately could be reduced as a result.
The market prices of zero coupon securities generally are more volatile than the
prices of securities that pay interest periodically and in cash and are likely
to respond to changes in interest rates to a greater degree than do other types
of debt securities having similar maturities and credit quality.

PORTFOLIO TURNOVER. The Adviser manages each Series' portfolio by the
purchase and sale of securities with a view to achieving its investment
objective. Securities are purchased and sold in response to their current
yields and evaluation of an issuer's ability to meet its debt obligations in the
future and assessment of future changes in the levels of the interest rates on
municipal bonds of varying maturities. Although each Series has no current
intention of purchasing securities for this purpose, each Series may engage to a
limited extent in short-term trading consistent with its investment objective
and policies (to secure higher income, to preserve capital or to upgrade the
quality of bonds held). A portfolio turnover rate of 100% would occur, for
example, if all the securities in a Series' portfolio, with the exception of
securities whose maturities at the time of acquisition were one year or less,
were replaced in a single year. A high rate of portfolio turnover generally
leads to transaction costs and may result in a greater number of taxable
transactions. See "Allocation of Portfolio Brokerage." For the fiscal years
ended December 31, 1993 and 1994, the portfolio turnover rate for NEW YORK
INSURED was 31% and 55%, respectively. See the Prospectus for the portfolio
turnover rate for the OREGON SERIES. For the fiscal years ended December 31,
1993 and 1994, the portfolio turnover rate for each other Series of MULTI-STATE
INSURED was as follows:

<PAGE>

Fiscal Year Fiscal Year
Ended Ended
December 31, 1993 December 31, 1994
----------------- -----------------

ARIZONA SERIES 45% 63%
CALIFORNIA SERIES 66 83
COLORADO SERIES* 27 108
CONNECTICUT SERIES 29 63
FLORIDA SERIES 53 98
GEORGIA SERIES** 50 78
MARYLAND SERIES 50 44
MASSACHUSETTS SERIES 32 64
MICHIGAN SERIES 25 60
MINNESOTA SERIES 41 34
MISSOURI SERIES* 8 98
NEW JERSEY SERIES 44 60
NORTH CAROLINA SERIES* 32 61
OHIO SERIES 30 57
PENNSYLVANIA SERIES 37 81
VIRGINIA SERIES 39 55
- ----------------

* For the period May 4, 1992 (commencement of operations) through
December 31, 1992.
** For the period May 1, 1992 (commencement of operations) through
December 31, 1992.

HEDGING AND OPTION INCOME STRATEGIES

The Adviser may engage in certain options and futures strategies to hedge
each Series' portfolio, in other circumstances permitted by the Commodities
Futures Trading Commission ("CFTC") and engage in certain options strategies to
enhance income. The instruments described below are sometimes referred to
collectively as "Hedging Instruments." Certain special characteristics of and
risks associated with using Hedging Instruments are discussed below. In
addition to the non-fundamental investment guidelines (described below) adopted
by each Fund's Board of Directors or Trustees to govern each Series' investments
in Hedging Instruments, use of these instruments is subject to the applicable
regulations of the Securities and Exchange Commission ("SEC"), the several
options and futures exchanges upon which options and futures contracts are
traded, the CFTC and various state regulatory authorities. In addition, a
Series' ability to use Hedging Instruments will be limited by tax
considerations. See "Taxes."

Participation in the options or futures markets involves investment risks
and transaction costs to which a Series would not be subject absent the use of
these strategies. If the Adviser's prediction of movements in the direction of
the securities and interest rate markets are inaccurate, the adverse
consequences to a Series may leave the Series in a worse position than if such
strategies were not used. A Series might not employ any of the strategies
described below, and there can be no assurance that any strategy will succeed.
The use of these strategies involve certain special risks, including
(1) dependence on the Adviser's ability to predict correctly movements in the
direction of interest rates and securities prices, (2) imperfect correlation
between the price of options, futures contracts and options thereon and
movements in the prices of the securities being hedged, (3) the fact that skills
needed to use these strategies are different from those needed to select
portfolio securities, (4) the possible absence of a liquid secondary market for
any particular instrument at any time, and (5) the possible need to defer
closing out certain hedged positions to avoid adverse tax consequences.

<PAGE>

Although each Series may engage in the strategies listed below, they intend
only to engage in transactions involving financial futures contracts and options
thereon.

COVER FOR HEDGING AND OPTION INCOME STRATEGIES. No Series will use
leverage in its hedging and option income strategies. In the case of each
transaction entered into as a hedge, each Series will hold securities or other
options or futures positions whose values are expected to offset ("cover") its
obligations hereunder. No Series will enter into a hedging or option income
strategy that exposes the Series to an obligation to another party unless it
owns either (1) an offsetting ("covered") position in securities or other
options or futures contracts or (2) cash, receivables and short-term debt
securities with a value sufficient at all times to cover its potential
obligations. Each Series will comply with guidelines established by the SEC
with respect to coverage of hedging and option income strategies by mutual funds
and, if required, will set aside cash and/or liquid, high-grade debt securities
in a segregated account with its custodian in the prescribed amount. Securities
or other options or futures positions used for cover and securities held in a
segregated account cannot be sold or closed out while the hedging or option
income strategy is outstanding unless they are replaced with similar assets. As
a result, there is a possibility that the use of cover or segregation involving
a large percentage of a Series' assets could impede portfolio management or the
Series' ability to meet redemption requests or other current obligations.

OPTIONS STRATEGIES. Each Series may purchase call options on securities
that the Adviser intends to include in its portfolio in order to fix the cost of
a future purchase. Call options also may be used as a means of participating in
an anticipated price increase of a security. In the event of a decline in the
price of the underlying security, use of this strategy would serve to limit the
Series' potential loss to the option premium paid; conversely, if the market
price of the underlying security increases above the exercise price and a Series
either sells or exercises the option, any profit eventually realized will be
reduced by the premium. Each Series may purchase put options in order to hedge
against a decline in the market value of securities held in its portfolio. The
put option enables a Series to sell the underlying security at the predetermined
exercise price; thus the potential for loss to the Series below the exercise
price is limited to the option premium paid. If the market price of the
underlying security is higher than the exercise price of the put option, any
profit the Series realizes on the sale of the security will be reduced by the
premium paid for the put option less any amount for which the put option may be
sold.
Each Series may write covered call options on securities to increase income
in the form of premiums received from the purchasers of the options. Because it
can be expected that a call option will be exercised if the market value of the
underlying security increases to a level greater than the exercise price, a
Series will write covered call options on securities generally when the Adviser
believes that the premium received by the Series, plus anticipated appreciation
in the market price of the underlying security up to the exercise price of the
option, will be greater than the total appreciation in the price of the
security. The strategy may be used to provide limited protection against a
decrease in the market price of the security in an amount equal to the premium
received for writing the call option less any transaction costs. Thus, if the
market price of the underlying security held by a Series declines, the amount of
such decline will be offset wholly or in part by the amount of the premium
received by the Series. If, however, there is an increase in the market price
of the underlying security and the option is exercised, the Series will be
obligated to sell the security at less than its market value. A Series gives up
the ability to sell the portfolio securities used to cover the call option while
the call option is outstanding. Such securities may also be considered illiquid
in the case of over-the-counter ("OTC") options written by a Series, to the
extent described under "Investment Policies--Restricted and Illiquid Securities"
and therefore subject to each Series' limitation on investments in illiquid
securities. In addition, a Series could lose the ability to

<PAGE>

participate in an increase in the value of such securities above the exercise
price of the call option because such an increase would likely be offset by an
increase in the cost of closing out the call option (or could be negated if the
buyer chose to exercise the call option at an exercise price below the
securities' current market value).

Each Series may write put options. A put option gives the purchaser of the
option the right to sell, and the writer (seller) the obligation to buy, the
underlying security at the exercise price during the option period. So long as
the obligation of the writer continues, the writer may be assigned an exercise
notice by the broker-dealer through which such option was sold, requiring it to
make payment of the exercise price against delivery of the underlying security.
The operation of put options in other respects, including their related risks
and rewards, is substantially identical to that of call options. A Series may
write covered put options in circumstances when the Adviser believes that the
market price of the securities will not decline below the exercise price less
the premiums received. If the put option is not exercised, a Series will
realize income in the amount of the premium received. This technique could be
used to enhance current return during periods of market uncertainty. The risk
in such a transaction would be that the market price of the underlying security
would decline below the exercise price less the premiums received, in which case
the Series would expect to suffer a loss.

Each Series may purchase U.S. exchange-traded put and call options on stock
indices in much the same manner as the more traditional equity and debt options
discussed above, except that stock index options may serve as a hedge against
overall fluctuations in the securities markets (or a market sector) rather than
anticipated increases or decreases in the value of a particular security. A
stock index assigns relative values to the stock included in the index and
fluctuates with changes in such values. Stock index options operate in the same
way as the more traditional equity options, except that settlements of stock
index options are effected with cash payments and do not involve delivery of
securities. Thus, upon settlement of a stock index option, the purchaser will
realize, and the writer will pay, an amount based on the difference between the
exercise price and the closing price of the stock index. The effectiveness of
hedging techniques using stock index options will depend on the extent to which
price movements in the stock index selected correlate with price movements of
the securities in which a Series invests.

Currently, many options on equity securities are exchange-traded, whereas
options on debt securities are primarily traded on the OTC market. Exchange-
traded options in the U.S. are issued by a clearing organization affiliated with
the exchange on which the option is listed which, in effect, guarantees
completion of every exchange-traded option transaction. In contrast, OTC
options are contracts between a Series and the opposite party with no clearing
organization guarantee. Thus, when a Series purchases an OTC option, it relies
on the dealer from which it has purchased the OTC option to make or take
delivery of the securities underlying the option. Failure by the dealer to do
so would result in the loss of the premium paid by the Series as well as the
loss of the expected benefit of the transaction.

OPTIONS GUIDELINES. In view of the risks involved in using options, each
Fund's Board of Directors or Trustees has adopted non-fundamental investment
guidelines to govern a Series' use of options that may be modified by each Board
without shareholder vote: (1) options will be purchased or written only when
the Adviser believes that there exists a liquid secondary market in such
options; and (2) a Series may purchase a put or call option if the value of the
option's premium, when aggregated with the premiums on all other options held by
such Series, exceeds 5% of that Series' total assets.

<PAGE>

SPECIAL CHARACTERISTICS AND RISKS OF OPTIONS TRADING. Each Series may
effectively terminate its right or obligation under an option by entering into a
closing transaction. If a Series wishes to terminate its obligation to sell
securities under a call option it has written, the Series may purchase a call
option of the same series (that is, a call option identical in its terms to the
call option previously written); this is known as a closing purchase
transaction. Conversely, in order to terminate its right to purchase or sell
specified securities under a call or put option it has purchased, a Series may
write an option of the same series as the option held; this is known as a
closing sale transaction. Closing transactions essentially permit a Series to
realize profits or limit losses on its options positions prior to the exercise
or expiration of the option. Whether a profit or loss is realized from a
closing transaction depends on the price movement of the underlying index or
security and the market value of the option.

The value of an option position will reflect, among other things, the
current market price of the underlying security or stock index, the time
remaining until expiration, the relationship of the exercise price to the market
price, the historical price volatility of the underlying security or stock index
and general market conditions. For this reason, the successful use of options
depends upon the Adviser's ability to forecast the direction of price
fluctuations in the underlying securities or, in the case of stock index
options, fluctuations in the market sector represented by the index selected.

Options normally have expiration dates of up to nine months. Unless an
option purchased by a Series is exercised or unless a closing transaction is
effected with respect to that position, a loss will be realized in the amount of
the premium paid and any transaction costs.

A position in an exchange-listed option may be closed out only on an
exchange that provides a secondary market for identical options. The ability to
establish and close out positions on the exchanges is subject to the maintenance
of a liquid secondary market. Although each Series intends to purchase or write
only those exchange-traded options for which there appears to be a liquid
secondary market, there is no assurance that a liquid secondary market will
exist for any particular option at any particular time. Closing transactions
may be effected with respect to options traded in the OTC markets (currently the
primary markets for options on debt securities) only by negotiating directly
with the other party to the option contract or in a secondary market for the
option if such market exists. Although a Series will enter into OTC options
only with dealers that agree to enter into, and that are expected to be capable
of entering into, closing transactions with a Series, there is no assurance that
the Series will be able to liquidate an OTC option at a favorable price at any
time prior to expiration. In the event of insolvency of the opposite party, a
Series may be unable to liquidate an OTC option. Accordingly, it may not be
possible to effect closing transactions with respect to certain options, with
the result that a Series would have to exercise those options that it has
purchased in order to realize any profit. With respect to options written by a
Series, the inability to enter into a closing transaction may result in material
losses to the Series. For example, because a Series must maintain a covered
position with respect to any call option it writes, the Series may not sell the
underlying assets used to cover an option during the period it is obligated
under the option. This requirement may impair a Series' ability to sell a
portfolio security or make an investment at a time when such a sale or
investment might be advantageous.

Stock index options are settled exclusively in cash. If a Series purchases
an option on a stock index, the option is settled based on the closing value of
the index on the exercise date. Thus, a holder of a stock index option who
exercises it before the closing index value for that day is available runs the
risk that the level of the underlying index may subsequently change. For
example, in the case of a call option, if such a change causes the closing index
value to fall below the exercise price of the option on

<PAGE>

the index, the exercising holder will be required to pay the difference between
the closing index value and the exercise price of the option.

A Series' activities in the options markets may result in a higher
portfolio turnover rate and additional brokerage costs; however, a Series also
may save on commissions by using options as a hedge rather than buying or
selling individual securities in anticipation or as a result of market
movements.

FUTURES STRATEGIES. Each Series may engage in futures strategies to
attempt to reduce the overall investment risk that would normally be expected to
be associated with ownership of the securities in which it invests.

Each Series may use financial futures contracts and options thereon to
hedge the debt portion of its portfolio against changes in the general level of
interest rates. A Series may purchase a financial futures contract when it
intends to purchase debt securities but has not yet done so. This strategy may
minimize the effect of all or part of an increase in the market price of those
securities because a rise in the price of the securities prior to their purchase
may either be offset by an increase in the value of the futures contract
purchased by the Series or avoided by taking delivery of the debt securities
under the futures contract. Conversely, a fall in the market price of the
underlying debt securities may result in a corresponding decrease in the value
of the futures position. A Series may sell a financial futures contract in
order to continue to receive the income from a debt security, while endeavoring
to avoid part or all of the decline in the market value of that security that
would accompany an increase in interest rates.

Each Series may purchase a call option on a financial futures contract to
hedge against a market advance in debt securities that the Series plans to
acquire at a future date. A Series also may write covered call options on
financial futures contracts as a partial hedge against a decline in the price of
debt securities held in the Series' portfolio or purchase put options on
financial futures contracts in order to hedge against a decline in the value of
debt securities held in the Series' portfolio.

Each Series will use futures contracts and options thereon solely in bona
fide hedging transactions or under other circumstances permitted by the CFTC and
will not enter into such investments for which the aggregate initial margin and
premiums exceed 5% of such Series' total assets. Each Fund has represented the
foregoing to the CFTC.

FUTURES GUIDELINES. In view of the risks involved in using futures
strategies described below, each Fund's Board of Directors or Trustees has
adopted non-fundamental investment guidelines to govern the use of such
investments by the Series that may be modified by each Board without shareholder
vote. A Series will not purchase or sell futures contracts or related options
if, immediately thereafter, the sum of the amount of initial margin deposits on
such Series' existing futures positions and margin and premiums paid for related
options would exceed 5% of the market value of that Series' total assets. The
value of all futures sold will not exceed the total market value of a Series'
portfolio. In addition, each Series may not purchase financial futures
contracts if immediately thereafter more than 30% of its total assets would be
so invested.

SPECIAL CHARACTERISTICS AND RISKS OF FUTURES TRADING. No price is paid
upon entering into futures contracts. Instead, upon entering into a futures
contract, a Series is required to deposit with its custodian in a segregated
account in the name of the futures broker through which the transaction is
effected an amount of cash, U.S. Government securities or other liquid, high-
grade debt instruments

<PAGE>

generally equal to 3%-5% of the contract value. This amount is known as
"initial margin." When writing a put or call option on a futures contract,
margin also must be deposited in accordance with applicable exchange rules.
Initial margin on futures contracts is in the nature of a performance bond or
good-faith deposit that is returned to a Series upon termination of the
transaction, assuming all obligations have been satisfied. Under certain
circumstances, such as periods of high volatility, a Series may be required by
an exchange to increase the level of its initial margin payment. Additionally,
initial margin requirements may be increased generally in the future by
regulatory action. Subsequent payments, called "variation margin," to and from
the broker, are made on a daily basis as the value of the futures position
varies, a process known as "marking to market." Variation margin does not
involve borrowing to finance the futures transactions, but rather represents a
daily settlement of a Series' obligation to or from a clearing organization.

Holders and writers of futures positions and options thereon can enter into
offsetting closing transactions, similar to closing transactions on options on
securities, by selling or purchasing, respectively, a futures position or
options position with the same terms as the position or option held or written.
Positions in futures contracts and options thereon may be closed only on an
exchange or board of trade providing a secondary market for such futures or
options.

Under certain circumstances, futures exchanges may establish daily limits
on the amount that the price of a futures contract or related option may vary
either up or down from the previous day's settlement price. Once the daily
limit has been reached in a particular contract, no trades may be made that day
at a price beyond that limit. The daily limit governs only price movements
during a particular trading day and therefore does not limit potential losses
because prices could move to the daily limit for several consecutive trading
days with little or no trading and thereby prevent prompt liquidation of
unfavorable positions. In such event, it may not be possible for a Series to
close a position and, in the event of adverse price movements the Series would
have to make daily cash payments of variation margin (except in the case of
purchased options). However, in the event futures contracts have been used to
hedge portfolio securities, such securities will not be sold until the contracts
can be terminated. In such circumstances, an increase in the price of the
securities, if any, may partially or completely offset losses on the futures
contract. However, there is no guarantee that the price of the securities will,
in fact, correlate with the price movements in the contracts and thus provide an
offset to losses on the contracts.

Successful use by a Series of futures contracts and related options will
depend upon the Adviser's ability to predict movements in the direction of the
overall securities and interest rate markets, which requires different skills
and techniques than predicting changes in the prices of individual securities.
Moreover, futures contracts relate not to the current price level of the
underlying instrument but to the anticipated levels at some point in the future.
There is, in addition, the risk that the movements in the price of the futures
contract or related option will not correlate with the movements in prices of
the securities being hedged. In addition, if a Series has insufficient cash, it
may have to sell assets from its portfolio to meet daily variation margin
requirements. Any such sale of assets may or may not be made at prices that
reflect the rising market. Consequently, a Series may need to sell assets at a
time when such sales are disadvantageous to the Series. If the price of the
futures contract or related option moves more than the price of the underlying
securities, a Series will experience either a loss or a gain on the futures
contract or related option, that may or may not be completely offset by
movements in the price of the securities that are the subject of the hedge.

<PAGE>

In addition to the possibility that there may be an imperfect correlation,
or no correlation at all, between price movements in the futures or related
option position and the securities being hedged, movements in the prices of
futures contracts and related options may not correlate perfectly with movements
in the prices of the hedged securities because of price distortions in the
futures market. As a result, a correct forecast of general market trends may
not result in successful hedging through the use of futures contracts and
related options over the short term.

Positions in futures contracts may be closed out only on an exchange or
board of trade that provides a secondary market for such futures contracts or
related options. Although each Series intends to purchase or sell futures and
related options only on exchanges or boards of trade where there appears to be a
liquid secondary market, there is no assurance that such a market will exist for
any particular contract or option at any particular time. In such event, it may
not be possible to close a futures or option position and, in the event of
adverse price movements, a Series would continue to be required to make
variation margin payments.

Like options on securities, options on futures contracts have a limited
life. The ability to establish and close out options on futures will be subject
to the development and maintenance of liquid secondary markets on the relevant
exchanges or boards of trade. There can be no certainty that liquid secondary
markets for all options on futures contracts will develop.

Purchasers of options on futures contracts pay a premium in cash at the
time of purchase. This amount and the transaction costs are all that is at
risk. Sellers of options on a futures contract, however, must post initial
margin and are subject to additional margin calls that could be substantial in
the event of adverse price movements. In addition, although the maximum amount
at risk when a Series purchases an option is the premium paid for the option and
the transaction costs, there may be circumstances when the purchase of an option
on a futures contract would result in a loss to the Series when the use of a
futures contract would not, such as when there is no movement in the level of
the underlying stock index or the value of the securities being hedged.

Each Series' activities in the futures and related options markets may
result in a higher portfolio turnover rate and additional transaction costs in
the form of added brokerage commissions; however, the Series also may save on
commissions by using futures and related options as a hedge rather than buying
or selling individual securities or currencies in anticipation or as a result of
market movements.

INVESTMENT RESTRICTIONS

The investment restrictions set forth below have been adopted by the
respective Series and, unless identified as non-fundamental policies, may not be
changed without the approval of a vote of a majority of the outstanding voting
securities of that Series. As provided in the Investment Company Act of 1940,
as amended ("1940 Act"), a "vote of a majority of the outstanding voting
securities of the Series" means the affirmative vote of the lesser of (1) more
than 50% of the outstanding shares of the Series or (2) 67% or more of the
shares of the Series present at a meeting, if more than 50% of the outstanding
shares are represented at the meeting in person or by proxy. Changes in values
of a Series' assets will not cause a violation of the following investment
restrictions so long as percentage restrictions are observed by that Series at
the time it purchases any security.

<PAGE>

NEW YORK INSURED. NEW YORK INSURED will not:

(1) Borrow money except for temporary or emergency purposes (not for
leveraging or investment) in an amount not exceeding 5% of the value of its
total assets (including the amount borrowed) less liabilities (other than
borrowings). Any borrowings that exceed 5% of the value of the Fund's total
assets by reason of a decline in net assets will be reduced within three
business days to the extent necessary to comply with the 5% limitation. This
policy shall not prohibit deposits of assets to provide margin or guarantee
positions in connection with transactions in options, futures contracts, swaps,
forward contracts, and other derivative instruments or the segregation of assets
in connection with such transactions.

(2) Make loans, except by purchase of debt obligations and through
repurchase agreements. However, the Fund's Board of Directors may, on the
request of broker-dealers or other institutional investors which they deem
qualified, authorize the Fund to loan securities to cover the borrower's short
position; provided, however, the borrower pledges to the Fund and agrees to
maintain at all times with the Fund cash collateral equal to not less than 100%
of the value of the securities loaned; and, further provided, that such loans
will not be made if the value of all such loans, repurchase agreements maturing
in more than seven days and other illiquid assets is greater than an amount
equal to 15% of the Fund's net assets.

(3) Purchase the securities of any issuer (other than obligations issued
or guaranteed as to principal and interest by the Government of the United
States or any agency or instrumentality thereof) if, as a result thereof, (a)
more than 5% of the Fund's total assets (taken at current value) would be
invested in the securities of such issuer, or (b) the Fund would hold more than
10% of any class of securities (including any class of voting securities) of
each issuer (for this purpose, all debt obligations of an issuer maturing in
less than one year are treated as a single class of securities).

(4) Invest more than 25% of the Fund's total assets (taken at current
value) in the obligations of one or more issuers having their principal business
activities in the same industry.

(5) Purchase the securities of an issuer if such purchase, at the time
thereof, would cause more than 5% of the value of the Fund's total assets to be
invested in securities of issuers which, including predecessors, have a record
of less than three years' continuous operation.

(6) Purchase a Municipal Instrument unless it is an Insured Municipal
Instrument, or is already insured by a policy of insurance or, as to uninsured
municipal commercial paper or municipal notes, is supported by a letter of
credit or other similar guarantee obtained by the issuer or underwriter thereof.

(7) Purchase the securities of other companies or investment trusts,
except as they may be acquired as part of a merger, consolidation or acquisition
of assets.

(8) Underwrite securities issued by other persons except to the extent
that, in connection with the disposition of its portfolio investments, it may be
deemed to be an underwriter under Federal securities laws.

<PAGE>

(9) Buy or sell real estate or interests in oil, gas or mineral
exploration, or issue senior securities (as defined in the 1940 Act); provided,
however, the Fund may invest in Municipal Instruments secured by real estate or
interests in real estate.

The Fund has adopted the following non-fundamental investment restrictions,
which may be changed without shareholder approval. The restrictions provide
that the Fund will not:

(1) Purchase any security if, as a result, more than 15% of its net assets
would be invested in illiquid securities, including repurchase agreements not
entitling the holder to payment of principal and interest within seven days and
any securities that are illiquid by virtue of legal or contractual restrictions
on resale or the absence of a readily available market. The Directors, or the
Fund's investment adviser acting pursuant to authority delegated by the
Directors, may determine that a readily available market exists for securities
eligible for resale pursuant to Rule 144A under the Securities Act of 1933, as
amended, or any other applicable rule, and therefore that such securities are
not subject to the foregoing limitation.

(2) Purchase or sell physical commodities unless acquired as a result of
ownership of securities (but this restriction shall not prevent the Fund from
purchasing or selling options, futures contracts, caps, floors and other
derivative instruments, engaging in swap transactions or investing in securities
or other instruments backed by physical commodities).

(3) Enter into futures contracts or options on futures contracts if
immediately thereafter the aggregate margin deposits on all outstanding futures
contracts positions held by the Fund and premiums paid on outstanding options on
futures contracts, after taking into account unrealized profits and losses,
would exceed 5% of the market value of the total assets of the Fund, or enter
into any futures contracts or options on futures contracts if the aggregate
amount of the Fund's commitments under outstanding futures contracts positions
and options on future contracts written by the Fund would exceed the market
value of the total assets of the Fund.

(4) Pledge assets, except that the Fund may pledge its assets to secure
borrowings made in accordance with fundamental investment restriction (1) above,
provided the Fund maintains asset coverage of at least 300% for pledged assets;
provided, however, this limitation will not prohibit escrow, collateral or
margin arrangements in connection with the Fund's use of options, futures
contracts or options on futures contracts.

(5) Purchase securities on margin, except that the Fund may obtain such
short-term credits as are necessary for the clearance of transactions, and
provided that margin payments and other deposits made in connection with
transactions in options, futures contracts, swaps, forward contracts, and other
derivative instruments shall not be deemed to constitute purchasing securities
on margin.

(6) Sell securities short, unless it owns or has the right to obtain
securities, without additional consideration, equivalent in kind and amount to
the securities sold short, and provided that transactions in options, futures
contracts, swaps, forward contracts, and other derivative instruments are not
deemed to constitute selling securities short.

<PAGE>

MULTI-STATE INSURED. Each Series of MULTI-STATE INSURED will not:

(1) Borrow money except for temporary or emergency purposes (not for
leveraging or investment) in an amount not exceeding 5% of the value of its
total assets (including the amount borrowed) less liabilities (other than
borrowings). Any borrowings that exceed 5% of the value of a Series' total
assets by reason of a decline in net assets will be reduced within three
business days to the extent necessary to comply with the 5% limitation. This
policy shall not prohibit deposits of assets to provide margin or guarantee
positions in connection with transactions in options, futures contracts, swaps,
forward contracts, and other derivative instruments or the segregation of assets
in connection with such transactions.

(2) Purchase, as to 75% of each Series' total assets (taken at current
value), the securities of any issuer (other than the U.S. Government) if, as a
result thereof, more than 5% of the total assets of such Series would be
invested in the securities of such issuer. When the assets and revenues of an
agency, instrumentality or political subdivision issuing a Municipal Instrument
or other security are distinct from the assets and revenues of the government
which created the issuing entity, and the Municipal Instrument is supported by
the issuing entity's assets and revenues, the issuing entity is deemed to be the
sole issuer of the Municipal Instrument or security. If an industrial
development bond is supported only by the payments of the nongovernmental
beneficiary of the industrial development bond, then such nongovernmental entity
is deemed to be the sole issuer. With respect to pre-refunded bonds, the
Adviser considers an escrow account to be the issuer of such bonds when the
escrow account consists solely of U.S. Government obligations fully substituted
for the obligation of the issuing municipality.

(3) Purchase the securities of any issuer (other than the U.S. Government)
if, as a result thereof, any Series would hold more than 10% of any class of
securities (including any class of voting securities) of such issuer.

(4) Purchase the securities of an issuer if such purchase, at the time
thereof, would cause more than 5% of the value of the total assets of any Series
to be invested in securities of issuers which, including predecessors, have a
record of less than three years' continuous operation.

(5) Purchase the securities of other investment companies or investment
trusts, except as they may be acquired as part of a merger, consolidation or
acquisition of assets.

(6) Underwrite securities issued by other persons except to the extent
that, in connection with the disposition of its portfolio investments, it may be
deemed to be an underwriter under Federal securities laws.

(7) Buy or sell real estate or interests in oil, gas or mineral
exploration, or senior securities (as defined in the 1940 Act); provided,
however, each Series may invest in Municipal Instruments secured by real estate
or interests in real estate.

(8) Make loans, except by purchase of debt obligations, publicly
distributed bonds or debentures (which are not considered loans), and through
repurchase agreements.

<PAGE>

MULTI-STATE INSURED, on behalf of the Series, has adopted the following
non-fundamental investment restrictions, which may be changed without
shareholder approval. They provide that each Series will not:

(1) Purchase any security if, as a result, more than 15% of its net assets
would be invested in illiquid securities, including repurchase agreements not
entitling the holder to payment of principal and interest within seven days and
any securities that are illiquid by virtue of legal or contractual restrictions
on resale or the absence of a readily available market. The Trustees, or the
Series' investment adviser acting pursuant to authority delegated by the
Trustees, may determine that a readily available market exists for securities
eligible for resale pursuant to Rule 144A under the Securities Act of 1933, as
amended, or any other applicable rule, and therefore that such securities are
not subject to the foregoing limitation.

(2) Purchase or sell physical commodities unless acquired as a result of
ownership of securities (but this restriction shall not prevent each Series from
purchasing or selling options, futures contracts, caps, floors and other
derivative instruments, engaging in swap transactions or investing in securities
or other instruments backed by physical commodities).

(3) Enter into futures contracts or options on futures contracts if
immediately thereafter the aggregate margin deposits on all outstanding futures
contracts positions held by a Series and premiums paid on outstanding options on
futures contracts, after taking into account unrealized profits and losses,
would exceed 5% of the market value of the total assets of such Series, or enter
into any futures contracts or options on futures contracts if the aggregate
amount of a Series' commitments under outstanding futures contracts positions
and options on future contracts written by such Series would exceed the market
value of the total assets of such Series.

(4) Pledge assets, except that a Series may pledge its assets to secure
borrowings made in accordance with fundamental investment restriction (1) above,
provided such Series maintains asset coverage of at least 300% for pledged
assets; provided, however, this limitation will not prohibit escrow, collateral
or margin arrangements in connection with a Series' use of options, futures
contracts or options on futures contracts.

(5) Purchase securities on margin, except that a Series may obtain such
short-term credits as are necessary for the clearance of transactions, and
provided that margin payments and other deposits made in connection with
transactions in options, futures contracts, swaps, forward contracts, and other
derivative instruments shall not be deemed to constitute purchasing securities
on margin.

The Fund, on behalf of the Series, has filed the following undertaking to
comply with the requirements of a certain state in which shares of the Series
are sold, which may be changed without shareholder approval: Each Series will
not purchase or retain the securities of any issuer if the officers, directors
or trustees of the Fund, the Adviser, or managers own beneficially more than
one-half of one percent of the securities and together own beneficially more
than five per cent of such securities.

<PAGE>

INSURANCE

The municipal bonds in each Series' portfolio will be insured as to their
scheduled payments of principal and interest at the time of purchase either (1)
under a Mutual Fund Insurance Policy written by an independent insurance
company; (2) under an insurance policy obtained subsequent to a municipal bond's
original issue (a "Secondary Market Insurance Policy"); or (3) under an
insurance policy obtained by the issuer or underwriter of such municipal bond at
the time of original issuance (a "New Issue Insurance Policy"). An insured
municipal bond in a Series' portfolio typically will be covered by only one of
the three policies. For instance, if a municipal bond is already covered by a
New Issue Insurance Policy or a Secondary Market Insurance Policy, then that
security will not be additionally insured under the Mutual Fund Insurance
Policy.

Each Fund has purchased a Mutual Fund Insurance Policy ("Policy") from
AMBAC Indemnity Corporation ("AMBAC Indemnity"), a Wisconsin stock insurance
company, with its principal executive offices in New York City. The Policy
guarantees the payment of principal and interest on municipal bonds purchased by
a Series which are eligible for insurance under the Policy. Municipal bonds are
eligible for insurance if they are approved by AMBAC Indemnity prior to their
purchase by a Series. AMBAC Indemnity furnished each Series with an approved
list of municipal bonds at the time the Policy was issued and subsequently
provides amended and modified lists of this type at periodic intervals. AMBAC
Indemnity may withdraw particular securities from the approved list and may
limit the aggregate amount of each issue or category of municipal bonds therein,
in each case by notice to a Series prior to the entry by the Series of an order
to purchase a specific amount of a particular security otherwise eligible for
insurance under the Policy. The approved list merely identifies issuers whose
issues may be eligible for insurance and does not constitute approval of, or a
commitment by, AMBAC Indemnity to insure such securities. In determining
eligibility for insurance, AMBAC Indemnity has applied its own standards which
correspond generally to the standard it normally uses in establishing the
insurability of new issues of municipal bonds and which are not necessarily the
criteria which would be used in regard to the purchase of municipal bonds by a
Series. The Policy does not insure: (1) obligations of, or securities
guaranteed by, the United States of America or any agency or instrumentality
thereof; (2) municipal bonds which were insured as to payment of principal and
interest at the time of their issuance; (3) municipal bonds purchased by a
Series at a time when they were ineligible for insurance; (4) municipal bonds
which are insured by insurers other than AMBAC Indemnity; and (5) municipal
bonds which are no longer owned by a Series. AMBAC Indemnity has reserved the
right at any time, upon 90 days' prior written notice to a Series, to refuse to
insure any additional municipal bonds purchased by a Series, on or after the
effective date of such notice. If AMBAC Indemnity so notifies a Series, the
Series will attempt to replace AMBAC Indemnity with another insurer. If another
insurer cannot be found to replace AMBAC Indemnity, the Series will ask its
shareholders to approve continuation of its business without insurance.

In the event of nonpayment of interest or principal when due, in respect of
an insured municipal bond, AMBAC Indemnity is obligated under the Policy to make
such payment not later than 30 days after it has been notified by a Series that
such nonpayment has occurred (but not earlier than the date such payment is
due). AMBAC Indemnity, as regards insurance payments it may make, will succeed
to the rights of a Series. Under the Policy, a payment of principal on an
insured municipal bond is due for payment when the stated maturity date has been
reached, which does not include any earlier due date by reason of redemption,
acceleration or other advancement of maturity or extension or delay in payment
by reason of governmental action.

<PAGE>

The Policy does not guarantee the market value or yield of the insured
municipal bonds or the net asset value or yield of a Series' shares. The Policy
will be effective only as to insured municipal bonds owned by a Series. In the
event of a sale by a Series of a municipal bond insured under the Policy, the
insurance terminates as to such municipal bond on the date of sale. If an
insured municipal bond in default is sold by a Series, AMBAC Indemnity is liable
only for those payments of interest and principal which are then due and owing
and, after making such payments, AMBAC Indemnity will have no further
obligations to a Series in respect of such municipal bond. It is the intention
of each Series, however, 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 insured securities which are not in
default. While a defaulted bond is held by a Series, the Series continues to
pay the insurance premium thereon but also collects interest payments from the
insurer and retains the right to collect the full amount of principal from the
insurer when the municipal bond comes due. See "Determination of Net Asset
Value" for a more complete description of the Series' method of valuing
securities in default and securities which have a significant risk of default.

Each Fund may purchase a Secondary Market Insurance Policy from an
independent insurance company having a claims-paying ability rated AAA by S&P
and Aaa by Moody's which insures a particular bond for the remainder of its term
at a premium rate fixed at the time such bond is purchased by a Series. It is
expected that these premiums will range from 1% to 5% of par value. Such
insurance coverage will be noncancellable and will continue in force so long as
such bond so insured is outstanding. Each Series may also purchase municipal
bonds which are already insured under a Secondary Market Insurance Policy. A
Secondary Market Insurance Policy could enable a Series to sell a municipal bond
to a third party as an AAA/Aaa rated insured municipal bond at a market price
higher than what otherwise might be obtainable if the security were sold without
the insurance coverage. (Such rating is not automatic, however, and must
specifically be requested for each bond.) Any difference between the excess of
a bond's market value as an AAA/Aaa rated bond over its market value without
such rating and the single premium payment would inure to a Series in
determining the net capital gain or loss realized by a Series upon the sale of
the bond.

In addition to the contract of insurance relating to each Fund, there is a
contract of insurance between AMBAC Indemnity and Executive Investors Trust,
between AMBAC Indemnity and First Investors Series Fund and between AMBAC
Indemnity and First Investors Insured Tax Exempt Fund, Inc. Otherwise, neither
AMBAC Indemnity nor its parent AMBAC Inc., or any affiliate thereof, has any
material business relationship, direct or indirect, with the Funds.

AMBAC Indemnity is a Wisconsin-domiciled stock insurance corporation
regulated by the Office of the Commissioner of Insurance of the State of
Wisconsin and licensed to do business in 50 states and the District of Columbia,
with admitted assets of approximately $2,145,000,000 (unaudited) and statutory
capital of approximately $1,218,000,000 (unaudited) as of December 31, 1994.
Statutory capital consists of AMBAC Indemnity's policyholders' surplus and
statutory contingency reserve. AMBAC Indemnity is a wholly owned subsidiary of
AMBAC Inc., a 100% publicly held company. Moody's and S&P have both assigned a
triple-A claims-paying ability rating to AMBAC Indemnity.

Copies of AMBAC Indemnity's financial statements prepared in accordance
with statutory accounting standards are available from AMBAC Indemnity. The
address of AMBAC Indemnity's administrative offices and its telephone number are
One State Street Plaza, 17th Floor, New York, New York, 10004 and
1-212-668-0340.

<PAGE>

AMBAC Indemnity has obtained a ruling from the Internal Revenue Service to
the effect that the insuring of an obligation by AMBAC Indemnity will not affect
the treatment for Federal income tax purposes of interest on such obligation and
that insurance proceeds representing maturing interest paid by AMBAC Indemnity
under policy provisions substantially identical to those contained in its
municipal bond insurance policy shall be treated for Federal income tax purposes
in the same manner as if such payments were made by the issuer of the municipal
bonds.

AMBAC Indemnity makes no representation regarding the municipal bonds
included in the investment portfolio of each Series or the advisability of
investing in such municipal bonds and makes no representation regarding, nor has
it participated in the preparation of, the Prospectuses and this Statement of
Additional Information.

The information relating to AMBAC Indemnity contained above has been
furnished by AMBAC Indemnity. No representation is made herein as to the
accuracy or adequacy of such information, or as to the existence of any adverse
changes in such information, subsequent to the date hereof.

STATE SPECIFIC RISK FACTORS

Set forth below is additional discussion of risk factors to the discussion
in the Prospectus with respect to some of the Series that invest primarily in
obligations of issuers from a particular state. Neither MULTI-STATE INSURED nor
NEW YORK INSURED have independently verified this information.

RISK FACTORS FOR THE ARIZONA SERIES. With respect to issuers in the
securities of which the ARIZONA SERIES will invest, Arizona's state constitution
limits the amount of debt payable from general tax revenue that may be
contracted by the State to $350,000. However, certain other issuers have the
power to issue obligations payable from a source of revenue which affect the
whole or large portions of the State. For example, the Transportation Board of
the State of Arizona Department of Transportation may issue obligations for
highways which are paid from revenues generated from, among other sources, state
gasoline taxes. Salt River Project Agricultural & Improvement District, an
agricultural improvement district that operates the Salt River Project (a
Federal reclamation project and an electric system which generates, purchases,
and distributes electric power to residential, commercial, industrial, and
agricultural power users in a 2,900 square-mile service area around Phoenix),
may issue obligations payable from a number of sources.

Arizona's state constitution also restricts the debt payable from general
tax revenues of certain of the State's political subdivisions and municipal
corporations. No county, city, town, school district, or other municipal
corporation of the State may for any purpose become indebted in any manner in an
amount exceeding six percent of the taxable property in such county, city, town,
school district, or other municipal corporation without the assent of a majority
of the qualified electors thereof voting at an election provided by law to be
held for that purpose; provided, however, that (a) under no circumstances may
any county or school district of the State become indebted in an amount
exceeding fifteen percent (or thirty percent in the case of a unified school
district) of such taxable property and (b) any incorporated city or town of the
State with such assent may be allowed to become indebted up to a twenty percent
additional amount for (i) supplying such city or town water, artificial light,
or sewers, when the works for supplying such water, light, or sewers are or
shall be owned and controlled by the municipality and (ii) the acquisition and
development by the incorporated city or town of land or interests therein for
open space preserves, parks, playgrounds and recreational facilities.
Irrigation, power, electrical, agricultural

<PAGE>

improvement, drainage, flood control and tax levying public improvement
districts are, however, exempt from such restrictions of the constitution.
There are also the restrictions relating to such entities implemented by
statute.

Annual property tax levies for the payment of general obligation bonded
indebtedness of political subdivisions and municipal corporations are unlimited
as to rate or amount (other than for purposes of refunding when there are
certain limits). Other obligations may be issued by such entities, sometimes
without an election, which are payable from, among other sources, project
revenues, special assessments and excise taxes.

Arizona political subdivisions and municipal corporations are subject to
certain other limitations on their ability to assess taxes and levies which
could affect their ability to meet their financial obligations. Subject to
certain exceptions, the maximum amount of property taxes levied by any Arizona
county, city, town or community college district for their operations and
maintenance expenditures cannot exceed the amount levied in a proceeding year by
more than two percent. Certain taxes are specifically exempt from this limit,
including taxes levied for debt service payments.

RISK FACTORS FOR THE CALIFORNIA SERIES. Changes in California
constitutional and other laws during the last several years have restricted the
ability of California taxing entities to increase real property tax revenues and
other tax sources and, through limiting various other taxes, have resulted in a
reduction in the absolute amount, or in the rate of growth, of certain
components of state and local revenues. These actions have raised additional
questions about the ability of California State and municipal issuers to obtain
sufficient revenue to pay their bond obligations. In 1978, California voters
approved an amendment to the California Constitution known as "Proposition 13."
Proposition 13 limits ad valorem taxes on real property and restricts the
ability of taxing entities to increase real property taxes. Legislation passed
subsequent to Proposition 13, however, provided for the redistribution of
California's General Fund surplus to local agencies, the reallocation of
revenues to local agencies and the assumption of certain local obligations by
the State so as to help California municipal issuers to raise revenue to pay
their bond obligations. It is unknown, however, whether additional revenue
redistribution legislation will be enacted in the future and whether, if enacted
such legislation would provide sufficient revenue for such California issuers to
pay their obligations.

The State is also subject to Article XIIIB of the State's Constitution,
which may have an adverse impact on California State and municipal issuers.
Article XIIIB restricts the State from spending certain appropriations in excess
of an appropriations limit imposed for each State and local government entity.
If revenues exceed such appropriations limit, such revenues must be returned to
the taxpayers.

In 1988, Proposition 98 was enacted by the voters of California.
Proposition 98 changed state funding of public education below university level,
primarily by guaranteeing K-12 schools a minimum share of General Fund revenues.
Currently, the Proposition 98 formulas require the allocation of approximately
40% of General Fund revenues to such educational support.

Expenditures exceeded revenues for four of the five fiscal years ending
with 1991-1992. Revenue and expenditures were essentially equal in 1992-1993,
but the original budget for that year projected revenues exceeding expenditures
by $2.6 billion. By June 30, 1993, according to the Department of Finance, the
State's Reserves for Economic Uncertainties had a deficit, on a budget basis, of
approximately $2.8 billion. The 1993-94 Budget Act planned to retire the
accumulated $2.8 billion prior year budget

<PAGE>

deficit by December 31, 1994. Although the full amount of this accumulated
deficit was not eliminated by December 31, 1994, as a result of an operating
surplus of $836 million in the 1993-94 fiscal year, the State's accumulated
deficit was reduced to $1.2 billion at June 30, 1994. In July, 1994,
California's lawmakers adopted a two-year plan to eliminate the accumulated
budget deficit. The occurrence of several events are critical to accomplishing
the elimination of the accumulated deficit by 1996. These include: (1) the
assumption by the federal government of $3.6 billion in funding for immigration
costs in fiscal year 1995-96, (2) the federal approval of county claims for
Medicaid administrative and case-management funds. The budget plan counts on
$400 million from these claims to offset State Medi-Cal costs over the next two
years and (3) the overturning or modification of four trial court decisions
which pose potential risks totalling $4.2 billion. The federal government has
only committed to $300 million of the $3.6 billion in immigration costs and has
expressed serious concerns over the Medicaid claims. There is no assurance that
any of these assumed events will occur or that the accumulated deficit will be
eliminated or even reduced within the contemplated timeframe.

In January, 1995, the Governor submitted a proposed budget for 1995-96
which projects General Fund revenues and transfers of $42.5 billion, about $1.2
billion above the 1994-95 projected revenues, and which projects expenditures of
$41.7 billion, an increase of $3.7 billion from 1994-95 projected expenditures.

Local agency and municipal revenues are often highly dependent upon the
level of state appropriations. Accordingly, constraints at the state level tend
to result in revenue reductions at the local level. Thus, the substantial
fiscal pressures that are currently being experienced on the state level, and
which are expected to continue into subsequent years, are expected to be
mirrored at the local level.

The rights of owners of California governmental securities are subject to
the limitations on legal remedies against the governmental entity issuing such
securities, including a limitation on enforcement of judgments against funds
needed to service the public welfare and interest, and in some instances a
limitation on the enforcement of judgments against the entity's funds of a
fiscal year other than the fiscal year in which the payments were due.

In addition, should OCTA and/or SOCPA not make debt service payments when
due, enforceability of either's obligations may become subject to the Federal
Bankruptcy Code and applicable bankruptcy, insolvency, reorganization,
moratorium, or similar laws relating to or affecting the enforcement of
creditors' rights generally, now or hereafter in effect; equity principals which
may limit the specific enforcement under State law of certain remedies; the
exercise by the United States of America of the powers delegated to it by the
Constitution; and the reasonable and necessary exercise, in certain exceptional
situations, of the police powers inherent in the sovereignty of the State of its
governmental bodies in the interest of serving a significant and legitimate
public purpose. Bankruptcy proceedings, or the exercise of powers by the
federal or state governments, if initiated, could subject the owners of the
securities of any governmental entity to judicial discretion and interpretation
of their rights in bankruptcy or otherwise, and consequently may entail risks of
delay, limitation, or modification of their rights.

RISK FACTORS FOR THE COLORADO SERIES. The COLORADO SERIES will concentrate
its investments in debt obligations of the State of Colorado and its local
government entities (the "Colorado Obligations"). The information contained
herein is not intended to be a complete discussion of all relevant risk factors,
and there may be other factors not discussed herein that may adversely affect
the value of and the payment of interest and principal on the Colorado
Obligations.

<PAGE>

Colorado's economy began to improve in the late 1980's, recovering from a
recession largely caused by contractions in the energy, high technology and
construction industries. The recovery has been fueled, in part, by large public
construction projects, net in-migration, a healthy tourist economy, and
increases in the wholesale and retail trade sector and the general services
sector. Momentum is sufficient that the Office of State Planning and Budgeting
has pronounced Colorado "poised for a long-run expansion much like the national
expansion in the 1980s", even though most of the large public works projects are
nearly completed, net migration is slowing as the national economy improves, and
tourism was troubled in 1994 after the voters failed in 1993 to approve an
extension of the statewide tourism tax.

Employment in the service and trade industries represents approximately 53%
of the State's nonagricultural wage and salary jobs, and government employment
represents approximately 18%. Manufacturing represents only 11% and, while
total jobs in the sector is increasing, manufacturing is slowly falling as a
percentage of total employment, due in part to a concentration in defense-
related production. Colorado's unemployment rate was 3.1% in February 1995, a
17-year low and below the national rate of 5.4%. Colorado added 250,000 jobs in
the 2 years ended February 1995, to an all time high of 2,000,000.

There are approximately 2,000 units of local government in Colorado,
including counties, statutory cities and towns, home-rule cities and counties,
school districts and a variety of water, sewer and other special districts, all
with various constitutional and statutory authority to levy taxes and incur
indebtedness. The major sources of revenue for payment of indebtedness are the
ad valorem property tax, which presently is imposed and collected solely at the
local level, sales and use taxes (for cities and counties) and revenue from
special projects. Residential real property will be assessed at 10.25% of its
actual value for 1996 ad valorem taxes. All other property is assessed at 29%
of its actual value except producing mines and oil and gas properties. Oil and
gas properties are assessed at 87.5%. In 1993, the last year for which such
information is currently available, the assessed valuation of all real and
personal property in Colorado was $28,890,934,470, an increase of 1.4% from 1992
levels. In 1992 and 1993, $2,407,175,164 and $2,421,775,987, respectively, were
collected in property taxes throughout Colorado.

RISK FACTORS FOR THE CONNECTICUT SERIES. Connecticut has been
traditionally defined as primarily a manufacturing and industrial state. While
manufacturing remains a dominant factor in the State's economy, other sectors,
particularly finance, insurance and real estate, trade (wholesale and retail)
and services, have expanded to provide diversification tending to somewhat
dilute the influence of manufacturing. Currently, manufacturing provides
approximately 18.9% of employment.

Defense-related business (approximately 9% of real gross product) plays an
important but diminishing role in the Connecticut economy and economic activity
has been affected by the volume of defense contracts awarded to Connecticut
firms. Defense awards to Connecticut have traditionally been among the highest
in the nation, ranking from sixth to twelfth among all states in total contract
awards, receiving 2.5% of all contracts in 1993. The contracts awarded to
Connecticut totaled $2.89 billion for the fiscal year ending June 30, 1993.
This figure was down 6.6% from the previous fiscal year, due largely to the
reduction in the federal government defense related spending. The overall
effect of future reductions in the level of federal defense spending on the
economy suggests that the defense sector is not as promising as it once was.

In recent years, a variety of factors, including the difficulties of the
banking and insurance industries in New England (which resulted in the
tightening of credit), shrinking defense employment and

<PAGE>

the softening of the real estate and construction markets, have impeded the
growth of the Connecticut economy which has, however, begun a modest recovery
over the past two years. Connecticut housing starts, for example, have
increased for the third consecutive year over the prior year's housing starts.
Housing starts increased by 1.3% for the fiscal year ended June 30, 1994; by
2.3% for the fiscal year ended June 30, 1993; and by 28.4% for the fiscal year
ended June 30, 1992, primarily as a result of lower mortgage interest rates.

The annual average unemployment rate (seasonally adjusted) in Connecticut
decreased to 5.7% in the fiscal year ended June 30, 1994 from 7.1% in the fiscal
year ended June 30, 1993. This decrease in unemployment resulted primarily from
an increase in non-manufacturing employment which is expected to continue as the
economy expands. However, continued improvement may be jeopardized due to the
expected contraction of defense manufacturing employment and restructuring in
the insurance and banking industries. The State unemployment rate for February
1995 was reported at 5.4% (seasonally adjusted), which was up slightly from 5.3%
in January 1995.

Fiscal year 1994 ended with a General Fund surplus for the second
consecutive year. This was the result of strong revenue growth, particularly
taxes. The State Comptroller reported a deficit from the State's General Fund
operations of approximately $808.5 million for the State's fiscal year ended
June 30, 1991 (which, together with the carryover from 1990, resulted in
approximately $966 million being carried over into fiscal year 1992); a deficit
of $77 million for the fiscal year ended June 30, 1992, (excluding proceeds
received from deficit financing); a surplus of $93 million for the fiscal year
ended June 30, 1993; and a surplus of $169.3 million for the fiscal year ended
June 30, 1994. $149.6 million of the 1994 surplus was appropriated to the
Treasurer for debt service payments on the Economic Recovery Notes for the
fiscal year ending June 30, 1995. Any excess surplus will be deemed
appropriated for debt service for the fiscal year ending June 30, 1995.

On April 1, 1995, the State Comptroller's office reported that it was
projected that the General Fund operations would show a deficit of $129.1
million for the 1995 fiscal year. The Governor's recommended budget for the
upcoming biennium includes a plan to substantially reduce this deficit primarily
through legislative action to reinstate and modify certain taxes. The General
Assembly has not yet adopted the Governor's plan and the Governor is currently
exploring alternative deficit-reducing actions including potential legislative
changes.

Historically, deficits have been funded by appropriations from a Budget
Reserve Fund comprised of unappropriated budget surpluses from previous fiscal
years. In the 1992 fiscal year to help fund the cumulative General Fund deficit
of approximately $1.2 billion, the State issued $966 million in long-term debt
obligations and approximately $25 million in the 1993 fiscal year. Payments of
principal and interest on Economic Recovery Fund Notes are projected to be paid
from tax revenues transferred from the State's General Fund to the Economic
Recovery Fund, a fund specifically established for the purpose of retiring the
deficit notes. For the fiscal year ended June 30, 1994, $149.6 million was
transferred from the General Fund to the Economic Recovery Fund for this
purpose. The issuance of these deficit notes has the potential to impact the
State's bond ratings and increase the State's interest cost on all borrowings.
In addition, deficit notes may reduce the State's flexibility in future budgets
due to the higher fixed costs for debt service.

In addition to the General Fund, the State also operates several Special
Revenue Funds which are often used as a means of earmarking or reserving certain
revenues to finance particular

<PAGE>

activities. These include, among others, the Transportation Fund, the Grant and
Loan Programs Fund and the Housing Programs Fund. These Special Revenue Funds
are generally funded by each fund's operating revenues. According to the State
Comptroller, the Special Revenue Funds incurred an aggregate net operating
deficit of $416 million in the fiscal year ending June 30, 1994 (excluding
proceeds received from debt financing) which is an increase from $353 million
incurred in the fiscal year ending June 30, 1993. This deficit was incurred
primarily by the Grant and Loan Programs Fund ($306 million operating deficit)
and the Housing Programs Fund ($54 million operating deficit) and was financed
by bond proceeds.

The three major sources of revenue for the State are the personal income
tax, the sales and use taxes and the corporation business tax. According to the
State Comptroller, the imposition of the personal income tax, effective for
years commencing on or after January 1, 1991, raised approximately $2.5 million
in revenues in each of fiscal years 1993 and 1994.

The authorization and issuance of State and municipal debt, including the
purpose, amount and nature thereof, the method and manner of the incurrence of
such debt, the maturity and terms of repayment thereof, and other related
matters are governed by statute, and, pursuant to various public acts or special
bond acts, the State has authorized and issued bonds for a variety of projects
and purposes. The State has no constitutional or other limit on its power to
issue obligations or incur indebtedness other than that it may only borrow for
public purposes. Section 3-21 of the Connecticut General Statutes does,
however, provide that no indebtedness for borrowed money payable from the
General Fund tax receipts of the State shall be authorized by the General
Assembly except such as shall not cause the aggregate amount of such
indebtedness (with certain exclusions) to exceed 1.6 times the total estimated
General Fund tax receipts of the State during the fiscal year in which any such
authorization will become effective.

In each of fiscal years 1993 and 1994 the State issued approximately $1
billion in long term general obligation bonds. Debt service as a percent of
governmental expenditures for the fiscal year ended June 30, 1994 remained
unchanged from the prior fiscal year at 7.3% and has increased from 5.4% form
the fiscal year ended June 30, 1990. Public debt per capita increased to $2,271
for the fiscal year ended June 30, 1994 from $2,122 for the fiscal year ended
June 30, 1993 and is currently 47% more than the fiscal year ended June 30,
1990. As of March 31, 1995, State general obligation bonds were rated Aa, AA-,
and AA by Moody's, Standard and Poor's, and Fitch Investors Service,
respectively. The Standard and Poor's rating has been reduced from AA since
fiscal year 1991, due to the State's continuing budget problems. The Fitch
Investors Service rating was reduced from AA+ on March 17, 1995 due to a weak
recovery from the recession compounded by continuing defense industry cutbacks
and downsizing and mergers in the high profile insurance and financial sectors.
As of March 31, 1995, transportation-related special tax obligation bonds were
rated A1, AA- and AA- by Moody's, Standard and Poors and Fitch Investors
Service, respectively.

In general, the State has borrowed money through the issuance of general
obligation bonds for the payment of which the full faith and credit of the State
are pledged. However, the State also has the power to authorize and has
authorized and issued revenue bonds payable solely or in the first instance from
project revenues and/or supported by a pledge of certain taxes. For example,
the State adopted legislation that provides for the issuance of the
transportation-related special tax obligation bonds, the proceeds of which are
to be used to pay for improvements to the State's transportation system. The
bonds are payable solely from motor vehicle, motor fuel and other
transportation-related taxes and fees, charges

<PAGE>

and other receipts pledged therefor and deposited in the Special Transportation
Fund. The amount of revenues for any such project is dependent on the
occurrence of future events and may thus differ materially from projected
amounts.

In addition, the State has established various statewide authorities and
two regional water authorities, one of which has since become independent, to
finance revenue producing projects. Five of such statewide authorities have the
power to incur, under certain circumstances, indebtedness for which the State
has contingent or, in limited cases, direct liability. In addition, recent
State statutes have been enacted with respect to certain bonds issued by the
City of Bridgeport for which the State has contingent liability and by the City
of West Haven for which the State has direct guarantee liability. From time to
time, pursuant to public or special acts, the State has created or authorized
the creation of other authorities with power to incur indebtedness and to
finance projects, such as a statewide health and educational facilities
authority. Indebtedness of such authorities does not constitute a liability or
debt of the State.

RISK FACTORS FOR THE FLORIDA SERIES. Municipal instruments of Florida
issuers may be adversely affected by political, economic and legal conditions
and developments within the state of Florida. In addition, the Florida
constitution and statutes mandate a balanced budget as a whole, and require each
of the separate funds (General Revenue Fund, Trust Funds and Working Capital
Fund) within the budget to be kept in balance from currently available revenues
each State fiscal year (July 1 - June 30). The balanced budget requirement
necessitates a continuous evaluation of receipts and expenditures and makes
Florida vulnerable to a sharp unexpected decrease in revenues.

The state of Florida is not authorized by law to issue obligations to fund
governmental operations; but is authorized to issue bonds pledging its full
faith and credit to finance or refinance the cost of state fixed capital outlay
projects upon approval by a vote of the electors. However, Florida may issue
revenue bonds without a vote to finance or refinance the cost of state fixed
capital outlay projects which are payable solely from funds other than state tax
revenues. Municipal instruments issued by cities, counties and other
governmental authorities are payable either from their general revenues
(including ad valorem and other taxes) within their jurisdiction or revenues
from the underlying project. Revenue obligations issued by such governmental
bodies and other entities are customarily payable only from revenues from the
particular project or projects involved. The limitations on the state of
Florida and its governmental agencies and Florida local governmental agencies
may inhibit the ability of such issuers to repay existing municipal indebtedness
and otherwise may affect their credit standing. In addition, the ability of
such issuers to repay revenue bonds will be dependent on the success of the
particular project to which such bonds relate.

The state of Florida has grown dramatically. In 1950, Florida was the
twentieth most populous state with a population of 2.8 million. In 1980,
Florida was the seventh most populous state with a population of 9.7 million.
As of April 1, 1994, Florida's population was approximately 13.9 million,
ranking Florida as the fourth most populous state nationally and the most
populous of the southeastern states. Florida continues to be the fastest
growing of the 11 largest states.

Florida's growth is partially caused by the number of retirees moving to
take advantage of the favorable climate. In-migration has historically been a
major driving force of Florida's economy. However, nationally, the growth in
the number of young adults and retirees, the two groups most likely to move to
Florida, is expected to decline significantly, as a result of changes in the
overall age structure of the U.S. population. Demographers expect Florida
population growth in the 1990s to be significantly

<PAGE>

below the level of the 1980s. Since 1983, the State's average annual rate of
population increase has been approximately 2.5%, as compared to an approximately
1.0% average annual increase for the nation as a whole. The State's annual
population growth is expected to hover close to the 250,000 range throughout the
1990s.

Florida's population growth is one reason Florida's economy has generally
performed better than the nation as a whole. However, continued population
growth is no assurance of a strong economy. In addition, despite projections
for slower overall population growth, an acceleration in the growth rate of
Florida's school age population and over-80 population is expected, increasing
the demands for government services particularly in the education and health
care areas.

While Florida is a leading site for retirement, it is also attracting a
significant number of working age people. For instance, since 1982, the prime
working age population (18-44) has grown at an average annual rate of
approximately 3.3%. The share of Florida's total working age population (18-59)
to total state population is approximately 54% and is not expected to change
appreciably through the year 2000.

Because Florida has a proportionally greater retirement age population,
property income and transfer payments are a relatively more important source of
income than in the nation and the southeast. Property income (including
dividends, interest and rent), and transfer payments (including social security
and pension benefits) are typically less sensitive to national business cycles
than employment income and therefore, have traditionally acted as a stabilizing
force within Florida's economy. Florida's retirement age population, living in
part on interest income, will be adversely affected by any drops in interest
rates. Efforts at both the state and federal level are underway to reduce
health care expenditures and Florida relies more than most other states on
federal Medicare and Medicaid dollars targeted to the elderly. In addition,
cuts in entitlements such as Social Security could have an adverse impact on
Florida's economy. Feared entitlement cuts themselves have the effect of
reducing the consumer confidence of Florida's elderly population.

The service sector has become Florida's largest employer. Florida is
predominantly a service-oriented state, in the bottom fifth of states in per
capita value added to the economy by manufacturing. In contrast, the southeast
and the nation have a greater proportion of manufacturing jobs which tend to pay
higher wages. Recent consolidations, restructurings and failures in the service
sector have adversely affected the Florida economy. In addition, manufacturing
jobs in Florida differ substantially from those available nationwide and in the
southeast, which are more concentrated in areas such as heavy equipment, primary
metals, chemicals and textile mill products. Florida has a concentration of
manufacturing jobs in high-tech and high value-added sectors, such as electrical
and electronic equipment, as well as printing and publishing. These kinds of
manufacturing jobs tend to be less cyclical than other forms of manufacturing
employment. From 1980 to 1994, the total number of manufacturing jobs in
Florida has increased by over 27,000, compared to a significant decline in
national manufacturing employment. However, defense cutbacks and a diminished
space program will make it difficult to expand or even maintain Florida's
existing small high-tech manufacturing base.

In the area of international trade, Florida is considered well positioned
to take advantage of strong economic growth in Latin America. Florida's exports
to its top five Latin American markets (Brazil, Columbia, Argentina, Venezuela
and Dominican Republic) reached a record 10 billion in 1994.

<PAGE>

In 1994, Florida's job base grew by about 225,000 or 4%, however,
approximately 25% of the new jobs were temporary positions. It is estimated
that 80% of Florida's job growth will continue to be in services, retail and
government. The average unemployment rate in Florida since 1980 has been
approximately 6.5%, while the national average is 7.1%.

Florida's dependency on the highly cyclical construction and construction
related manufacturing sectors has declined substantially and is expected to
continue declining as Florida's economy continues to diversify. Nevertheless,
Florida's construction industry has remained highly significant. Traditionally,
Florida's rapid growth in population has been a driving force behind Florida's
construction industry. However, factors such as Federal tax reform, the
availability and cost of financing, overdevelopment, impact and other
development fees and Florida's growth management legislation and comprehensive
planning requirements may continue to adversely affect construction activity.
The reduction in construction activity has been a major factor in Florida's
unemployment rate. However, after falling by more than 14% in 1991 and 4.3% in
1992, the volume of new construction grew by an estimated 7.9% in 1993 and 4.3%
in 1994. Strong single family housing starts and multi-family construction were
still, however, significantly below the peak during the 1980s. A significant
recovery in construction will likely continue to be restrained by the legacy of
overbuilding from the 1980s and reduced access to credit as financial
institutions remain cautious of real estate loans. Lower interest rates will
tend to stimulate construction while increased rates, while benefitting retirees
living on interest income, will diminish construction activity.

Tourism is one of Florida's most important industries. Approximately 39.9
million domestic and international tourists visited Florida in 1994. Crimes and
violence against tourists have been publicized in the national and international
media and have adversely affected tourism in Florida. Due to these and other
factors, there was a 2.7% decrease in the number of tourists visiting Florida
from 1993 to 1994. During the first eleven months of 1994, taxable sales
attributable to tourists was estimated at $29.9 billion, a 3% increase over the
same period in 1993. Florida's tourist industry has, over the years, become
more sophisticated and less seasonal, attracting visitors year-round. The
addition of a variety of amusement and educational theme parks has helped to
reduce the seasonal and cyclical character of the industry and has stabilized
tourist-related employment. The outlook for tourism in Florida through the year
2000 remains good. By the turn of the century, approximately 48 million
domestic and international tourists are expected to visit Florida annually.
However, a national economic downturn or an increase in gasoline or other
transportation costs would depress tourism as consumers cut back on items such
as vacations. Further adverse publicity regarding Florida's crime rate,
particularly violent crimes against tourists, will also be detrimental to
Florida's tourist industry. Competition from other destinations, as well as the
dollar's rise against other major currencies, would also adversely impact the
tourist industry.

In fiscal year 1993-1994, Florida derived approximately $16.4 billion or
50% of its total revenues of approximately $33.2 billion from state taxes.
Federal grants and other special revenues account for the remaining revenues.
The greatest single source of tax receipts in Florida is the sales and use tax,
which accounted for approximately $12.7 billion of revenue in the 1993-1994
fiscal year. The State's dependence on sales taxes keeps the state susceptible
to economic downturns which could cause a reduction in sales tax collections.

Florida depends more on sales taxes than most other states. This reliance
has increased over time primarily because of a constitutional prohibition of a
personal income tax and the reservation of ad valorem property taxes to local
governments. Counties, school districts and municipalities are authorized

<PAGE>

by law, and special districts may be authorized by law, to levy ad valorem
taxes. The State does not levy ad valorem taxes on real property or tangible
personal property. Certain properties used for educational, literary,
scientific, governmental, religious or charitable purposes, as well as
inventory, household goods and personal effects are exempt from such tax.

Slightly less than 10% of the sales tax is designated for local governments
and is distributed to the counties in which collected for local use by such
counties and their municipalities. In addition, local governments have limited
authority to assess discretionary local sales surtaxes within their counties.

The second largest source of state tax receipts is the tax on motor fuels.
Collections from this source in the state's fiscal year ending June 30, 1992,
were approximately $1.2 billion. In addition to the state taxes on motor fuel,
Florida's counties may levy local option motor fuel taxes.

The rebuilding effort following Hurricane Andrew has had a significant
impact on Florida's economy, including a large positive impact on sales tax
collections. The inflow of federal disaster funds and insurance payments
provided a boost to the State's overall employment figures and a jump in retail
sales in southeast Florida, especially Dade and Broward Counties. In addition,
there has been an increase in construction jobs as workers were added for the
rebuilding process. This stimulus is, however, temporary in nature.

Due to its involvement in a wide range of activities and the complexity of
its system of taxation, Florida is a party to various legal actions. The
outcomes of some of these actions could significantly reduce Florida's ability
to collect taxes, force Florida to refund taxes already collected, require the
State to pay damage awards, or result in the loss of valuable state property.
Furthermore, past and pending litigation, to which Florida is not a party, may
create precedents which may effectively result in future costs or revenue
losses. In addition, the issuers may be involved in a variety of litigation
which could have a significant adverse impact on their financial standing.

Florida's local governments operate in a restrictive legal and political
fiscal environment. They are faced with state imposed revenue raising and
revenue expenditure constraints, fast paced population growth, and citizen's
expectations for expanded services without higher property taxes. The Florida
Constitution preempts to the state all revenue sources not specifically provided
by law, except for the ad valorem property tax. It also limits levies of local
governments to 10 mills ($10 per thousand dollars of taxable assessed
valuation). A constitutionally mandated homestead tax exemption ($25,000) also
has eroded the tax base of many less populated counties. In addition, a recent
constitutional amendment limits the ability of local governments to increase the
assessed valuation of homestead property, which, together with the 10 mill
limitation, could have a substantial adverse affect on local governments in the
future. The state also requires that agricultural property be assessed
according to its value in current use rather than its fair market value.
Florida's local governments cannot impose a personal income or payroll tax.

In 1985 Florida passed the Local Government Comprehensive Planning and Land
Development Regulation Act, which is commonly referred to as the Growth
Management Act. The Growth Management Act requires local governments to prepare
growth plans for approval by the state. These growth plans must insure that new
development will not be permitted unless adequate infrastructure such as roads,
sewer, water and parks are available concurrently with the development. Known
as "concurrency," this requirement has put heavy economic and political pressure
on local governments. In addition, the Growth Management Act has spawned
litigation involving local governments, which itself

<PAGE>

consumes resources, and in which an adverse outcome can adversely affect the
local governments involved.

In November, 1994, the voters of Florida approved the State legislature's
joint resolution to amend the Florida Constitution. This amendment limits the
amount of taxes, fees, licenses and charges imposed by the legislature and
collected during any fiscal year to the amount of revenues allowed for the prior
fiscal year, plus an adjustment for growth. Growth is defined as the amount
equal to the average annual rate of growth in Florida personal income over the
most recent twenty quarters times the State revenues allowed for the prior
fiscal year. The revenues allowed for any fiscal year can be increased by a
two-thirds vote of the State legislature. This limit is effective starting with
fiscal year 1995-1996. Any excess revenues generated must be put into the
budget stabilization fund until it is fully funded and then refunded to
taxpayers. Included among the categories of revenues which are exempt from the
revenue limitation, however, are revenues pledged to State bonds.

The value of Florida municipal instruments may also be affected by general
conditions in the money markets or the municipal bond markets, the levels of
Federal income tax rates, the supply of tax-exempt bonds, the size of offerings,
maturity of the obligations, the credit quality and rating of the issues and
perceptions with respect to the level of interest rates.

General obligation bonds issued by the state of Florida have consistently
been rated Aa and AA by Moody's and S&P, respectively. There is no assurance
that such ratings will be maintained for any given period of time or that they
may not be lowered, suspended or withdrawn entirely by such rating agencies, or
either of them if circumstances warrant. Any such downward change in,
suspension of, or withdrawal of such ratings, may have an adverse affect on the
market price of Florida municipal instruments. Moreover, the rating of a
particular series of revenue bonds or municipal obligations relates primarily to
the project, facility, governmental entity or other revenue source which will
fund repayment.

Florida's rapid growth is straining resources but has also permitted the
expansion of local governments and creates greater economic depth and diversity.
While infrastructure developments have lagged behind population growth, it is
expected that more infrastructure projects will be created, thereby increasing
Florida's governmental indebtedness and the issuance of additional municipal
instruments.

While the bond ratings and some of the information presented above indicate
that Florida is in satisfactory economic health, there can be no assurance that
there will not be a decline in economic conditions or that particular municipal
instruments in the portfolio of the FLORIDA SERIES will not be adversely
affected by any changes in the economy. In addition, the economic condition in
Florida as a whole is only one factor affecting individual municipal
instruments, which are subject to the influence of a multitude of local
political, economic and legal conditions and developments. The economic
information summarized above is based on publicly available sources and is
believed to be accurate.

RISK FACTORS FOR THE GEORGIA SERIES. The GEORGIA SERIES will concentrate
its investments in debt obligations of the State of Georgia and guaranteed
revenue debt of its instrumentalities (the "Georgia Obligations"). The
information contained herein is not intended to be a complete discussion of all
relevant risk factors, and there may be other factors not discussed herein that
may adversely affect the value of the payment of interest and principal on the
Georgia Obligations.

<PAGE>

The Georgia Obligations may be adversely affected by economic and political
conditions and developments within the State of Georgia. For Fiscal Year 1995,
the Georgia General Assembly authorized the issuance of $377,335,000 in new
long-term debt. As of June 30, 1994 (the end of Fiscal Year 1994), Georgia's
total outstanding debt was $3,670,250,000 for general obligation bonds.
Interest payments to be made on this debt through maturity totals
$1,863,758,718.75. The State of Georgia general obligation debt carries a AAA
rating by Moody's and Fitch Investors Service and AA+ by S&P.

Georgia's revenue collections from taxes and fees for Fiscal Year 1994
amounted to $8,444,864,060, a 7.9% increase from 1993. Additional revenues of
approximately $139,000,000 was derived from Indigent Care Trust Funds and
approximately $400,000,000 from lottery proceeds. The revenue total for Fiscal
Year 1995 is projected to be $9,300,000,000, an increase of 6.7% from Fiscal
Year 1994 appropriations. Additionally, Georgia has completely filled its
shortfall reserve account up to the legal limit of $267,000,000 which is its
highest level ever.

The State of Georgia derives approximately 81% of its revenues from sales
and personal income taxes. Revenues from all taxes and fees increased 7.8% for
Fiscal Year 1995, reflecting a greater increase than Fiscal Year 1994 where the
growth over Fiscal Year 1993 was only 5.6%. Actual revenues for the State of
Georgia have increased in each of the last five years. This improvement is
expected to continue for most economic sectors as the 1996 Summer Olympic Games
approach.

It is estimated that between visitor and Olympic committees' spending for
the Summer Olympic Games, to be held in Atlanta, Georgia in 1996, 5.1 billion
dollars will be generated, of which $1,824,825,761 will be funnelled into
Georgia's economy. Hosting the Games should increase Georgia Department of
Revenue collections by 199 million dollars. Total full- and part-time
employment generated from the Games is estimated at 80,443 jobs, with the
projected average annualized earnings for each newly created job to be $22,685.

According to the Department of Labor for the State of Georgia, unemployment
decreased to 5.1% in 1994 as compared to 5.8% in 1993 and 6.9% in 1992. The
average unemployment rate for March 1994 through February of 1995 (the most
current twelve-month period for which there are statistics) was 5.0%, which
would tie with 1991 for the lowest unemployment rate of the past twenty years.
On a national level, the United States estimated unemployment rate for 1994 was
6.4%, placing Georgia well below the national average unemployment rate.
Georgia's low unemployment rate can partially be attributed to Georgia's
diversified economy.

The Georgia average civilian labor force increased from 3,467,000 in 1993
to 3,566,000 for 1994. The projections for the Georgia labor force by the year
2005 vary from 4,078,250 to 4,400,000. The annual employment growth rate from
1990 to 2005 is expected to be approximately 1.5 percent, with total employment
projected to increase approximately 25% and an estimated 814,000 new jobs to be
created by 2005. Fifty-four percent of those jobs will be in the service
industry and twenty-five percent will be in wholesale and retail trade. Only
three other states are producing jobs at a greater rate than Georgia. In
addition, the outlook for Fiscal year 1995 is that personal income (adjusted for
inflation) will increase by 4.1% as compared to the United States as a whole
where the increase will be only 3.1%. The most income growth will be in
services, construction, agriculture and wholesale and retail trade.
Manufacturing will experience moderate income increases with finance, insurance,
real estate, transportation, communications, public utilities, mining and
government having a slow growth.

<PAGE>

Last year the Georgia General Assembly passed H.B. 1527, the Georgia
Business Expansion Support Act of 1994 (the "Act"). This Act supports
businesses in Georgia by expanding he kind of tax credits that businesses will
be allowed. The Act also exempts the sale of electricity, machinery an primary
material handling equipment used directly in the manufacture of tangible
personal property. Georgia's income tax law is also affected by the Act as it
expands the availability of the job tax credit to all of Georgia's counties,
creates investment tax credits for manufacturers and provides credits to
employers who pay for the retraining of or who finance child care for its
employees.

The Georgia General Assembly also amended section 48-7-26 of the Georgia
Code by passing H.B. 596. This amendment will reduce individual taxable income
by increasing the dependent personal exemption (and correspondingly revising the
withholding rates) and increasing the allowable retirement income exclusion.
There will be one increase for tax year 1994 and a further increase for 1995.

In 1990, the U.S. Census Board ranked Georgia eighth in terms of population
growth as a percentage and fourth in terms of numeric growth. It is the fastest
growing state east of the Rocky Mountains. Overall, Georgia is the eleventh
most populous state. During the period of 1980 to 1990 the population in the
state of Georgia increased by 18.58% and population growth has averaged 2% per
year since the 1990 census. The total population was 6,917,000 in 1993 and was
estimated at 7,055,336 in 1994. It is projected that Georgia's population will
increase to 7.7 million by the year 2000 and further grow to 8.66 million by the
year 2010.

RISK FACTORS FOR THE MARYLAND SERIES. Some of the significant financial
considerations relating to the investments of the MARYLAND SERIES are summarized
below. This information is derived principally from official statements and
preliminary official statements released on or before March 8, 1995, relating to
issues of Maryland obligations and does not purport to be a complete
description.

The State's total expenditures for the fiscal years ending June 30, 1992,
June 30, 1993 and June 30, 1994 were $11.585 billion, $11.786 billion and
$12.351 billion, respectively. As of March 8, 1995, it was estimated that total
expenditures for fiscal year 1995 would be $13.834 billion. The State's General
Fund, representing approximately 55% - 60% of each year's total budget, had a
surplus on a budgetary basis of $55 thousand in fiscal year 1991, a deficit of
$56 million in fiscal year 1992 and a surplus of $11 million in fiscal year
1993. The Governor of Maryland reduced fiscal year 1993 appropriations by
approximately $56 million to offset the fiscal year 1992 deficit. The State
Constitution mandates a balanced budget.

In April 1994, the General Assembly approved the $13.34 billion 1995 fiscal
year budget. The Budget includes $2.6 billion in aid to local governments
(reflecting a $102.4 million increase in funding over 1994 that provides for
substantial increases in education, health and police aid), and $104.8 million
in general fund deficiency appropriations for fiscal year 1994, of which $60.5
million is a legislatively mandated appropriation to the Revenue Stabilization
Account of the State Reserve Fund. The Revenue Stabilization Account was
established in 1986 to retain State revenues for future needs and to reduce the
need for future tax increases. The 1995 Budget does not include any proposed
expenditures dependent on additional revenue from new or broad-based taxes.
When the 1995 Budget was enacted, it was estimated that the general fund surplus
on a budgetary basis at June 30, 1995, would be approximately $9.7 million; as
of October 5, 1994 that surplus estimation had risen to $76.9 million.

<PAGE>

In January of 1995 the Governor submitted his proposed fiscal year 1996
Budget to the General Assembly. The Budget includes $2.8 billion in aid to
local governments (reflecting a $161 million increase over 1995 that provides
for substantial increases in education, health and police aid), and $142.1
million in general fund deficiency appropriations for fiscal year 1995, of which
$60 million in an appropriation to the Revenue Stabilization Account of the
State Reserve Fund. It is estimated that the general fund surplus on a
budgetary basis at June 30, 1996 will be approximately $176.8 thousand. In
addition, it is estimated that the balance in the Revenue Stabilization Account
of the State Reserve Fund at June 30, 1996 will be $511.7 million.

The public indebtedness of Maryland and its instrumentalities is divided
into three basic types. The State issues general obligation bonds for capital
improvements and for various State-sponsored projects. The Department of
Transportation of Maryland issues limited, special obligation bonds for
transportation purposes payable primarily from specific, fixed-rate excise taxes
and other revenues related mainly to highway use. Certain authorities issue
obligations payable solely from specific non-tax enterprise fund revenues and
for which the State has no liability and has given no moral obligation
assurance.

According to recent available ratings, general obligation bonds of the
State of Maryland are rated "Aaa" by Moody's and "AAA" by S&P, as are those of
the largest county of the State, i.e., Montgomery County in the suburbs of
Washington, D.C. General obligation bonds of Baltimore County, a separate
political entity surrounding Baltimore City and the third largest county in the
State, are rated "Aaa" by Moody's and "AA+" by S&P. General obligation bonds of
Prince George's County, the second largest county, which is also in the suburbs
of Washington, D.C., are rated "Aa" by Moody's and "AA-" by S&P. The general
obligation bonds of those other counties of the State that are rated by Moody's
carry an "A" rating or better except for those of Allegheny County, which are
rated "Baa". The general obligation bonds of Baltimore City, one of the most
populous municipalities in Maryland, are rated "A1" by Moody's and "A" by S&P.
The Washington Suburban Sanitary District, a bi-county agency providing water
and sewerage services in Montgomery and Prince George's Counties, issues general
obligation bonds rated "A" by Moody's and "AA" by S&P. Most Maryland Health and
Higher Education Authority and State Department of Transportation revenue bonds
issues have received an "A" rating or better from Moody's. See Appendix A for a
description of municipal bond ratings.

While the ratings and other factors mentioned above indicate that Maryland
and its principal subdivisions and agencies are overall in satisfactory economic
health, there can, of course, be no assurance that this will continue or that
particular bond issues may not be adversely affected by changes in state or
local economic or political conditions.

RISK FACTORS FOR THE MASSACHUSETTS SERIES. Some of the significant
financial considerations relating to the investments of the MASSACHUSETTS SERIES
are summarized below. This information is derived principally from official
statements and preliminary official statements released on or before March 20,
1995, relating to issues of Massachusetts obligations and does not purport to be
a complete description.

Annual expenditures by the Commonwealth of Massachusetts for programs and
services provided by state government for fiscal years 1990 and 1991 exceeded
total current year revenues. In order to fund the fiscal 1990 budgetary deficit
(and certain prior year Medicaid reimbursement payments), the legislature
authorized the issuance of up to $1.42 billion of bonds. Retroactive
application of the proceeds of such

<PAGE>

bonds would have resulted in fiscal 1990 positive closing balances of $258.3
million on an adjusted basis. Total expenditures for fiscal 1991 were $13.935
billion and total revenues were $13.913 billion, resulting in a $21.2 million
operating loss. Application of the adjusted fiscal 1990 fund balances of $258.3
million resulted in a final fiscal 1991 budgetary surplus of $237.1 million.
Total expenditures and other uses for fiscal 1992 totalled approximately $13.914
billion and total revenues and other sources totalled approximately $14.226
billion. Overall, the budgeted operating funds ended fiscal 1992 with an excess
of revenues and other sources over expenditures and other uses of $312 million,
and with positive fund balances of approximately $549 million.

Total expenditures and other uses for fiscal 1993 totalled approximately
$15.193 billion and total revenues and other sources totalled approximately
$15.206 billion. Overall, the budgeted operating funds ended fiscal 1993 with
an excess of revenues and other sources over expenditures and other uses of $13
million, and with positive fund balances of approximately $563 million. Total
expenditures and other uses for fiscal 1994 totalled approximately $15.952
billion and total revenues and other sources totalled approximately $15.979
billion, resulting in an excess of revenues and other sources over expenditures
and other uses of $27 million and in positive fund balances of approximately
$589 million.

The fiscal 1995 budget is based on estimated total revenues and other
sources of approximately $16.730 billion. Total expenditures and other uses for
fiscal 1994 are currently estimated at approximately $16.818 billion. The
fiscal 1995 budget proposes that the $88 million difference between estimated
revenues and other sources and expenditures and other uses be provided for by
application of the beginning fund balances for fiscal 1995, to produce estimated
ending fund balances for fiscal 1995 of approximately $501 million. The fiscal
1995 budget is based upon numerous spending and revenue estimates, the
achievement of which cannot be assured.

On January 25, 1995 the Governor submitted his fiscal 1996 budget
recommendations to the legislature which provide for budgeted expenditures of
approximately $16.737 billion. After adjusting for approximately $147.9 million
in higher education revenues and expenditures that the Governor's budget
recommendations propose moving to an off-budget trust fund for fiscal 1996, the
recommended fiscal 1996 spending level is approximately $436 million above the
currently estimated fiscal 1995 budgeted expenditures of $16.449 billion.

In Massachusetts the tax on personal property and real estate is the
principal source of tax revenues available to cities and towns to meet local
costs. "Proposition 2 1/2", an initiative petition adopted by the voters of the
Commonwealth of Massachusetts on November 4, 1980, limits the power of
Massachusetts cities and towns and certain tax-supported districts and public
agencies to raise revenue from property taxes to support their operations,
including the payment of debt service. Proposition 2 1/2 required many cities
and towns to reduce their property tax levies to a stated percentage of the full
and fair cash value of their taxable real estate and personal property and
limited the amount by which the total property taxes assessed might increase
from year to year.

The reductions in local revenues and anticipated reductions in local
personnel and services resulting from Proposition 2 1/2 created strong demand
for substantial increases in Commonwealth funded local aid, which increased
significantly in fiscal years 1982 through 1989. The effect of this increase in
local aid was to shift a major part of the impact of Proposition 2 1/2 to the
Commonwealth. Because of decreased Commonwealth revenues, local aid declined
significantly in fiscal 1990, 1991 and 1992. Local aid increased somewhat in
fiscal 1993 and fiscal 1994 and is expected to increase again in fiscal 1995.

<PAGE>

Limitations on Commonwealth tax revenues have been established by enacted
legislation approved by the Governor on October 25, 1986 and by public approval
of an initiative petition on November 4, 1986. The two measures are
inconsistent in several respects, including the methods of calculating the
limits and the exclusions from the limits. The initiative petition, which took
effect on December 4, 1986, contains no exclusion for debt service on
Commonwealth bonds and notes or for payments on Commonwealth guarantees.
Commonwealth tax revenues in fiscal 1987 exceeded the limit imposed by the
initiative petition resulting in an estimated $29.2 million reduction which was
distributed to taxpayers in the form of a tax credit against calendar year 1987
personal income tax liability pursuant to the provisions of the initiative
petition. Tax revenues since fiscal 1988 have not exceeded the limit set by
either the initiative petition or the legislative enactment.

The Commonwealth maintains financial information on a budgetary basis.
Since fiscal year 1986, the Comptroller also has prepared annual financial
statements in accordance with generally accepted accounting principals (GAAP) as
defined by the Government Accounting Standards Board. GAAP basis financial
statements indicate that the Commonwealth ended fiscal 1990, 1991, 1992, 1993
and 1994 with fund deficits of approximately $1.896 billion, $761.2 million,
$397.4 million, $184.1 million and $72 million, respectively.

RISK FACTORS FOR THE MICHIGAN SERIES. The information set forth below is
derived in part from the official statements prepared in connection with the
issuance of Michigan municipal bonds and similar obligations and other sources
that are generally available to investors. The information is provided as
general information intended to give a recent historical description and is not
intended to indicate future or continuing trends in the financial or other
positions of the State of Michigan (the "State").

The State's Constitution limits the amount of total State revenues raised
from taxes and other sources. State revenues (excluding federal aid and
revenues for payment of principal and interest on general obligation bonds) in
any fiscal year are limited to a specified percentage of State personal income
in the prior calendar year or average of the prior three calendar years,
whichever is greater. The percentage is based upon the ratio of the 1978-79
fiscal year revenues to total 1977 State personal income. If any fiscal year
revenues exceed the revenue limitation by one percent, the entire amount
exceeding the limitation must be rebated in the following fiscal year's personal
income tax or single business tax. Annual excesses of less than one percent may
be transferred into the State's Budget Stabilization Fund. The State may raise
taxes in excess of the limit in emergency situations.

The State Constitution limits the purposes for which State general
obligation debt may be issued. Such debt is limited to short-term debt for
State operation purposes, short and long-term debt for the purpose of making
loans to school districts and long-term debt for voter-approved purposes. The
State's Constitution also directs or restricts the use of certain revenues.

The State finances its operations through the State's General Fund and
special revenue funds. The General Fund receives revenues of the State that are
not specifically required to be included in the special revenue funds. General
Fund revenues are obtained approximately 63 percent from the payment of State
taxes and 37 percent from federal and non-tax revenue sources. The majority of
the revenues from State taxes are from the State's personal income tax, single
business tax, use tax, sales tax and various other taxes. Approximately one-
half of total General Fund expenditures are made by the State's Department of
Education and Department of Social Services. The Department of Education
provides general supervision over all public education in the State, including
general, adult and special education. The Department of

<PAGE>

Social Services administers economic, social and medical programs in the State,
including Medicare, Medicaid and Aid to Families with Dependent Children. Other
significant expenditures from the General Fund provide funds for law
enforcement, general State government, debt service and capital outlays. The
State Constitution requires that any prior year's surplus or deficit in any fund
must be included in the succeeding year's budget for that fund. The State
Constitution also requires that the Governor, with the approval of the
appropriating committees of the State House and Senate, reduce expenditures
whenever it appears that actual revenues will be less than the originally
projected revenues upon which the budget was based.

The State's budget for the 1991-92 fiscal year was balanced by several
measures taken by the Administration and the Legislature during the fiscal year.
The State's budgets for the 1992-93 and 1993-94 fiscal years were balanced
during the fiscal years by a combination of line veto, deficit reduction
compromise package and some increased revenues. Similar administration and
legislative action is anticipated with respect to the 1994-95 fiscal year
budget. The Governor's Executive Budget for fiscal year 1994-95 was submitted
to the Legislature in December 1993. The fiscal year 1994-95 general
fund/general purpose Executive Budget recommendation totaled $7,865.8 million
and presumed the adoption of Proposal A, discussed below. Both the State Senate
and the House of Representatives held committee meetings to discuss, amend and
support appropriations for the State and legislative action on the passage of
appropriations was taken.

Until recently, the State did not and had no authority to levy any ad
valorem taxes on real or tangible personal property. On August 19, 1993, the
Governor signed in law 1993 Public Act 145 ("Act 145"), a measure which would
have significantly impacted financing of primary and secondary school operations
and which has resulted in additional property tax and school finance reform
legislation. Act 145 would have exempted all property in the State of Michigan
from millage levied for local and intermediate school districts operating
purposes, other than millage levied for community colleges, effective July 1,
1994. In order to replace local property tax revenues lost as a result of Act
145, the Michigan Legislature, in December 1993, enacted several statutes which
address property tax and school finance reform. Education reform legislation
not dealing with school finance was also enacted.

The property tax and school finance perform ratio measures included a
ballot proposal ("Proposal A") which was subject to voter approval and in fact
approved on March 15, 1994, and a statutory proposal which would have
automatically taken effect if Proposal A had not been approved. Under Proposal
A as approved, effective May 1, 1994, the State sales and use tax will be
increased from 4% to 6%, the State income tax will be decreased from 4.6% to
4.4%, the cigarette tax will be increased from $.25 to $.75 per pack and an
additional tax of 16% of the wholesale price will be imposed on certain other
tobacco products. A 2% real estate transfer tax will be effective January 1,
1995, which will decrease to 0.75% in April of 1995. Beginning in 1994, a State
property tax of 6 mills is imposed on all real and personal property currently
subject to the general property tax. All local school boards can now, with
voter approval, levy up to the lesser of 18 mills or the number of mills levied
in 1993 for school operating purposes, on non-homestead property. Proposal A
contains additional provisions regarding the ability of local school districts
to levy taxes as well as a limit on assessment increases for each parcel of
property, beginning in 1995 to the lesser of 5% or the rate of inflation. When
property is subsequently sold, its assessed value will revert to the current
assessment level of 50% of true cash value. Under Proposal A, much of the
additional revenue generated by the new taxes will be dedicated to the State
School Aid Fund.

<PAGE>

Proposal A contains a system of financing local school operating costs
which relies upon a foundation allowance amount which may vary by district based
upon historical spending levels. State funding will provide each school
district an amount equal to the difference between its foundation allowance and
the revenues generated by its local property tax levy. Under Proposal A, a
local school district will also be entitled to levy supplemental property taxes
to generate additional revenues if its foundation allowance is less than its
historical per pupil expenditures. Proposal A also contains provisions which
allow for the levy of a limited number of enhancement mills on regional and
local school district bases.

Proposal A shifts significant portions of the cost of local school
operations from local school districts to the State and raises additional State
revenues to fund these additional State expenses. These additional revenues
will be included within the State's constitutional revenue limitations and may
impact the State's ability to raise additional revenues in the future.

The State is a party to various legal proceedings seeking damages or
injunctive or other relief. In addition to routine litigation, certain of these
proceedings could, if unfavorably resolved from the point of view of the State,
substantially affect State programs or finances. These lawsuits involve
programs generally in the areas of corrections, highway maintenance, social
services, tax collection, commerce and budgetary reductions to school districts
and governmental units and court funding.

The principal sectors of Michigan's diversified economy are manufacturing
of durable goods (including automobiles and components and office equipment),
tourism and agriculture. The health of the State's economy, and in particular
its durable goods manufacturing industry, is susceptible to a long-term increase
in the cost of energy and energy related products. As reflected in historical
employment figures, the State's economy has lessened its dependence upon durable
goods manufacturing. In 1960, employment in such industry accounted for 33% of
the State's workforce. This figure fell to 17.3% in 1991. However,
manufacturing (including auto-related manufacturing) continues to be an
important part of the State's economy. The particular industries are highly
cyclical and in the period 1994-95 are expected to operate at somewhat less than
full capacity but at higher levels than in the immediate prior years. This
factor can usually adversely affect the revenue streams of the State and its
political subdivisions because it adversely impacts tax sources, particularly
sales income and single business taxes.

Income per capita in the State exceeds slightly the national average.
Recently, as well as historically, the average monthly unemployment rate in the
State has been higher than the average figures for the United States.

Currently, the State's general obligation bonds are rated "A1" by Moody's
and "AA" by Fitch. On January 23, 1991, S&P placed the State's general
obligation, unenhanced debt on CreditWatch with negative implications for S&P's
"AA" rating on such debt. On July 29, 1991, S&P's removed the State general
obligation, unenhanced debt from such CreditWatch and did not modify its rating
on such debt. To the extent that the portfolio of the MICHIGAN SERIES is
comprised of revenue or general obligations of local governments or authorities,
rather than general obligations of the State of Michigan itself, ratings on such
Michigan obligations will be different from those given to the State of Michigan
and their value may be independently affected by economic matters not directly
impacting the State.

RISK FACTORS FOR THE MINNESOTA SERIES. The information set forth below is
derived from official statements prepared in connection with the issuance of
obligations of the State of Minnesota and other

<PAGE>

sources that are generally available to investors. The information is provided
as general information intended to give a recent historical description and is
not intended to indicate further or continuing trends in the financial or other
positions of the State of Minnesota. Such information constitutes only a brief
summary, relates primarily to the State of Minnesota, does not purport to
include details relating to all potential issuers within the State of Minnesota
whose securities may be purchased by the MINNESOTA SERIES, and does not purport
to be a complete description.

The State of Minnesota has experienced certain budgeting and financial
problems since 1980.

The State Accounting General Fund balance at June 30, 1987 was positive
$168.5 million. The Commissioner of Finance, in his November 1986 forecast,
estimated an Accounting General Fund balance at June 30, 1989, of negative $800
million. The Legislature in May 1987 enacted measures expected to yield
approximately $700 million in additional revenues for the 1987-1989 biennium by
broadening the bases of corporate income and sales taxes and raising the rate of
the cigarette excise tax to 38 cents a pack from 23 cents. The corporate tax
rate was lowered to 9.5% from 12%, and a minimum tax was imposed.

Accounting General Fund appropriations for the 1987-1989 biennium were
$11.35 billion, an increase of 9.4%. A $250 million budget reserve also was
approved.

The 1988 Legislature increased 1987-1989 expenditures a total of $223.8
million and increased revenues a total of $125.5 million.

The Accounting General Fund balance at June 30, 1989 was positive $360
million.

The 1989 Legislature authorized $13.35 billion in spending for the 1989-
1991 biennium, a 16.2% increase over the previous biennium, after excluding
intergovernmental fund transfers. In addition, the Legislature approved a $550
million budget reserve.

The 1989 Legislature passed an omnibus tax bill that included $272 million
in property tax relief and a $72 million increase in tax revenues. The Governor
vetoed the omnibus tax bill, demanding that a larger share of property tax
relief go to business and that the state-subsidized property tax system be
reformed. At a special session in the fall of 1989, a bill was enacted that
included $267 million in property tax relief and a $79 million increase in tax
revenues.

The Commissioner of Finance, in his November 1989 forecast, estimated an
Accounting General Fund balance at June 30, 1991, at negative $161 million. The
Commissioner forecast an $89 million decline in revenues, a $60 million increase
in human services expenditures and a net $29 million decrease due to other
fiscal changes.

The 1990 Legislature enacted budget changes that resulted in a $127 million
net savings for the 1989-1991 biennium. A total of $178 million in spending
reductions were enacted, and increased fees and other revenue changes accounted
for a $12 million gain. New spending totaling $63 million was approved.

A November 1990 forecast estimated a $197 million shortfall for the
biennium ending June 30, 1991, and a $1.2 billion shortfall for the biennium
ending June 30, 1993 due to spending pressures and

<PAGE>

reduced revenues. A March 1991 forecast reduced the estimated shortfall for the
biennium ending June 30, 1993, to $1.1 billion.

In January 1991 the Legislature made $197 million in spending reductions
for the biennium ended June 30, 1991. The State Accounting General Fund balance
at June 30, 1991, was $31 million.

The 1991 Legislature authorized $13.886 billion in spending for the 1991-
1993 biennium. Giving effect to inclusion in the Accounting General Fund of $70
million in dedicated revenues previously budgeted in other funds and dedication
of 1.5 percent of the existing sales tax as well as a new .5 percent local
option sales tax to a Local Government Trust Fund, the total increase in
authorized spending was 9.2 percent.

Tax law changes enacted by the 1991 Legislature were expected to yield $590
million in additional revenues for the 1991-1993 biennium. Federal conformity
on individual and corporate income taxes was expected to raise $82 million;
changes in top individual income tax rates and elimination of some deductions
and exemptions were expected to yield an additional $89 million; extension of
the sales tax to kennel services, telephone paging services and some business-
to-business phone services-$38 million; a 5 cents a pack cigarette tax increase
to 43 cents-$37.2 million; and the .5 percent sales tax increase-$370 million.

After the Legislature adjourned in May 1991, the Commissioner of Finance
estimated that at June 30, 1993, the State would have a $400 million budget
reserve, the amount approved by the 1991 Legislature, and a $103.2 million
Accounting General Fund balance.

In February 1992 the Commissioner of Finance estimated the Accounting
General Fund balance at June 30, 1993, at negative $569 million. The balance at
June 30, 1995, was projected at negative $1.75 billion.

The 1992 Legislature reduced expenditures by $262 million for the biennium
ending June 30, 1993, enacted revenue measures expected to increase revenue by
$149 million, and reduced the budget reserve by $160 million to $240 million.

After the Legislature adjourned in April 1992, the Commissioner of Finance
estimated the Accounting General Fund balance at June 30, 1993, at $2.4 million,
and projected the balance at June 30, 1995, at negative $837 million. A
November 1992 forecast estimated the balance at June 30, 1993, at positive $217
million and projected the balance at June 30, 1995, at negative $769 million.

A March 1993 forecast projected an Accounting General Fund balance at June
30, 1995, at negative $163 million out of a budget for the biennium of
approximately $16.7 billion, and estimated a balance at June 30, 1997, at
negative $1.6 billion out of a budget of approximately $18.7 billion.

The 1993 Legislature authorized $16.519 billion in spending for the 1993-
1995 biennium, an increase of 13.0 percent from 1991-1993 expenditures.
Resources for the 1993-1995 biennium were projected to be $16.895 billion,
including $657 million carried forward from the previous biennium. The $16.238
billion in projected non-dedicated and dedicated revenues was 10.3 percent
greater than in the previous biennium and included $175 million from revenue
measures enacted by the 1993 Legislature.

<PAGE>

The Legislature increased the health care provider tax to raise $79 million,
transferred $39 million into the Accounting General Fund and improved collection
of accounts receivable to generate $41 million.

After the Legislature adjourned in May 1993, the Commissioner of Finance
estimated that at June 30, 1995, the Accounting General Fund balance would be
$16 million and the budget reserve, as approved by the 1993 Legislature, would
be $360 million. The Accounting General Fund balance at June 30, 1993, was $463
million.

The Commissioner of Finance, in a November 1993 forecast, estimated the
Accounting General Fund balance at June 30, 1995, at $430 million, due to
projected increases in revenues and reductions in expenditures, and the balance
at June 30, 1997, at $389 million. The Commissioner recommended that the budget
reserve be increased to $500 million. He estimated that if current laws and
policies continued unchanged, revenue would grow 7.7 percent and expenditures
6.0 percent in the 1995-1997 biennium.

A March 1994 forecast projected an Accounting General Fund balance at June
30, 1995, at $623 million, principally due to a projected $235 million increase
in revenues to $16.6 billion for the biennium. The balance at June 30, 1997,
was estimated to be $247 million.

The 1994 Legislature provided for a $500 million budget reserve;
appropriated to school districts $172 million to allow the districts, for
purposes of state aid calculations, to reduce the portion of property tax
collections that the school districts must recognize in the fiscal year during
which they receive the property taxes; increased expenditures $184 million; and
increased expected revenues $4 million.

Of the $184 million in increased expenditures, criminal justice initiatives
totaled $45 million, elementary and higher education $31 million, environment
and flood relief $18 million, property tax relief $55 million, and transit $11
million. A six-year strategic capital budget plan was adopted with $450 million
in projects financed by bonds supported by the Accounting General Fund. Other
expenditure increases totaled $16.5 million.

Included in the expected revenue increase of $4 million were conformity
with federal tax changes to increase revenues $27.5 million, a sales tax
phasedown on replacement capital equipment and miscellaneous sales tax
exemptions decreasing revenues $17.3 million, and other measures decreasing
revenues $6.2 million.

After the Legislature adjourned in May 1994, the Commissioner of Finance
estimated the Accounting General Fund balance at June 30, 1995, at $130 million.

The Commissioner of Finance, in a November 1994 forecast, estimated the
Accounting General Fund balance at June 30, 1995, at $268 million, due to
projected increases in revenues and decreases in expenditures, and the balance
at June 30, 1997, at $190 million.

A March 1995 forecast projected an Accounting General Fund balance at June
30, 1995, at $383 million, due to a $93.5 million increase in projected revenues
and a $21.0 million decrease in expenditures. The balance at June 30, 1997, was
projected at $250 million.

The State of Minnesota has no obligation to pay any bonds of its political
or governmental subdivisions, municipalities, governmental agencies, or
instrumentalities. The creditworthiness of local

<PAGE>

general obligation bonds is dependent upon the financial condition of the local
government issuer, and the creditworthiness of revenue bonds is dependent upon
the availability of particular designated revenue sources or the financial
conditions of the underlying obligors. Although most of the bonds owned by the
MINNESOTA SERIES are expected to be obligations other than general obligations
of the State of Minnesota itself, there can be no assurance that the same
factors that adversely affect the economy of the State generally will not also
affect adversely the market value or marketability of such other obligations, or
the ability of the obligors to pay the principal of or interest on such
obligations.

At the local level, growth in the property tax base of many communities is
being slowed by overcapacity in certain segments of the commercial real estate
market. In addition, local finances are affected by the amount of state aid
that is made available. Further, various of the issuers within the State of
Minnesota, as well as the State of Minnesota itself, whose securities may be
purchased by the MINNESOTA SERIES, may now or in the future be subject to
lawsuits involving material amounts. It is impossible to predict the outcome of
these lawsuits. Any losses with respect to these lawsuits may have an adverse
impact on the ability of these issuers to meet their obligations.

In March 1995 the State's bond ratings were Aa1 by Moody's, AA+ by S&P, and
AAA by Fitch's.

Economic difficulties and the resultant impact on State and local
government finances may adversely affect the market value of obligations in the
portfolio of the MINNESOTA SERIES or the ability of respective obligors to make
timely payment of the principal and interest on such obligations.

RISK FACTORS FOR THE MISSOURI SERIES.

INTRODUCTION. The following is a discussion of certain risk factors
relevant to the MISSOURI SERIES. The MISSOURI SERIES will concentrate its
investments in debt obligations of the State of Missouri and its local
governmental entities ("Missouri Obligations"). The value of and the payment of
interest and principal on the Missouri Obligations may be adversely affected by
economic and political conditions and developments within or without the State
of Missouri. The information contained herein is not intended to be a complete
discussion of all relevant risk factors, and there may be other factors not
discussed herein that may adversely affect the value of the Missouri
Obligations. The facts discussed herein were obtained primarily from published
information regarding Missouri state entities. The information relates
exclusively to the State of Missouri and is not intended to include any details
relating to debt obligations of local governmental entities located in the State
of Missouri that may be acquired by the MISSOURI SERIES. The discussion is
limited to the general economic conditions in the State of Missouri.

POPULATION. The following information was obtained from the report of the
Bureau of the Census, United States Department of Commerce, in the 1991
Statistical Abstract of the United States (the "1990 Census"). As of 1990, the
population of the State of Missouri was 5,117,073, which caused Missouri to rank
15th in total population among the states. The portion of Missouri's population
that was comprised of individuals classified as minorities was 13.1% as compared
to the United States ("U.S.") average of 24.4%. According to the 1990 Census,
the population of the State of Missouri increased 4.1% from 1980 to 1990, while
the population of the U.S. increased 9.8% during the same period.
Comparatively, during the decade between 1970 and 1980, Missouri's population
increased 5.1% while the U.S. population increased 11.4%. The Missouri
Department of Economic Development has projected that the population of Missouri
will increase 3.5% from 1990 to 2000 and 2.4% from 2000 to 2010, so that
Missouri will have a total estimated population of approximately 5,458,000 by
2010. Without an adequate population

<PAGE>

to support a meaningful tax base, state tax revenues may not be sufficient for
the State of Missouri to make payments on its debt obligations.

ECONOMY. Missouri's economy is divided primarily among agriculture,
manufacturing, services, trade and government. The Missouri Division of
Employment Security reported in March, 1995 that the largest non-agricultural
employers were services with 26.7% of the non-agricultural work force, trade
(wholesale and retail) with 23.8% of the non-agricultural work force,
manufacturing with 16.9% of the non-agricultural work force and government with
16.1% of the non-agricultural work force. According to the U.S. Department of
Commerce, Missouri's gross state product, the aggregate of all economic activity
and wealth produced in the State of Missouri, rose from $53.1 billion in 1980 to
$101.5 billion in 1990, representing an average annual increase of approximately
6.7%. During the same period, the U.S. gross national product increased
approximately 7.0% per year. The annual per capita personal income for the
State of Missouri for 1990, 1992 and 1993 was $17,407, $18,970 and $19,463,
respectively, while the U.S. annual per capita income for the same years was
$18,477, $19,802 and $20,864. The University of Missouri in Columbia, Missouri
(the "University") has projected that the per capita income for Missouri
residents will increase 5.7% in calendar year 1995, while per capita income for
U.S. residents will increase 5.5% during the same period. Inadequate state
gross product or per capita income could adversely affect the State's tax
revenues and, therefore, its ability to meet its current debt obligations.

EMPLOYMENT. The Missouri Department of Labor and Industrial Relations has
reported that Missouri's unemployment rates for fiscal years 1992, 1993 and 1994
were 6.1%, 5.9% and 5.8%, respectively, while the U.S. unemployment rates for
the same periods were 7.1%, 7.2% and 6.5%. The University has projected that
Missouri's unemployment rate for calendar year 1995 will be 4.4%, while the U.S.
unemployment rate for the same period will be 5.8%. If the State has
significant unemployment in future years, the State's tax revenues may not be
adequate to pay its debt obligations.

STATE REVENUES. The State of Missouri operates from a General Revenue Fund
("General Fund"). The General Fund includes funds received from tax revenues
and federal grants. For fiscal year 1994, the State derived approximately 18.0%
of the General Fund revenue from sales and use taxes, 30.6% from individual
income taxes and 3.6% from corporate income taxes.

The Missouri Constitution imposes a limit on the amount of taxes that may
be imposed by the General Assembly during any fiscal year. This limit is
related to total state revenues for fiscal year 1981, as defined in Article X,
Sections 16 through 24 of the Missouri State Constitution, and is adjusted
annually in accordance with a formula related to increases in the average
personal income of Missouri residents for certain designated periods.
Inadequate tax revenues due to the constitutional limitations may adversely
affect the State's ability to pay its debt obligations.

Federal grants account for approximately 31.1% of the General Fund revenues
for fiscal year 1994. No assurances can be given that the amount of federal
grants previously provided to the State will continue, and the amount of federal
grants received by the State may have an effect on its ability to pay its debts.

The U.S. District Courts in St. Louis and Kansas City ordered the State to
make payments totalling $277.5 million during fiscal year 1994 and
$275.8 million during fiscal year 1993 to fund the State's share of certain
court-ordered desegregation plans. These amounts constituted approximately 6.0%
of the State's General Fund revenue (exclusive of federal grants) for fiscal
year 1994 and 6.3% of the State's General

<PAGE>

Fund revenue (exclusive of federal grants) for fiscal year 1993. The amount, if
any, of future court-ordered expenditures from the State regarding desegregation
cannot be predicted accurately, and its magnitude may adversely affect the
State's ability to meet its debt obligations.

The Missouri State Constitution mandates a balanced annual state budget.
The requirement of a balanced state budget may affect the ability of the State
of Missouri to repay its debt obligations. For fiscal year 1993, the General
Fund revenue, minus federal grants, amounted to $4,350.4 million, which
represented a 3.3% increase in General Fund revenue over the previous fiscal
year. The balance in the General Fund as of the end of the 1993 fiscal year was
$421.3 million. This represented an 11% increase in the General Fund balance
from the end of fiscal year 1992.

For fiscal year 1994, the State budgeted, exclusive of federal grants,
$4,556.2 million in General Fund revenue, which represented a 4.7% increase from
the actual revenue amount for fiscal year 1993. However, for fiscal year 1994,
the actual General Fund revenue, exclusive of federal grants, was
$4,660.2 million, which was 2.3% higher than budgeted and represented a 7.1%
increase from fiscal year 1993. The actual General Fund balance at the end of
fiscal year 1994 was $513.4 million, which was 21.9% higher than the balance at
the end of fiscal year 1993. This increase, along with increases in fiscal
years 1992 and 1993, helped to offset decreases in fiscal years 1990 and 1991
which had reduced the General Fund balance from $436.5 million at the end of
fiscal year 1989 to $214.7 million at the end of fiscal year 1991. For fiscal
year 1995, the State of Missouri budgeted, exclusive of federal grants,
$5,117.4 million in General Fund revenue, which represents a 9.8% increase from
the actual revenue amount for fiscal year 1994. There are no assurances that
the revenues and fund balances budgeted will be attained in the future.
Decreases in revenues and the General Fund balance could adversely affect the
State's ability to pay its debt obligations.

STATE BOND INDEBTEDNESS. The State of Missouri is barred by Article III,
Section 37 of the Missouri State Constitution from issuing debt instruments to
fund government operations. However, it is authorized to issue bonds to finance
or refinance the cost of capital projects upon approval by the voters. In the
past, the State has issued two types of bonds to raise capital - general
obligation bonds and revenue bonds. The State has authorized and issued general
obligation bonds through two state agencies for two specific needs. Water
Pollution Control Bonds have been issued to provide funds for the protection of
the environment through the control of water pollution. State Building Bonds
have been issued to provide funds to improve state buildings and property.
Payments on the general obligation bonds are made from the General Fund.
Therefore, if the State is unable to increase its tax revenues, the State's
ability to make the payments on the existing obligations may be adversely
affected.

In addition to state general obligation bonds, the State of Missouri has
statutes that enable certain local political or governmental authorities, such
as cities, counties and school districts, to issue general obligation bonds.
These local general obligation bonds are required to be registered with the
State Auditor's Office. Local general obligation bonds are backed by the
general revenues (including ad valorem and other taxes) of the particular local
governmental or political authority issuing such bonds. The State of Missouri
generally has no obligation with respect to such bonds.

The State is also authorized to issue revenue bonds. Revenue bonds
generally provide funds for a specific project, and repayments are generally
limited to the revenues from that project. However, the State may enact a tax
specifically to repay the State's revenue bonds. Therefore, a reduction of
revenues from a project financed by revenue bonds may adversely affect the
State's ability to make payments on

<PAGE>

such bonds. No assurances can be given that the State will receive sufficient
revenues from the projects, or that the State will enact and collect a tax to be
used to make the required payments on such bonds.

As of June 30, 1994, according to the Committee on Legislative Research of
the State of Missouri, the State of Missouri had outstanding total state general
obligation bond debt amounting to $862,435,000 in principal and $465,123,328 in
interest to be paid over the period such debt remains outstanding. On the same
date, the State had outstanding total state revenue bond debt amounting to
$134,405,000 in principal and $76,209,513 in interest to be paid over the period
such debt remains outstanding. In addition to the state bond debt, as of
June 30, 1994, the total outstanding principal amount of debt issued by
independent statutory authorities in Missouri was $5,754,607,607. Factors that
may adversely affect the ability of the issuers to repay their debts include
(1) statutory and constitutional limitations on the State of Missouri, and its
agencies and local political and governmental authorities and (2) the success of
the projects to which the debts relate.

MISSOURI BOND RATINGS. S&P and Moody's rating services of state bond
issuers generally rate a bond issuer's ability to repay debt obligations. The
general obligation bonds issued by the State of Missouri are currently rated AAA
by S&P and Aaa by Moody's, the highest rating for each agency. However,
prolonged uncertainty over the State's current financial outlook could impair
the State's ability to maintain such ratings. No assurances can be given that
the State's current ratings will be maintained for any given period or that such
ratings will not be lowered, suspended or withdrawn entirely by either rating
agency. Any reduction in, suspension of, or withdrawal of such ratings may have
an adverse effect on the resale market price of Missouri bonds. With respect to
the rating of revenue bonds, such rating generally depends on the amount of the
revenue from the specific project.

RISK FACTORS FOR NEW YORK SERIES. NEW YORK INSURED is highly sensitive and
vulnerable to the fiscal stability of New York State (the "State") and its
subdivisions, agencies, instrumentalities and authorities that issue the
Municipal Instruments in which New York Insured concentrates its investments.
The following information as to certain risk factors associated with New York
Insured's concentration in Municipal Instruments issued by New York issuers is
only a brief summary, does not purport to be a complete description, and is
based upon disclosure in Official Statements relating to offers of Municipal
Instruments, and other publicly available information, prior to the end of
March, 1995. No representation is made herein as to the accuracy or adequacy of
such information, or as to the existence of any adverse changes in such
information after the date thereof.

The State economy turned in a mixed performance during 1994. The moderate
employment growth that characterized 1993 continued into mid-1994, then
virtually ceased. After July, the trade and construction sectors stopped adding
jobs and government employment declined. Growth, though considerably slower
than earlier in the year, continued in the service sector. Wages grew at around
3.5 percent, reflecting, in part, a plunge in bonus payments from securities
firms whose profits dropped in 1994. Personal income rose 4.0 percent in 1994.

Employment growth is expected to slow to less than 0.5 percent in 1995.
Continued restructuring by large corporations and all levels of government
largely account for the subdued growth rate in the forecast. Slow growth in
employment and average wages is expected to restrain wage growth to a modest 3.2
percent in 1995. Personal income is anticipated to receive a boost from higher
interest rates and rise by 4.4 percent.

<PAGE>

Significant uncertainties exist in the forecasts. Consumer spending could
be more robust than anticipated, and recoveries in Europe and Japan may be
stronger than expected, leading to continued strong expansion throughout 1995.
Interest rates, on the other hand, may be at a level that will initiate a
sharper-than-expected slowdown. Financial instability, such as the foreign
exchange turmoil in Mexico, remains possible. The State forecast could fail to
estimate correctly the growth in average wages and the effect of corporate and
government downsizing.

EXECUTIVE BUDGET. On February 1, the Governor presented his 1995-96
Executive Budget to the Legislature, as required by the State Constitution. The
Governor's budget is balanced on a cash basis in the General Fund. The Governor
may amend his budget up to 30 days after its submission to the Legislature.
There can be no assurance that the Legislature will enact the proposed Executive
Budget into law, or that actual results will not differ materially and adversely
from the projections set forth below.

The 1995-96 Executive Budget is the first to be submitted by the Governor,
who assumed office on January 1. It proposes actual reductions in the year-
over-year dollar levels of State spending from the General Fund for the first
time in over half a century with a proposed cut of 3.4 percent. Proposed
spending on State operations is projected to drop even more sharply, by 7.7
percent. Nominal spending from all State funding sources (I.E., excluding
Federal aid) is proposed to drop by 0.3 percent from the prior fiscal year, in
contrast to the prior decade when annual State-funded spending growth averaged
more than 6.0 percent. There are, however, risks and uncertainties concerning
whether or not certain tax and spending cuts proposed in the Executive Budget
will be enacted, or if enacted, will be upheld in the face of potential legal
challenges. For example, there can be no assurance that cuts in social-welfare
entitlement programs will not be challenged in court. Further, the Comptroller
has indicated his intention to challenge in Court the proposed use of certain
pension reserves in the Executive Budget.

According to the Executive Budget, in the 1995-96 fiscal year, the State
Financial Plan, based on current-law provisions governing spending and revenues,
would be out of balance by almost $4.7 billion, as a result of three key
factors: (1) the projected structural deficit resulting from the ongoing
disparity between sluggish growth in receipts, the effect of prior-year tax
changes, and the rapid acceleration of spending growth ($2.1 billion); (2) the
impact of unfunded 1994-95 initiatives, including capital projects such as
sports and recreational facilities, an increase in revenue sharing to local
governments, further State takeover of local Medicaid costs, more school aid,
and increased tuition assistance ($1.1 billion); and (3) the use of one-time
solutions to fund recurring spending in the 1994-95 budget ($1.5 billion). Tax
cuts proposed to spur economic growth and provide relief for low and middle-
income tax payers add $240 million to the projected imbalance or budget gap,
bringing the total to approximately $5 billion.

The Executive Budget proposes to close this budget gap for the 1995-96
fiscal year through (1) $1.9 billion from cost containment savings in social-
welfare programs, particularly Medicaid cost-containment recommendations ($1.277
billion), Income-Maintenance restructuring recommendations ($340 million), and
the consolidation of various child-care programs into a Family Services Block
Grant to counties and New York City; (2) $2.5 billion in savings from State
agency restructuring that is expected to reduce spending on the State workforce,
SUNY and CUNY, mental hygiene programs, capital projects, the prison population,
and public authorities; (3) $350 million in savings from local assistance
reforms, by freezing school aid, revenue sharing and county costs of pre-school
special education at current levels, while proposing program legislation to
provide relief from certain mandates that increase local spending; and (4) $200
million in new revenue measures, primarily a new Quick Draw Lottery game and
changes to tax-payment schedules.

<PAGE>

The Executive Budget indicates that for years State revenues have grown at
a slower rate than State spending, producing an increasing structural deficit,
and that if the proposals in the Executive Budget are enacted (particularly the
spending cuts described above) the State will start to eliminate the structural
imbalance that has characterized the State's fiscal record. There can, however,
be no assurances that the tax and spending cuts proposed in the Executive Budget
will be enacted as proposed, or that if enacted, will eliminate potential
imbalances in future fiscal years. The Governor's recommended multi-year
personal income tax cuts are designed to reduce the yield on that tax by about
one-third by 1998, and could require significant additional spending cuts in
those years, increased economic growth to provide additional revenues,
additional revenue measures, or a combination of those factors.

AUTHORITIES. The fiscal stability of the State is related to the fiscal
stability of its Authorities. There are several Authorities, with various
responsibilities, which include financing, constructing and operating revenue
producing public benefit facilities. Authorities are not subject to the
constitutional restrictions on the incurrence of debt which apply to the State
itself and may issue bonds and notes within the amounts of, and as otherwise
restricted by, their legislative authorization. State legislation authorizes
financing techniques for Authorities such as State (i) guarantees of Authority
obligations, (ii) lease-purchase and contractual-obligation financing
arrangements and (iii) statutory moral obligation provisions. The State's
access to the public credit markets could be impaired if any of its Authorities,
particularly those using the financing techniques specified above, were to
default on their respective obligations. In addition, certain statutory
arrangements provide for State local assistance payments otherwise payable to
localities to be made under certain circumstances to certain Authorities. The
State has no obligation to provide additional assistance to localities whose
local assistance payments have been paid to Authorities under these
arrangements. However, in the event that such local assistance payments are so
diverted, the affected localities could seek additional State funds.

Debt service on outstanding Authority obligations is normally paid out of
revenues generated by the Authorities' projects or programs, but in recent years
the State has provided special financial assistance, in some cases of a
recurring nature, to certain Authorities, for operating and other expenses and
for debt service pursuant to its moral obligation indebtedness provisions or
otherwise. Additional assistance is expected to be required in the State's
1994-95 fiscal year and in future years. The State's experience has been that if
any Authority suffers serious financial difficulties, both the ability of the
State and the Authorities to obtain financial assistance in the public credit
markets and the market price of the State's and Authorities' outstanding bonds
and notes may be adversely affected.

MUNICIPALITIES. The cities, towns, villages and school districts of the
State are political subdivisions of the State with the powers granted by the
State Constitution and statutes. As the sovereign, the State retains broad
powers and responsibilities with respect to the finances and welfare of the
subdivisions, especially in education and social services. In recent years the
State has been called upon to provide added financial assistance to certain
localities. The fiscal stability of the State is thus related to the fiscal
stability of its localities, including New York City (the "City"). A number of
factors could affect localities during the State's and 1994-1995 and 1995-1996
fiscal years and thereafter.

Although the City has balanced its budget since 1981, estimates of the
City's future revenues and expenditures, which are based on numerous
assumptions, are subject to various uncertainties. If, for example, expected
Federal or State aid is not forthcoming; if unforeseen developments in the
economy significantly reduce revenues derived from economically sensitive taxes,
or necessitate increased expenditures for public assistance; if the City should
negotiate wage increases for its employees greater

<PAGE>

than the amounts provided for in the City's financial plan; or if other
uncertainties materialize that reduce expected revenues or increase projected
expenditures, then, to avoid operating deficits, the City may be required to
implement additional actions, including increases in taxes and reductions in
essential City services. The City might also seek additional assistance from
the State.

In response to the City's fiscal crisis in 1975, the State took action to
assist the City in returning to fiscal stability. Among those actions, the
State established the Municipal Assistance Corporation for the City of New York
("MAC") to provide financing assistance to the City; the New York State
Financial Control Board (the "Control Board") to oversee the City's financial
affairs; the Office of the State Deputy Comptroller for the City of New York
("OSDC") to assist the Control Board in exercising its powers and
responsibilities; and a "Control Period" from 1975 to 1986 during which the City
was subject to certain statutorily-prescribed fiscal-monitoring arrangements.
Although the Control Board terminated the Control Period in 1986 when certain
statutory conditions were met, thus suspending certain Control Board powers, the
Control Board, MAC and OSDC continue to exercise various fiscal-monitoring
functions over the City, and upon the occurrence or "substantial likelihood and
imminence" of the occurrence of certain events, including, but not limited to a
City operating budget deficit of more than $100 million, the Control Board is
required by law to reimpose a Control Period. Currently, the City and its
Covered Organizations (i.e., those which receive or may receive monies from the
City directly, indirectly or contingently) operate under a four-year financial
plan which the City prepares annually and periodically updates.

The staffs of OSDC and the Control Board issue periodic reports on the
City's financial plans, as modified, analyzing forecasts of revenues and
expenditures, cash flow, and debt service requirements, as well as compliance
with the financial plan, as modified, by the City and its Covered Organizations.
OSDC staff reports issued during the mid-1980's noted that the City's budgets
benefited from a rapid rise in the City's economy, which boosted the City's
collection of property, business and income taxes. These resources were used to
increase the City's workforce and the scope of discretionary and mandated City
services. Subsequent OSDC staff reports examined the 1987 stock market crash
and the 1989-92 recession, which affected the New York City region more severely
than the nation, and attributed an erosion of City revenues and increasing
strain on City expenditures to that recession. According to a recent OSDC staff
report, the City's economy is now slowly recovering, but the scope of that
recovery is uncertain and unlikely, in the foreseeable future, to match the
expansion of the mid-1980's. Also, staff reports of OSDC and the Control Board
have indicated that the City's recent balanced budgets have been accomplished,
in part, through the use of non-recurring resources, tax increases and
additional State assistance; that the City has not yet brought its long-term
expenditures in line with recurring revenues; and that the City is therefore
likely to continue to face future projected budget gaps requiring the City to
increase revenues and/or reduce expenditures. According to the most recent
staff reports of OSDC and the Control Board, during the four-year period covered
by the current financial plan, the City is relying on obtaining substantial
resources from initiatives needing approval and cooperation of its municipal
labor unions, Covered Organizations, and City Council, as well as the State and
Federal governments, among others.

The City requires significant amounts of financing for seasonal and capital
purposes. The City has issued $1.75 billion of notes for seasonal financing
purposes during its fiscal year ending June 30, 1994. The City's capital
financing program projects long-term financing requirements of approximately $17
billion for the City's fiscal years 1995 through 1998. The major capital
requirements include expenditures for the City's water supply and sewage
disposal systems, road, bridges, mass transit, schools, hospitals and housing.

<PAGE>

Certain localities in addition to the City could have financial problems
leading to requests for additional State assistance during the State's 1994-95
fiscal years and thereafter. The potential impact on the State of such requests
by localities is not included in the projections of the State's receipts and
disbursements for the State's 1994-95 fiscal year.

Municipalities and school districts have engaged in substantial short-term
and long-term borrowings. In 1992, the total indebtedness of all localities in
the State other than the City was approximately $15.7 billion. A small portion
(approximately $71.6 million) of that indebtedness represented borrowing to
finance budgetary deficits and was issued pursuant to State enabling
legislation. State law requires the Comptroller to review and make
recommendations concerning the budgets of those local government units other
than the City authorized by State law to issue debt to finance deficits during
the period that such deficit financing is outstanding. Seventeen localities had
outstanding indebtedness for deficit financing at the close of their fiscal year
ending in 1992.

Certain proposed Federal expenditures reduce, or in some cases eliminate,
Federal funding of some local programs and accordingly might impose substantial
increased expenditure requirements on effected localities to increase local
revenues to sustain those expenditures. If the State, the City or any of the
Authorities were to suffer serious financial difficulties jeopardizing their
respective access to the public credit markets, the marketability of notes and
bonds issued by localities within the State could be adversely affected.
Localities also face anticipated and potential problems resulting from certain
pending litigation, judicial decisions, and long-range economic trends. The
longer-range potential problems of declining urban population, increasing
expenditures, and other economic trends could adversely affect certain
localities and require increasing State assistance in the future.

LITIGATION. Various legal proceedings in which the State is involved
concern State finances, State programs and miscellaneous tort, real property and
contract claims in which the State is a defendant and the monetary damages
sought are substantial. These proceedings could affect adversely the financial
condition of the State in the 1994-95 fiscal year or thereafter.

RISK FACTORS FOR THE NORTH CAROLINA SERIES. North Carolina State and
municipal securities may be adversely affected by economic and political
conditions and developments within the State of North Carolina.

ECONOMIC PROFILE. The economic profile of the State consists of a
combination of agriculture, industry and tourism. The State is moving away from
its traditional agricultural base towards a service and goods producing economy.
The State labor force reflects this increased emphasis toward non-agricultural
production. According to the North Carolina Employment Security Commission,
total non-agricultural employment as of January 1995 was approximately 3,436,800
jobs, of which 871,500 were in the manufacturing industry. These figures have
risen since 1991, when total non-agricultural employment was approximately
3,072,200, of which 826,100 jobs were in the manufacturing industry. A majority
of the employment that was available within non-manufacturing industry as of
January 1995 was provided by retail trade, the services industry and the
government sector. In January 1995, the retail trade provided approximately
608,500 jobs, services provided approximately 743,600 jobs and the government
sector provided approximately 550,600 jobs. In 1991, these figures were
703,400, 602,000 and 501,700, respectively.

<PAGE>

Based upon the unofficial 1990 census estimates of population growth, the
population of North Carolina increased 12.70% from 5,881,766 in 1980 to
6,628,637 in 1990. According to the Employment Security Commission, the labor
force grew 4.7% to 3,608,200 by February 1995, from 3,445,000 in 1991. The
Employment Security Commission also estimates the unadjusted unemployment rate
in February 1995 to have been 5.0% of the labor force, as compared with the
nationwide unadjusted unemployment rate of 5.9%. The North Carolina annual
average unemployment rate over the past six years has ranged from a high of 5.9%
in 1992 to a low of 3.5% in 1989.

Agriculture remains a basic economic element in North Carolina, accounting
for over 28% of the State's income. Total gross agricultural income in 1993 was
approximately $5.5 billion, up from 5.2 billion in 1992. Poultry and eggs
remain the leading source of agricultural non-crop income in the State. Income
from the production of poultry and eggs for 1993 was approximately $1.8 billion,
accounting for approximately 33.4% of the gross agricultural income. These
figures are up from $1.6 billion and 31% in 1992. In addition, tobacco
production remains the leading source of agricultural crop income in the State.
Income from the production of tobacco for 1993 was approximately $1 billion,
accounting for approximately 18.9% of the gross agricultural income. These
figures are down from $1.1 billion and 21.2% in 1992. Federal legislation and
regulatory measures regarding tobacco production and marketing, along with
international competition has and is expected to continue to affect tobacco
farming in North Carolina. Changes in such factors or any other adverse
conditions in the tobacco farming sector could have negative effects on farm
income and the North Carolina economy as a whole.

In 1994 there were approximately 58,000 farms in the State, compared to
60,000 in 1992 and 72,000 in 1978. Even though the total number of farms in
North Carolina has decreased, the diversity of agriculture in North Carolina and
a continuing push in agriculture marketing efforts have protected farm income
from some of the wide variations that have been experienced in other states
where most of the agricultural economy is dependent on a small number of
agricultural commodities. According to the State Commissioner of Agriculture,
North Carolina ranks first in the nation in the production of flue-cured
tobacco, total tobacco, turkeys raised and sweet potatoes; second in the
production of cucumbers for pickles, the value of poultry and poultry products,
and trout; third in the number of hogs on farms and net farm income; fourth in
peanuts, commercial broilers, blueberries and rye; sixth in burley tobacco
production; and seventh in apples and greenhouse and nursery receipts. A strong
agri-business sector also supports farmers with farm inputs (fertilizer,
insecticide, pesticide and farm machinery) and processing of commodities
produced by farmers (vegetable canning and cigarette manufacturing).

The North Carolina Department of Economic and Community Development, Travel
and Tourism Division, has reported that in 1994 approximately $8.3 billion was
spent on travel and tourism in the State, compared to $8.0 billion in 1993, $7.4
billion in 1992 and $7.0 billion in 1991. Approximately 77% of trips to the
State in 1994 represented vacation travel. The Department estimates that
approximately 250,000 people were fully employed in tourism-related jobs in
1993.

LEGISLATIVE AND JUDICIAL DEVELOPMENTS. The following represents an
overview of the State budgetary system and a discussion of legislation passed by
the General Assembly in recent years along with current judicial developments
effecting the State budget and fiscal health.

In North Carolina the issuance of municipal debt is overseen by the North
Carolina Local Government Commission. This Commission is composed of nine
members including the State Treasurer, the Secretary of State, the State
Auditor, and the Secretary of Revenue. This Commission handles the

<PAGE>

approval, sale, and delivery of all local bonds and notes issued in North
Carolina and monitors certain fiscal and accounting standards prescribed by The
Local Government Budget and Fiscal Control Act. No unit of local government can
incur bonded indebtedness without the Commission's prior approval. If approved,
the obligations are sold by the Commission on a sealed bid basis. The
Commission then monitors the local unit's debt service through a system of
monthly reports.

Over the past twenty years, North Carolina State debt obligations have
maintained ratings of Aaa in Moody's and AAA in S&P. There can be no assurance
that the State's current ratings will be maintained for any given period or that
such ratings will not be lowered, suspended or withdrawn entirely by either
rating agency.

The North Carolina State Constitution requires that the total expenditures
of the State for the fiscal period covered by the budget shall not exceed the
total receipts during that fiscal period plus the surplus remaining in the State
Treasury at the beginning of the period. The State has not realized any revenue
shortfalls in recent fiscal years. For the two most recent fiscal periods
ending June 30, 1993 and 1994, the State realized budgetary credit balances of
approximately $578.9 million and $887.5 million, respectively. However, during
the 1989-90 and 1990-91 fiscal years, the State had revenue shortfalls of
approximately $346.2 million and $727.3 million, respectively, requiring the
Governor and General Assembly to mandate significant spending constraints
through reductions in spending authorizations and hiring restrictions to fulfill
the constitutional requirement of maintaining a balanced budget. Therefore,
even though the State has not experienced any revenue shortfalls in recent
years, there is no guarantee that a budgetary credit balance will continue to be
realized in future periods.

The State budget is based upon a correlation between estimated revenues and
expenditures for the State and various State and non-State factors. These
factors include State and national economic conditions, federal government
legislation and policies, and international activities and economic conditions.
The General Fund and the Highway Fund represent the two major operating funds.

Revenues from the General Fund are used to finance virtually all non-
highway operations of the State Government, while revenues from the Highway
Fund, the majority of which are generated by taxes and fees related to motor
vehicles and highway use, are primarily used for the maintenance and upkeep of
the State highway system.

Legislation enacted by the 1991 General Assembly increased state sales
taxes, individual and corporate income taxes, cigarette taxes, real estate
conveyance taxes, alcoholic beverage fees and taxes, insurance taxes, and
certain other taxes and fees. The State's portion of the sales tax was
increased from 3% to 4% increasing the sales tax revenue by $507.9 million in
the 1992-93 fiscal year. The General Assembly also increased the corporate
income tax rate from 7% to 7.75% in addition to imposing a temporary surtax of
4% beginning in 1991 (creating an effective corporate tax rate of 8.06% in
1991), decreasing by 1% each year thereafter and ending in 1995, which increased
corporate income tax revenue by $91.7 million in the 1992-93 fiscal year. The
addition of a 7.75% tax bracket for taxable personal income above $100,000 for
married taxpayers filing a joint tax return, and an equivalent increase for
other categories increased individual income tax revenue by $52 million in the
1992-93 fiscal year. The increase in the cigarette excise tax from $0.02 to
$0.05 per pack of 20 raised tax revenue by $17.2 million in the 1992-93 fiscal
period. The increase in the deed stamp tax on real estate conveyances from $1
per $1,000 of consideration to $2 per $1,000 of the value of the property
transferred generated a tax revenue increase in the 1992-93 fiscal year of $12.5
million.

<PAGE>

Besides adopting a biennium budget for the 1991-1993 fiscal periods, the
1991 General Assembly also adopted other legislation addressing future budget
enactments. This budget reform package placed restrictions on the growth in the
total number of state employees, placed limitations on the growth of the second
year of a biennium budget, and established funding for a budget stabilization
reserve. These restrictions are currently still in place.

The 1991 General Assembly also appropriated $3.0 million for the 1991-92
fiscal year to contract for performance audits of the Executive and Legislative
Branches of the State Government. The Government Performance Audit Committee
was formed to study ways in which the state government could be streamlined and
made more efficient. The Committee's report submitted to the 1993 General
Assembly recommended short-term initiatives and long-term strategies including
changes in education, the institution of an Economic Development Board,
improvements in the State's information technology, a downsizing in the State's
mental health facilities, expansion of the Carolina Access Program (Medicaid
Managed Care), and a reorganization of the Departments of Transportation,
Correction and Revenue. In 1993, the General Assembly passed legislation based
on the Committee's recommendations. As these recommendations are fully
implemented, future savings are anticipated by the Commission. The effect these
legislative changes have had, or may have, on the long term fiscal condition of
the State and its political subdivisions cannot be presently determined.

The 1993 General Assembly enacted a total 1993-95 budget of $33.2 billion,
representing a 19.8% increase over the 1991-93 budget of $27.9 billion. The
1994 General Assembly passed in a special legislative session, an anti-crime
package totalling $257 million. It includes a 3,000-bed increase in prison
space, stricter sentencing guidelines and early intervention programs for
children and those with drug problems. This anti-crime legislation will be
funded from beginning budgetary credit balances and operational revenues.

The Regular Session of the 1994 General Assembly authorized additional
General Fund expenditures of $1.02 billion in excess of the previously
authorized 1994-95 budget. A major portion of these additional expenses
consists of a $427.1 million compensation package for public school teachers,
state employees and employees of state-funded local programs. The funding of
these additional expenditures is to come from the collection of additional
revenues and a reduction in existing programs.

The Regular Session of the 1995 General Assembly began with the Governor
proposing a new tax relief plan which, if enacted by the General Assembly, would
be the biggest tax cut in North Carolina history. A description of the major
tax cuts proposed by the Governor and their related timetables are as follows:
(1) the reduction in the corporate income tax rate from 7.75% to 7% effective
July of 1996; (2) the repeal of the intangibles tax on stocks and bonds
effective January of 1995; (3) the creation of a new tax credit in the amount of
$50 per child effective January of 1995; (4) the increase in the personal
exemption for each member of a household from $2,000 to $2,500 effective July of
1996; and (5) the increase in the homestead exemption for low-income elderly
people such that the income eligibility would rise from $11,000 to $15,000 and
the property exemption would be increased from $15,000 to $18,000 effective
January of 1996. Currently, this proposed tax legislation has not been
enacted.

Additionally, the North Carolina Supreme Court recently decided FULTON
CORP. V. JUSTUS. In this case, the plaintiff challenged the constitutionality
of a North Carolina intangibles tax levied on ownership of corporate stock. The
plaintiff alleged that this intangibles tax violated the Commerce Clause of the
United States Constitution because it taxed more heavily the stock of
corporations not doing business in

<PAGE>

North Carolina. However, the Court found that this taxing scheme treated all
corporations with substantial equality because the intangibles tax imposed on a
corporation's stock was directly and inversely proportional to the issuing
corporation's taxable income in North Carolina. The effect was to reduce the
intangibles tax liability on a corporation's stock to the extent the
corporation's income was taxed in North Carolina; and to increase the
intangibles tax liability on a corporation's stock to the extent the
corporation's income was not taxed in North Carolina. The plaintiff may
petition for certiorari to the United States Supreme Court. If the United
States Supreme Court grants certiorari and overrules the North Carolina Supreme
Court, the State of North Carolina may face significant liability for refund of
past intangible taxes paid, and the loss of future revenues. This contingency
may be affected by the proposed legislation mentioned above repealing the
intangibles tax.

Also, the North Carolina Supreme Court recently decided SWANSON V. STATE OF
NORTH CAROLINA. This case involved class action plaintiffs (former federal
employees and active duty federal military personnel and reservists) who were
seeking full refunds for North Carolina income taxes paid on federal pension
benefits during tax years 1985-1988. The plaintiffs claimed they were due a
refund because state employee pension benefits were exempted from income
taxation, while federal employee benefits were exempt only up to $3,000. The
Court held that because the plaintiffs had not complied with procedural
requirements, they were not entitled to tax refunds for the years 1985-1988.
The plaintiffs are expected to petition for certiorari to the United States
Supreme Court. If they do and the United States Supreme Court grants certiorari
and overrules the N.C. Supreme Court, the State of North Carolina faces
potential liability of $150-$300 million. Furthermore, there an be no
assurances that the outcome of other lawsuits pending or filed in the future
will not have a material adverse affect upon the State of North Carolina.

RISK FACTORS FOR THE OHIO SERIES. The OHIO SERIES will invest most of its
net assets in securities issued by or on behalf of (or in certificates of
participation in lease-purchase obligations of) the State of Ohio, political
subdivisions of the State, or agencies or instrumentalities of the State or its
political subdivisions (Ohio Obligations). The OHIO SERIES is therefore
susceptible to general or particular political, economic or regulatory factors
that may affect issuers of Ohio Obligations. The following information
constitutes only a brief summary of some of the many complex factors that may
have an effect. The information does not apply to "conduit" obligations on
which the public issuer itself has no financial responsibility. This
information is derived from official statements of certain Ohio issuers
published in connection with their issuance of securities and from other
publicly available information, and is believed to be accurate. No independent
verification has been made of any of the following information.

Generally, the creditworthiness of Ohio Obligations of local issuers is
unrelated to that of obligations of the State itself, and the State has no
responsibility to make payments on those local obligations.

There may be specific factors that at particular times apply in connection
with investment in particular Ohio Obligations or in those obligations of
particular Ohio issuers. It is possible that the investment may be in
particular Ohio Obligations, or in those of particular issuers, as to which
those factors apply. However, the information below is intended only as a
general summary, and is not intended as a discussion of any specific factors
that may affect any particular obligation or issuer.

The timely payment of principal and interest on Ohio Obligations has been
guaranteed by bond insurance purchased by the issuers, the Ohio Series or other
parties. Those Ohio Obligations may not be subject to the factors referred to
in this section of the SAI.

<PAGE>

Ohio is the seventh most populous state. The 1990 Census count of
10,847,000 indicated a 0.5% population increase from 1980. The Census estimate
for 1993 is 11,091,000.

While diversifying more into the service and other non-manufacturing areas,
the Ohio economy continues to rely in part on durable goods manufacturing
largely concentrated in motor vehicles and equipment, steel, rubber products and
household appliances. As a result, general economic activity, as in many other
industrially-developed states, tends to be more cyclical than in some other
states and in the nation as a whole. Agriculture is an important segment of the
economy, with over half the State's area devoted to farming and approximately
15% of total employment in agribusiness.

In prior years, the State's overall unemployment rate was commonly somewhat
higher than the national figure. For example, the reported 1990 average monthly
State rate was 5.7%, compared to the 5.5% national figure. However, for the
last four years the State rates were below the national rates (5.5% versus 6.1%
in 1994, based on preliminary figures). The unemployment rate and its effects
vary among geographic areas of the State.

The State operates on the basis of a fiscal biennium for its appropriations
and expenditures, and is precluded by law from ending its July 1 to June 30
fiscal year (FY) or fiscal biennium in a deficit position. Most State
operations are financed through the General Revenue Fund (GRF), for which the
personal income and sales-use taxes are the major sources. Growth and depletion
of GRF ending fund balances show a consistent pattern related to national
economic conditions, with the ending FY balance reduced during less favorable
and increased during more favorable economic periods. The State has well-
established procedures for, and has timely taken, necessary actions to ensure
resource/expenditure balances during less favorable economic periods. Those
procedures included general and selected reductions in appropriations spending.

Key biennium-ending fund balances at June 30, 1989 were $475.1 million in
the GRF and $353 million in the Budget Stabilization Fund (BSF, a cash and
budgetary management fund). In the next two fiscal years necessary corrective
steps were taken to respond to lower receipts and higher expenditures in certain
categories than earlier estimated. Those steps included selected reductions in
appropriations spending and the transfer of $64 million from the BSF to the GRF.
Reported June 30, 1991 ending fund balances were $135.3 million (GRF) and $300
million (BSF).

To allow time to resolve certain budget differences for the latest complete
biennium, an interim appropriations act was enacted effective July 1, 1991; it
included GRF debt service and lease rental appropriations for the entire 1992-93
biennium, while continuing most other appropriations for a month. Pursuant to
the general appropriations act for the entire biennium passed on July 11, 1991,
$200 million was transferred from the BSF to the GRF in FY 1992.

Based on updated results and forecasts in the course of FY 1992, both in
light of a continuing uncertain nationwide economic situation, there was
projected and then timely addressed an FY 1992 imbalance in GRF resources and
expenditures. GRF receipts significantly below original forecasts resulted

<PAGE>

primarily from lower collections of certain taxes, particularly sales use and
personal income taxes. Higher expenditure levels came in certain areas,
particularly human services including Medicaid. The Governor ordered most State
agencies to reduce GRF spending in the last six months of FY 1992 by a total of
approximately $184 million. As authorized by the General Assembly the $100.4
million BSF balance and additional amounts from certain other funds were
transferred late in the FY to the GRF, and adjustments made in the timing of
certain tax payments. Other administrative revenue and spending actions
resolved the remaining imbalance.

A significant GRF shortfall (approximately $520 million) was then projected
for the next year, FY 1993. It was addressed by appropriate legislative and
administrative actions. The Governor ordered, effective July 1, 1992, $300
million in selected GRF spending reductions. Subsequent executive and
legislative actions in December 1992 -- a combination of tax revisions and
additional spending reductions -- resulted in a balance of GRF resources and
expenditures for the 1992-93 biennium. The June 30, 1993 ending GRF fund
balance was approximately $111 million, of which as a first step to BSF
replenishment, $21 million was deposited in the BSF. (Based on June 30, 1994
balances, an additional $260 million has been deposited in the BSF, which has a
current balance of $28 million.)

No spending reductions were applied to appropriations needed for debt
service on or lease rentals relating to any State obligations.

The GRF appropriations act for the current 1994-95 biennium was passed and
signed by the Governor on July 1, 1993. It included all necessary GRF
appropriations for State debt service and lease rental payments then projected
for the biennium.

The State's incurrence or assumption of debt without a vote of the people
is, with limited exceptions, prohibited by current State constitutional
provisions. The State may incur debt, limited in amount to $750,000, to cover
casual deficits or failures in revenues or to meet expenses not otherwise
provided for. The Constitution expressly precludes the State from assuming the
debts of any local government or corporation. (An exception is made in both
cases for any debt incurred to repel invasion, suppress insurrection or defend
the State in war.)

By 13 constitutional amendments, the last adopted in 1993, Ohio voters have
authorized the incurrence of State debt and the pledge of taxes or excises to
its payment. At March 24, 1995, $790.1 million (excluding certain highway bonds
payable primarily from highway use charges) of this debt was outstanding. The
only such State debt then still authorized to be incurred are portions of the
highway bonds, and the following: (a) up to $100 million of obligations for
coal research and development may be outstanding at any one time ($34.7 million
outstanding); (b) $360 million of obligations authorized for local
infrastructure improvements, no more than $120 million of which may be issued in
any calendar year ($728.2 million outstanding or awaiting delivery); and (c) up
to $200 million in general obligation bonds for parks, recreation and natural
resources purposes which may be outstanding at any one time ($20 million
outstanding, with no more than $50 million to be issued in any one year).

Resolutions have been introduced in both houses of the General Assembly
that would submit at the November 1995 election a constitutional amendment
relating to State debt. The amendment would authorize, among other things, the
issuance of State general obligation debt for a variety of purposes and without
additional vote of the people to the extent that debt service on all State
general obligation debt and GRF-supported obligations would not exceed 5% of the
preceding fiscal year's GRF expenditures.

<PAGE>

It cannot be predicted whether any such amendment will in fact be submitted, or,
if submitted, whether it would be approved by the electors.

The Constitution also authorizes the issuance of State obligations for
certain purposes, the owners of which do not have the right to have excises or
taxes levied to pay debt service. Those special obligations include obligations
issued by the Ohio Public Facilities Commission and the Ohio Building Authority,
and certain obligations issued by the State Treasurer, over $4.5 billion of
which were outstanding at March 24, 1995.

A 1990 constitutional amendment authorizes greater State and political
subdivision participation (including financing) in the provision of housing.
The General Assembly may for that purpose authorize the issuance of State
obligations secured by a pledge of all or such portion as it authorizes of State
revenues or receipts (but not by a pledge of the State's full faith and credit).

A 1994 constitutional amendment pledges the full faith and credit and
taxing power of the State to meeting certain guarantees under the State's
tuition credit program which provides for purchase of tuition credits, for the
benefit of State residents, guaranteed to cover a specified amount when applied
to the cost of higher education tuition. (A 1965 constitutional provision that
authorized student loan guarantees payable from available State moneys has never
been implemented, apart from a "guaranteed fund" approach funded essentially
from program revenues.)

State and local agencies issue obligations that are payable from revenues
from or relating to certain facilities (but not from taxes). By judicial
interpretation, these obligations are not "debt" within constitutional
provisions. In general, payment obligations under lease-purchase agreements of
Ohio public agencies (in which certificates of participation may be issued) are
limited in duration to the agency's fiscal period, and are renewable only upon
appropriations being made available for the subsequent fiscal period.

Local school districts in Ohio receive a major portion (state-wide
aggregate in the range of 46% in recent years) of their operating moneys from
State subsidies, but are dependent on local property taxes, and in 109 districts
from voter-authorized income taxes, for significant portions of their budgets.
Litigation, similar to that in other states, is pending questioning the
constitutionality of Ohio's system of school funding. The trial court recently
concluded that aspects of the system (including basic operating assistance) are
unconstitutional, and ordered the State to provide for and fund a system
complying with the Ohio Constitution. The State has appealed. A small number
of the State's 612 local school districts have in any year required special
assistance to avoid year-end deficits. A current program provides for school
district cash need borrowing directly from commercial lenders, with diversion of
State subsidy distributions to repayment if needed. Borrowings under this
program totalled $68.6 million for 44 districts (including $46.6 million for one
district) in FY 1992, $94.5 million for 27 districts (including $75 million for
one) in FY 1993, and $15.6 million for 28 districts in FY 1994.

Ohio's 943 incorporated cities and villages rely primarily on property and
municipal income taxes for their operations. With other subdivisions, they also
receive local government support and property tax relief moneys distributed by
the State. For those few municipalities that on occasion have faced significant
financial problems, there are statutory procedures for a joint State/local
commission to monitor the municipality's fiscal affairs and for development of a
financial plan to eliminate deficits and cure any defaults. Since inception in
1979, these procedures have been applied to 23 cities and villages; for 18 of
them the fiscal situation was resolved and the procedures terminated.

<PAGE>

At present the State itself does not levy ad valorem taxes on real or
tangible personal property. Those taxes are levied by political subdivisions
and other local taxing districts. The Constitution has since 1934 limited to 1%
of true value in money the amount of the aggregate levy (including a levy for
unvoted general obligations) of property taxes by all overlapping subdivisions,
without a vote of the electors or a municipal charter provision, and statutes
limit the amount of that aggregate levy to 10 mills per $1 of assessed valuation
(commonly referred to as the "ten-mill limitation"). Voted general obligations
of subdivisions are payable from property taxes that are unlimited as to amount
or rate.

RISK FACTORS FOR THE PENNSYLVANIA SERIES. Pennsylvania may incur debt to
rehabilitate areas affected by disaster, debt approved by the electorate, debt
for certain capital projects (for projects such as highways, public
improvements, transportation assistance, flood control, redevelopment
assistance, site development and industrial development) and tax anticipation
debt payable in the fiscal year of issuance. Pennsylvania had outstanding
general obligation debt of $5,075.8 million at June 30, 1994. Pennsylvania is
not permitted to fund deficits between fiscal years with any form of debt. All
year-end deficit balances must be funded within the succeeding fiscal year's
budget. At November 29, 1994, all outstanding general obligation bonds of
Pennsylvania were rated AA- by S&P and A1 by Moody's (see Appendix A). There
can be no assurance that the current ratings will remain in effect in the
future. The PENNSYLVANIA SERIES assumes no obligation to update this rating
information. Over the five-year period ending June 30, 1999, Pennsylvania has
projected that it will issue bonds totaling $2,293 million and retire bonded
debt in the principal amount of $2,448 million. Certain agencies created by
Pennsylvania have statutory authorization to incur debt for which Pennsylvania
appropriations to pay debt service thereon is not required. As of June 30,
1994, total combined debt outstanding for these agencies was $5,995.3 million.
The debt of these agencies is supported by assets of, or revenues derived from,
the various projects financed and is not an obligation of Pennsylvania. Some of
these agencies, however, are indirectly dependent on Pennsylvania
appropriations. The only obligations of agencies in Pennsylvania that bear a
moral obligation of Pennsylvania are those issued by the Pennsylvania Housing
Finance Agency ("PHFA"), a state-created agency which provides housing for lower
and moderate income families, and The Hospitals and Higher Education Facilities
Authority of Philadelphia (the "Hospital Authority"), an agency created by the
City of Philadelphia to acquire and prepare various sites for use as
intermediate care facilities for the mentally retarded. As of June 30, 1994,
PHFA has $1,985 million of revenue bonds and notes outstanding.

Numerous local government units in Pennsylvania issue general obligations
(I.E., backed by taxing power) debt, including counties, cities, boroughs,
townships and school districts. School district obligations are supported
indirectly by Pennsylvania. The issuance of non-electoral general obligation
debt is limited by constitutional and statutory provision. Electoral debt,
I.E., that approved by the voters, is unlimited. In addition, local government
units and municipal and other authorities may issue revenue obligations that are
supported by the revenues generated from particular projects or enterprises.
Examples include municipal authorities (frequently operating water and sewer
systems), municipal authorities formed to issue obligations benefitting
hospitals and educational institutions, and industrial development authorities,
whose obligations benefit industrial or commercial occupants. In some cases,
sewer or water revenue obligations are guaranteed by taxing bodies and have the
credit characteristics of general obligation debt.

Pennsylvania historically has been identified as a heavy industry state,
although that reputation has changed with the decline of the coal, steel and
railroad industries and the resulting diversification of Pennsylvania's
industrial composition. The major new sources of growth are in the service
sector, including trade, medical and health services, education and financial
institutions. Manufacturing has fallen

<PAGE>

behind both the services sector and the trade sector as the largest single
source of employment in Pennsylvania. Since 1984, employment in Pennsylvania
has grown by approximately 10%, while employment for the Middle Atlantic region
and for the United States for the same period has grown by approximately 5% and
17%, respectively. Pennsylvania's average annual unemployment rate for the
years 1988, 1989 and 1990 remained slightly below the nation's annual average
unemployment rate, and Pennsylvania's average annual unemployment rate for the
years 1991, 1992 and 1993 remained slightly above the nation's annual average
unemployment rate. The seasonally adjusted unemployment rate for Pennsylvania
for October, 1994 was 6.0% compared to 5.8% for the United States. The
unadjusted unemployment rate for Pennsylvania and the United States for
February, 1995 was 5.6% and 5.4%, respectively. The population of Pennsylvania,
12,096 million people as of July 1, 1994, according to the U.S. Bureau of the
Census, represents an increase from the July 1, 1985 estimate of 11,772 million.
Per capita income in Pennsylvania for calendar 1993 of $21,352 was higher than
the per capita income of the United States of $20,817. Pennsylvania's General
Fund, which receives all tax receipts and most other revenues and through which
debt service on all general obligations of Pennsylvania are made, closed fiscal
years ended June 30, 1991, June 30, 1992 and June 30, 1993 with fund balances of
negative $980,936, positive $87,455 and positive $698,945, respectively.

RISK FACTORS FOR THE VIRGINIA SERIES. The Commonwealth of Virginia has had
a tradition of low debt, and a large proportion of its general obligation bonds
has been supported by particular revenue-producing projects. However, a trend
toward more use of non-general obligation debt, which is not subject to
constitutional limits on borrowing, is now changing the Commonwealth's debt
profile. In recent years, the Commonwealth has expended its limited obligation
borrowing through various financing vehicles such as the Virginia Public
Building Authority, the Virginia College Building Authority and a substantial
transportation bonding program to which certain increases in retail sales and
motor vehicle-related taxes enacted in 1986 are dedicated. In 1991, the
Virginia Supreme Court in a case known as the DYKES DECISION, on a split vote
upheld on rehearing, the ability of counties to enter into obligations which
were "subject to appropriation" and confirmed that such obligations were not to
be considered as "debts" under the Virginia Constitution.

While the Commonwealth has had a long history of sound financial
operations, variations of a cyclical nature have occurred during the past
several years. Since the Virginia Constitution requires a balanced budget, the
1994-96 biennium budget, as adopted by the Virginia General Assembly at its 1994
session, reflected spending cuts, deferrals and fund transfers (principally from
state lottery proceeds) to accommodate anticipated sluggish revenue growth. The
Commonwealth concluded the fiscal year ending June 30, 1994 with a surplus of
$185.3 million (on an accrual basis). The recent 1995 session of the General
Assembly amended the budget by providing for additional spending cuts in order
to adjust to a projected budget shortfall for the fiscal year ending June 30,
1995 (on a cash basis). There have been no provisions in the Commonwealth's
budget for general tax increases. In November, 1992, voters approved a bond
referendum for approximately $613 million in general obligation bonds
principally for higher education, mental health and parks and recreation capital
needs, of which amount $200 million was issued during Fiscal Year 1993 and $219
million in November 1994.

The general fund is the Commonwealth's major operating fund and accounts
for about half of Commonwealth expenditures. It covers all functions except
highways and Federal grant disbursements, for which there are special revenue
funds.

<PAGE>

Virginia's economy is generally affected by economic trends throughout the
country and in the Mid-Atlantic region, and it is particularly influenced by
Federal civilian and military installations and the growth of suburban
communities around Washington, D.C. Also significant to the economy of Virginia
are manufacturing (such as electronic equipment, shipbuilding and chemical
products), minerals (chiefly coal), service sector occupations (including
banking and insurance), agriculture and tourism. Unemployment rates are
typically below the national average, but because of a large military and
civilian government employment component, and the related civilian employment,
the expected substantial decrease in defense or other governmental spending is
expected to depress Virginia's economic growth rates below those of the nation
at large and could have a material adverse effect on both the unemployment rate
and the economy of the Commonwealth in general.

DIRECTORS OR TRUSTEES AND OFFICERS

The following table lists the Directors or Trustees and executive officers
of the Funds, their business address and principal occupations during the past
five years. Unless otherwise noted, an individual's business address is 95 Wall
Street, New York, New York 10005.

GLENN O. HEAD*+, President and Director or Trustee. Chairman of the Board,
Director and Treasurer, Administrative Data Management Corp. ("ADM"); Chairman
of the Board and Director, FIMCO, Executive Investors Management Company, Inc.
("EIMCO"), First Investors Corporation ("FIC"), Executive Investors Corporation
("EIC") and First Investors Consolidated Corporation ("FICC").

JAMES J. COY, Director or Trustee, 90 Buell Lane, East Hampton, NY 11937.
Retired; formerly Senior Vice President, James Talcott, Inc. (financial
institution).

ROGER L. GRAYSON*, Director or Trustee. Director, FIC and FICC; President and
Director, First Investors Resources, Inc.; Commodities Portfolio Manager.

KATHRYN S. HEAD*+, Director or Trustee, 10 Woodbridge Center Drive, Woodbridge,
NJ 07095. President, FICC and FIMCO; Vice President, Chief Financial Officer
and Director, FIC and EIC; President and Director, First Financial Savings
Bank, S.L.A.; Chief Financial Officer, ADM.

F. WILLIAM ORTMAN, JR., Director or Trustee, 50 B Cambridge Circle, Lakehurst,
NJ 08723. Retired; formerly Management Consultant.

REX R. REED, Director or Trustee, 76 Keats Way, Morristown, NJ 07960. Retired;
formerly Senior Vice President, American Telephone & Telegraph Company.

HERBERT RUBINSTEIN, Director or Trustee, 145 Elm Drive, Roslyn, NY 11576.
Retired; formerly President, Belvac International Industries, Ltd.; President,
Central Dental Supply.

JOHN T. SULLIVAN*, Director or Trustee and Chairman of the Board; Director,
FIMCO, FIC, FICC and ADM; Of Counsel, Hawkins, Delafield & Wood, Attorneys.

<PAGE>

ROBERT F. WENTWORTH, Director or Trustee, RR1, Box 2554, Upland Downs Road,
Manchester Center, VT 05255. Retired; formerly financial and planning
executive with American Telephone & Telegraph Company.

JOSEPH I. BENEDEK, Treasurer, 10 Woodbridge Center Drive, Woodbridge, NJ 07095.
Treasurer, FIC, FIMCO, EIMCO and EIC.

CONCETTA DURSO, Vice President and Secretary. Vice President, FIMCO, EIMCO and
ADM; Assistant Vice President and Assistant Secretary, FIC.

CLARK D. WAGNER, Vice President. Vice President, Executive Investors Trust,
First Investors Insured Tax Exempt Fund, Inc., First Investors Series Fund; Vice
President, General Electric Investment Corporation from 1988 to 1991.

CAROL LERNER BROWN, Assistant Secretary. Secretary, FIMCO, EIMCO, FIC, EIC and
ADM.

- ----------------
* These Directors or Trustees may be deemed to be "interested persons," as
defined in the 1940 Act.
+ Mr. Glenn O. Head and Ms. Kathryn S. Head are father and daughter.

All of the officers and Directors or Trustees, except for Mr. Wagner, hold
identical or similar positions with Executive Investors Trust, First Investors
Cash Management Fund, Inc., First Investors Global Fund, Inc., First Investors
Government Fund, Inc., First Investors Insured Tax Exempt Fund, Inc., First
Investors High Yield Fund, Inc., First Investors Fund For Income, Inc., First
Investors Life Series Fund, First Investors Series Fund, First Investors Series
Fund II, Inc., First Investors Special Bond Fund, Inc., First Investors
Tax-Exempt Money Market Fund, Inc. and First Investors U.S. Government Plus
Fund. Mr. Head is also an officer and/or Director of First Investors Asset
Management Company, Inc., First Investors Credit Funding Corporation, First
Investors Leverage Corporation, First Investors Realty Company, Inc., First
Investors Resources, Inc., N.A.K. Realty Corporation, Real Property Development
Corporation, Route 33 Realty Corporation, First Investors Life Insurance
Company, First Financial Savings Bank, S.L.A., First Investors Credit
Corporation and School Financial Management Services, Inc. Ms. Head is also an
officer and/or Director of First Investors Life Insurance Company, First
Investors Credit Corporation and School Financial Management Services, Inc.

Compensation to officers and interested Directors or Trustees of the Funds
are paid by the Adviser and not by the Funds. In addition, compensation to non-
interested Directors or Trustees of the Funds are currently voluntarily paid by
the Adviser.

MANAGEMENT

Investment advisory services to each Series are provided by First Investors
Management Company, Inc. pursuant to separate Investment Advisory Agreements
(each, an "Advisory Agreement") dated June 13, 1994. Each Advisory Agreement
was approved by the Board of Directors or Trustees of the applicable Fund,
including a majority of the Directors or Trustees who are not parties to such
Fund's Advisory Agreement or "interested persons" (as defined in the 1940 Act)
of any such party ("Independent Directors

<PAGE>

or Trustees"), in person at a meeting called for such purpose and by a majority
of the public shareholders of the applicable Series.

Pursuant to each Advisory Agreement, FIMCO shall supervise and manage each
Series' investments, determine each Series' portfolio transactions and supervise
all aspects of each Series' operations, subject to review by the applicable
Fund's Directors or Trustees. Each Advisory Agreement also provides that FIMCO
shall provide the applicable Series with certain executive, administrative and
clerical personnel, office facilities and supplies, conduct the business and
details of the operation of such Series and assume certain expenses thereof,
other than obligations or liabilities of such Series. Each Advisory Agreement
may be terminated, with respect to a Series, at any time without penalty by the
applicable Fund's Directors or Trustees or by a majority of the outstanding
voting securities of such Series, or by FIMCO, in each instance on not less than
60 days' written notice, and shall automatically terminate in the event of its
assignment (as defined in the 1940 Act). Each Advisory Agreement also provides
that it will continue in effect, with respect to a Series, for a period of over
two years only if such continuance is approved annually either by the applicable
Fund's Directors or Trustees or by a majority of the outstanding voting
securities of such Series, and, in either case, by a vote of a majority of that
Fund's Independent Directors or Trustees voting in person at a meeting called
for the purpose of voting on such approval.

Under each Advisory Agreement, each Series pays the Adviser an annual fee,
paid monthly, according to the following schedule:

Annual
Average Daily Net Assets Rate
- ------------------------ ------

Up to $250 million . . . . . . . . . . . . . . . . . . . . . . . . . . 0.75%
In excess of $250 million up to $500 million . . . . . . . . . . . . . 0.72
In excess of $500 million up to $750 million . . . . . . . . . . . . . 0.69
Over $750 million. . . . . . . . . . . . . . . . . . . . . . . . . . . 0.66

The SEC staff takes the position that fees of 0.75% or greater are higher than
those paid by most investment companies.

Pursuant to certain state regulations, the Adviser has agreed to reimburse
a Series if and to the extent that Series' aggregate operating and management
expenses, including advisory fees but generally excluding interest, taxes,
brokerage commissions and extraordinary expenses, exceed any limitation on
expenses applicable to that Series for any full fiscal year (unless a waiver of
such expense limitation is obtained). The amount of any such reimbursement is
limited to the amount of the advisory fees paid or accrued to the Adviser for
the fiscal year. For the fiscal year ended December 31, 1994, no reimbursement
was required pursuant to these regulations.

The Adviser has an Investment Committee composed of George V. Ganter,
Margaret Haggerty, Glenn O. Head, Nancy W. Jones, Patricia D. Poitra, Ronald
Rolleri, Clark D. Wagner and John Tomasulo. The Committee usually meets weekly
to discuss the composition of the portfolio of each Fund and to review additions
to and deletions from the portfolios.

<PAGE>

For the fiscal years ended December 31, 1992, 1993 and 1994 NEW YORK
INSURED'S advisory fees were $1,297,848, $1,489,284 and $1,526,855,
respectively. For the fiscal years ended December 31, 1992, 1993 and 1994, the
advisory fees for each Series of MULTI-STATE INSURED were as follows:

FISCAL YEAR ENDED FISCAL YEAR ENDED FISCAL YEAR ENDED
DECEMBER 31, 1992 DECEMBER 31, 1993 DECEMBER 31, 1994
----------------------- ----------------------- -----------------------
ADVISORY ADVISORY ADVISORY
FEES PAID WAIVED FEES PAID WAIVED FEES PAID WAIVED
--------- ------ --------- ------ -------- ------
<S> <C> <C> <C> <C> <C> <C>

ARIZONA SERIES $ -0- 25,760 $ -0- $ 50,845 $8,856 $57,074
CALIFORNIA SERIES 49,001 52,089 81,670 40,835 81,473 40,737
COLORADO SERIES* -0- 3,320 -0- 14,252 -0- 22,258
CONNECTICUT SERIES -0- 59,084 57,991 50,742 63,996 55,997
FLORIDA SERIES -0- 74,147 17,168 111,593 37,734 119,394
GEORGIA SERIES** -0- 1,216 -0- 6,462 -0- 12,122
MARYLAND SERIES -0- 19,624 -0- 38,038 -0- 51,149
MASSACHUSETTS SERIES 67,659 71,626 110,362 55,181 110,003 55,002
MICHIGAN SERIES 63,411 65,574 128,246 64,123 151,201 75,601
MINNESOTA SERIES 10,003 28,536 36,222 18,111 19,482 38,968
MISSOURI SERIES* -0- 1,637 -0- 7,074 -0- 11,913
NEW JERSEY SERIES 197,112 165,758 362,752 90,624 361,014 90,254
NORTH CAROLINA SERIES* -0- 2,662 -0- 19,422 -0- 32,570
OHIO SERIES 28,583 57,165 71,558 62,613 77,233 67,578
OREGON SERIES* -0- 2,590 -0- 16,047 -0- 31,725
PENNSYLVANIA SERIES 50,994 101,987 94,783 137,366 173,125 86,564
VIRGINIA SERIES 26,594 73,104 84,139 73,621 94,200 82,424

<FN>
- ------------
* For the period May 4, 1992 (commencement of operations) through
December 31, 1992.
** For the period May 1, 1992 (commencement of operations) through
December 31, 1992.

</TABLE>

In addition, for the fiscal year ended December 31, 1994, the Adviser
voluntarily reimbursed the Series as follows: ARIZONA SERIES - $14,264;
COLORADO SERIES - $7,908; GEORGIA SERIES - $12,863; MARYLAND SERIES - $6,227;
MINNESOTA SERIES - $10,766; MISSOURI SERIES - $7,105; NORTH CAROLINA SERIES -
$16,091; and OREGON SERIES - $11,203.

UNDERWRITER

Each Fund has entered into an Underwriting Agreement ("Underwriting
Agreement") with First Investors Corporation ("Underwriter" or "FIC") which
requires the Underwriter to use its best efforts to sell shares of the Series.
Pursuant to each Underwriting Agreement, the Underwriter shall bear all fees and
expenses incident to the registration and qualification of the applicable
Series' shares. In addition, the Underwriter shall bear all expenses of sales
material or literature, including prospectuses and proxy materials, to the
extent such materials are used in connection with the sale of the Series'
shares, unless a Series has agreed to bear such costs pursuant to a plan of
distribution. See "Distribution Plans." Each Underwriting Agreement was
approved by the applicable Fund's Board of Directors or Trustees, including a
majority of the Independent Directors or Trustees. Each Underwriting Agreement
provides that it will continue in effect, with respect to a Series, from year to
year only so long as such continuance is specifically approved at least annually
by the applicable Fund's Board of Directors or Trustees or by a vote of a
majority of the outstanding voting securities of that Series, and in either case
by the vote of a majority of such Fund's Disinterested Directors or Trustees,
voting in person at a meeting called for the purpose of voting on such approval.
Each Underwriting Agreement will terminate automatically in the event of its
assignment.

<PAGE>

For the fiscal years ended December 31, 1992, 1993 and 1994, FIC received
underwriting fees with respect to NEW YORK INSURED of $887,128, $823,827 and
$425,087, respectively. For the same periods relating to NEW YORK INSURED, FIC
reallowed an additional $80,135, $56,733 and $30,213, respectively, to
unaffiliated dealers. For the fiscal year ended December 31, 1992, FIC received
underwriting fees with respect to all Series of MULTI-STATE INSURED of
$2,947,483. For the same period relating to all Series of MULTI-STATE INSURED,
FIC reallowed an additional $1,115,582 to unaffiliated dealers. For the fiscal
years ended December 31, 1993 and 1994, underwriting fees with respect to MULTI-
STATE INSURED were as follows:

FISCAL YEAR ENDED FISCAL YEAR ENDED
DECEMBER 31, 1993 DECEMBER 31, 1994
----------------------------------- -----------------------------------
AMOUNTS ADDITIONAL AMOUNTS AMOUNTS ADDITIONAL AMOUNTS
RECEIVED BY REALLOWED TO RECEIVED BY REALLOWED TO
FIC UNAFFILIATED DEALERS FIC UNAFFILIATED DEALERS
----------- -------------------- ----------- --------------------
<S> <C> <C> <C> <C>

ARIZONA SERIES $ 120,518 $ 39,279 $85,274 $45,361
CALIFORNIA SERIES 85,174 65,980 51,684 30,409
COLORADO SERIES 57,984 10,571 44,696 4,478
CONNECTICUT SERIES 221,231 48,428 96,040 1,882
FLORIDA SERIES 228,035 148,148 118,132 45,843
GEORGIA SERIES 40,488 10,699 30,024 677
MARYLAND SERIES 71,735 20,220 53,730 13,153
MASSACHUSETTS SERIES 212,690 23,579 94,581 3,604
MICHIGAN SERIES 163,640 234,174 109,150 169,948
MINNESOTA SERIES 52,909 39,220 15,664 5,835
MISSOURI SERIES 20,758 13,655 8,315 375
NEW JERSEY SERIES 467,063 158,856 235,885 43,823
NORTH CAROLINA SERIES 60,543 58,710 41,196 14,413
OHIO SERIES 172,496 149,611 73,355 39,102
OREGON SERIES 113,925 13,486 70,522 15,455
PENNSYLVANIA SERIES 199,051 249,214 116,174 117,846
VIRGINIA SERIES 341,464 39,621 132,302 18,947

</TABLE>

DISTRIBUTION PLANS

As stated in the Series' Prospectus, pursuant to a separate plan of
distribution for each class of shares adopted by each Fund pursuant to Rule
12b-1 under the 1940 Act ("Class A Plan" and "Class B Plan;" and, collectively,
"Plans"), each Series may reimburse or compensate, as applicable, the
Underwriter for certain expenses incurred in the distribution of that Series'
shares and the servicing or maintenance of existing Series shareholder accounts.

Each Plan was approved by the applicable Fund's Board of Directors or
Trustees, including a majority of the Independent Directors or Trustees, and by
a majority of the outstanding voting securities of the relevant class of each
Series. Each Plan will continue in effect, with respect to a Series, from year
to year as long as its continuance is approved annually be either the applicable
Fund's Board of Directors or Trustees or by a vote of a majority of the
outstanding voting securities of the relevant class of shares of that Series.
In either case, to continue, each Plan must be approved by the vote of a
majority of the Independent Directors or Trustees of the applicable Fund. Each
Fund's Board reviews quarterly and annually a written report provided by the
Treasurer of the amounts expended under the applicable Plan and the purposes
for which such expenditures were made. While each Plan is in effect, the
selection and nomination of the applicable Fund's Independent Directors or
Trustees will be committed to the discretion of such Independent Directors or
Trustees then in office.

<PAGE>

Each Plan can be terminated, with respect to a Series, at any time by a
vote of a majority of the applicable Fund's Independent Directors or Trustees or
by a vote of a majority of the outstanding voting securities of the relevant
class of shares of that Series. Any change to each Class B Plan that would
materially increase the costs to that class of shares of a Series or any
material change to each Class A Plan may not be instituted without the approval
of the outstanding voting securities of the relevant class of shares of that
Series. Such changes also require approval by a majority of the applicable
Fund's Independent Directors or Trustees.

In reporting amounts expended under the Plans to the Directors or Trustees,
FIMCO will allocate expenses attributable to the sale of each class of a Series'
shares to such class based on the ratio of sales of such class to the sales of
both classes of shares. The fees paid by one class of a Series' shares will not
be used to subsidize the sale of any other class of that Series' shares.

For the fiscal year ended December 31, 1994, NEW YORK INSURED paid $610,742
pursuant to its Class A Plan. For the fiscal year ended December 31, 1994, each
Series of MULTI-STATE INSURED paid the following amounts pursuant to their Class
A Plan: ARIZONA SERIES - $17,580; CALIFORNIA SERIES - $32,589; COLORADO SERIES
- - $5,936; CONNECTICUT SERIES - $31,998; FLORIDA SERIES - $41,901; GEORGIA SERIES
- - $3,232; MARYLAND SERIES - $13,640; MASSACHUSETTS SERIES - $44,001; MICHIGAN
SERIES - $60,481; MINNESOTA SERIES - $15,587; MISSOURI SERIES - $3,177; NEW
JERSEY SERIES - $120,338; NORTH CAROLINA SERIES - $8,684; OHIO SERIES - $38,616;
OREGON SERIES - $8,466; PENNSYLVANIA SERIES - $69,250; and VIRGINIA SERIES -
$47,100. The Underwriter incurred the following Class A Plan-related expenses
with respect to each Series during the fiscal year ended December 31, 1994:

Payments Payments to
Advertising to Sales Personnel* Underwriter**
----------- ------------------- ---------------
<S> <C> <C> <C>

NEW YORK INSURED $ 0 $ 151,310 $ 459,430
ARIZONA SERIES 0 5,455 12,125
CALIFORNIA SERIES 0 10,049 22,541
COLORADO SERIES 0 2 2,670,690
CONNECTICUT SERIES 0 12,406 19,592
FLORIDA SERIES 0 12,023 29,878
GEORGIA SERIES 0 1 1,408,862
MARYLAND SERIES 0 4,445 9,196
MASSACHUSETTS SERIES 0 19,019 24,983
MICHIGAN SERIES 0 13,537 46,944
MINNESOTA SERIES 0 3,619 11,967
MISSOURI SERIES 0 1 1,281,321
NEW JERSEY SERIES 0 46,614 73,725
NORTH CAROLINA SERIES 0 2 2,896,032
OHIO SERIES 0 12,613 26,003
OREGON SERIES 0 2 3,978,933
PENNSYLVANIA SERIES 0 10,109 59,141
VIRGINIA SERIES 0 20,060 27,040

<FN>
* Amounts paid were for service fees
** Amounts paid were for distribution fees

</TABLE>

In approving each Fund's overall system of distribution, that Fund's Board
of Directors or Trustees considered several factors, including that
implementation of the system would (1) enable investors to

<PAGE>

choose the purchasing option better suited to their individual situation,
thereby encouraging current shareholders to make additional investments in a
Series and attracting new investors and assets to that Series to the benefit
of the Series and its shareholders; (2) facilitate distribution of each Series'
shares; and (3) maintain the competitive position of each Series in relation to
other funds that have implemented or are seeking to implement similar
distribution arrangements.

In adopting the Class B Plan for each Fund, the applicable Fund's Board of
Directors or Trustees considered all the features of the distribution system,
including (1) the conditions under which a contingent deferred sales charge
("CDSC") would be imposed and the amount of such charge, (2) the advantage to
investors in having no initial sales charges deducted from a Series' purchase
payments and instead having the entire amount of their purchase payments
immediately invested in Series shares, (3) the Underwriter's belief that the
ability to receive sales commissions and service fees under the Class B Plan
would prove attractive to Representatives, resulting in greater growth of each
Series than might otherwise be the case, (4) the advantages to the shareholders
of a Series of economies of scale resulting from growth in such Series' assets,
and (5) the Underwriter's shareholder service and distribution-related expenses
and costs.

In adopting the Class A Plan for each Fund, the applicable Fund's Board of
Directors or Trustees considered all relevant information and determined that
there is a reasonable likelihood that the Class A Plan will benefit such Fund
and its shareholders. The Board of each Fund believes that the amounts spent
pursuant to that Fund's Class A Plan have assisted the relevant Series in
providing ongoing servicing to shareholders, in competing with other providers
of financial services and in promoting sales, thereby increasing the net assets
of that Series.

DETERMINATION OF NET ASSET VALUE

The municipal instruments in which each Series 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
applicable Fund's Board. The pricing service uses a computerized matrix system,
which includes considerations of security type, rating, market condition and
yield data, as well as market quotations and prices provided by market makers.

With respect to each Series, "when-issued securities" are reflected in the
assets of a Series as of the date the securities are purchased. Such
investments are valued thereafter at the mean between the most recent bid and
asked prices obtained from recognized dealers in such securities.

The Series intend not to dispose of municipal bonds which are in
significant risk of, or are in, default in the payment of principal or interest,
until the default has been cured or the principal and interest outstanding are
paid by an insurer or the issuer of any letter of credit or other guarantee
supporting such municipal bond. In its evaluation of municipal bonds for
portfolio valuation purposes, the applicable Fund's Board will consider the
value of insurance or any other type of guarantee supporting payments of
principal and interest. This will be accomplished by comparing the value of the
municipal bonds which are in significant risk of, or are in, default with other
municipal bonds of similar maturity, interest rate and type which are not in
default. This results in the applicable Fund's Board ascribing a good faith
value to the insurance or guarantee on any municipal bond which is in, or is in
significant risk of, default equal to the difference between the insured or
guaranteed security's market value and the then-prevailing market rate for
other, similar non-defaulting municipal bonds.

<PAGE>

Each Fund's Board may suspend the determination of a Series' net asset
value for the whole or any part of any period (1) during which trading on the
New York Stock Exchange ("NYSE") is restricted as determined by the Securities
and Exchange Commission ("SEC") or the NYSE is closed for other than weekend and
holiday closings, (2) during which an emergency, as defined by rules of the SEC
in respect to the U.S. market, exists as a result of which disposal by a Series
of securities owned by it is not reasonably practicable for the Series fairly to
determine the value of its net assets, or (3) for such other period as the SEC
has by order permitted.

ALLOCATION OF PORTFOLIO BROKERAGE

Each Series expects that purchases and sales of portfolio securities
generally will be principal transactions. Portfolio securities are normally
purchased directly from the issuer or from an underwriter or market maker for
the securities. There will usually be no brokerage commissions paid by the
Series for such purchases. Purchases from underwriters will include the
underwriter's commission or concession and purchases from dealers serving as
market makers will include the spread between the bid and asked price.

At times the Adviser may engage in agency transactions and, in effecting
the purchase and sale of portfolio securities for the account of each Series,
will seek best execution of trades either (1) at the most favorable and
competitive rate of commission charged by any broker or member of an exchange,
or (2) at a higher rate of commission if reasonable in relation to brokerage and
research services provided to the Series or the Adviser by such member or
broker. Such services may include, but are not limited to, any one or more of
the following: information as to the availability of securities for purchase or
sale, statistical or factual information or opinions pertaining to investments.
The Adviser may use research and services provided to it by brokers in servicing
all the funds in the First Investors Group of Funds; however, not all such
services will be used by the Adviser in connection with the Series. No
portfolio orders are placed with an affiliated broker, nor does any affiliated
broker participate in these commissions.

The Adviser may combine transaction orders placed on behalf of the Series
and any other fund in the First Investors Group of Funds, any series of
Executive Investors Trust and First Investors Life Insurance Company, affiliates
of the Series, for the purpose of negotiating brokerage commissions or obtaining
a more favorable transaction price; and where appropriate, securities purchased
or sold may be allocated, in terms of price and amount, to the Series according
to the proportion that the size of the transaction order actually placed by the
Series bears to the aggregate size of the transaction orders simultaneously made
by other participants in the transaction. Each Fund's Board of Directors or
Trustees has authorized and directed the Adviser to use dealer concessions
available in fixed-price underwritings of municipal bonds to pay for research
services which are beneficial in the management of each Series' portfolio. The
Series did not pay brokerage commissions for the fiscal years ending
December 31, 1991, 1992 and 1993.

REDUCED SALES CHARGES, ADDITIONAL EXCHANGE AND
REDEMPTION INFORMATION AND OTHER SERVICES

<PAGE>

Prospectus (singularly, "Eligible Fund" and, collectively, "Eligible Funds").
Shares of First Investors Special Bond Fund, Inc., First Investors Life Series
Fund and First Investors U.S. Government Plus Fund are not deemed to be Eligible
Funds. Shares of the Money Market Funds, unless otherwise noted, are not deemed
to be Eligible Funds. Class A shares of each series of Executive Investors
Trust are deemed to be Eligible Funds if such shares have either (a) been
acquired through an exchange from an Eligible Fund which imposes a maximum
sales charge of 6.25%, or (b) been held for at least one year from their date of
purchase.

REDUCED SALES CHARGES--CLASS A SHARES

Reduced sales charges are applicable to purchases made at one time of Class
A shares of any one or more of the Series or of any one or more of the Eligible
Funds by "any person," which term shall include an individual, or an individual,
his or her spouse and children under the age of 21, or a trustee or other
fiduciary of a single trust, estate or fiduciary account (including a pension,
profit-sharing or other employee benefit trust created pursuant to a plan
qualified under section 401 of the Internal Revenue Code of 1986, as amended
(the "Code")), although more than one beneficiary is involved; provided,
however, that the term "any person" shall not include a group of individuals
whose funds are combined, directly or indirectly, for the purchase of redeemable
securities of a registered investment company, nor shall it include a trustee,
agent, custodian or other representative of such a group of individuals.

Ownership of Class A and Class B shares of any Eligible Fund, except as
noted below, qualify for a reduced sales charge on the purchase of Class A
shares. Class A shares purchased at net asset value, Class A shares of the
Money Market Funds, or shares owned under a Contractual Plan are not eligible
for the purchase of Class A shares of a Series at a reduced sales charge through
a Letter of Intent or the Cumulative Purchase Privilege.

LETTER OF INTENT. Any of the eligible persons described above may, within
90 days of their investment, sign a statement of intent ("Letter of Intent") in
the form provided by the Underwriter, covering purchases of Class A shares of
any one or more of the Series and of the other Eligible Funds to be made within
a period of thirteen months, provided said shares are currently being offered to
the general public and only in those states where such shares may be legally
sold, and thereby become eligible for the reduced sales charge applicable to the
total amount purchased. A Letter of Intent filed after the date of investment
is considered retroactive to the date of investment for determination of the
thirteen-month period. The Letter of Intent is not a binding obligation on
either the investor or the Series. During the term of a Letter of Intent,
Administrative Data Management Corp. ("Transfer Agent") will hold Class A shares
representing 5% of each purchase in escrow, which shares will be released upon
completion of the intended investment.

Purchases of Class A Shares made under a Letter of Intent are made at the
sales charge applicable to the purchase of the aggregate amount of shares
covered by the Letter of Intent as if they were purchased in a single
transaction. The applicable quantity discount will be based on the sum of the
then current value at public offering price (I.E., net asset value plus
applicable sales charge) of all Class A shares and the net asset value of all
Class B shares of a Series and of the other Eligible Funds, including Class B
shares of the Money Market Funds, currently owned, together with the aggregate
offering price of purchases to be made under the Letter of Intent. If all such
shares are not so purchased, a price adjustment is made, depending upon the
actual amount invested within such period, by the redemption of sufficient Class
A shares held in escrow in the name of the investor (or by the investor paying
the

<PAGE>

commission differential). A Letter of Intent can be amended (1) during the
thirteen-month period if the purchaser files an amended Letter of Intent with
the same expiration date as the original Letter of Intent, or (2) automatically
after the end of the period, if total purchases credited to the Letter of Intent
qualify for an additional reduction in the sales charge. The Letter of Intent
privilege may be modified or terminated at any time by the Underwriter.

CUMULATIVE PURCHASE PRIVILEGE. Upon written notice to FIC, Class A shares
of a Series are also available at a quantity discount on new purchases if the
then current value at the current public offering price (I.E., net asset value
plus applicable sales charge) of all Class A shares and the net asset value of
all Class B shares of a Series and of the other Eligible Funds, including Class
B shares of the Money Market Funds, previously purchased and then owned, plus
the value of Class A shares being purchased at the current public offering
price, amount to $25,000 or more. Such quantity discounts may be modified or
terminated at any time by the Underwriter.

SYSTEMATIC WITHDRAWAL PLAN--CLASS A SHARES. Shareholders who own Class A
shares of a Series with a net asset value of at least $5,000 may establish a
Systematic Withdrawal Plan ("Withdrawal Plan") and either (a) receive monthly,
quarterly, semi-annual or annual checks for any designated amount (minimum $25);
or (b) automatically reinvest the proceeds at net asset value in the same class
of shares in any other Eligible Fund, including the Money Market Funds.
Dividends and other distributions, if any, are reinvested in additional Class A
shares of the Series. Shareholders may add shares to the Withdrawal Plan or
terminate the Withdrawal Plan at any time. Withdrawal Plan payments will be
suspended when a distributing Series has received notice of a shareholder's
death on an individual account. Payments may recommence upon receipt of written
alternate payment instructions and other necessary documents from the deceased's
legal representative. Withdrawal payments will also be suspended when a payment
check is returned to the Transfer Agent marked as undeliverable by the U.S.
Postal Service after two consecutive mailings.

The withdrawal payments derived from the redemption of sufficient shares in
the account to meet designated payments in excess of dividends and other
distributions may deplete or possibly extinguish the initial investment,
particularly in the event of a market decline, and may result in a capital gain
or loss depending on the shareholder's cost. Purchases of additional shares of
a Series concurrent with withdrawals are ordinarily disadvantageous to
shareholders because of tax liabilities and sales charges.

CONVERSION OF CLASS B SHARES. Class B Shares of a Series will
automatically convert to Class A shares of that Series, based on the relative
net asset values per share of the two classes, as of the close of business on
the first business day of the month in which the eighth anniversary of the
initial purchase of such Class B shares occurs. For these purposes, the date of
initial purchase shall mean (1) the first business day of the month in which
such Class B shares were issued, or (2) for Class B shares obtained through an
exchange or a series of exchanges, the first business day of the month in which
the original Class B shares were issued. For conversion purposes, Class B
shares purchased through the reinvestment of dividends and other distributions
paid in respect of Class B shares will be held in a separate sub-account. Each
time any Class B shares in the shareholder's regular account (other than those
in the sub-account) convert to Class A shares, a pro rata portion of the Class B
shares in the sub-account also will convert to Class A shares. The portion will
be determined by the ratio that the shareholder's Class B shares converting to
Class A shares bears to the shareholder's total Class B shares not acquired
through dividends and other distributions.

<PAGE>

The availability of the conversion feature is subject to the continuing
applicability of a ruling of the Internal Revenue Service ("IRS"), or an opinion
of counsel, that: (1) the dividends and other distributions paid on Class A and
Class B shares will not result in "preferential dividends" under the Code; and
(2) the conversion of shares does not constitute a taxable event. If the
conversion feature ceased to be available, the Class B shares of the Series
would not be converted and would continue to be subject to the higher ongoing
expenses of the Class B shares beyond eight years from the date of purchase.
FIMCO has no reason to believe that these conditions for the availability of the
conversion feature will not continue to be met.

If a Series implements any amendments to its Class A Plan that would
increase materially the costs that may be borne under such Plan by Class A
shareholders, Class B shares will stop converting into Class A shares unless a
majority of Class B shareholders, voting separately as a class, approve the
proposal.

WAIVERS OF CDSC ON CLASS B SHARES. The CDSC imposed on Class B shares does
not apply to: (a) any redemption pursuant to the tax-free return of an excess
contribution to an IRA or other qualified retirement plan if the Series is
notified at the time of such request; (b) any redemption of a lump-sum or other
distribution from qualified retirement plans or accounts provided the
shareholder has attained the minimum age of 70 1/2 years and has held the Class
B shares for a minimum period of three years; (c) any redemption by advisory
accounts managed by the Adviser or any of its affiliates or for shares held by
the Adviser or any of its affiliates; (d) any redemption by a tax-exempt
employee benefit plan if continuance of the investment would be improper under
applicable laws or regulations; and (e) any redemption or transfer of ownership
of Class B shares following the death or disability, as defined in Section
72(m)(7) of the Code, of a shareholder if the Series is provided with proof of
death or disability and with all documents required by the Transfer Agent within
one year after the death or disability. For more information on what specific
documents are required, call Shareholder Services at 1-800-423-4026.

TELEPHONE TRANSACTIONS. As stated in the Series' Prospectus, the Series,
the Underwriter and their affiliates will not be liable for any loss, damage,
cost or expense arising out of any instruction (or any interpretation of such
instruction) received by telephone which they reasonably believe to be
authentic. In acting upon telephone instructions, these parties use procedures
which are reasonably designed to ensure that such instructions are genuine, such
as (1) obtaining some or all of the following information: account number;
name(s) and social security number registered to the account; and personal
identification; (2) recording all telephone transactions; and (3) sending
written confirmation of each transaction to the registered owner.

TAXES

In order to continue to qualify for treatment as a regulated investment
company ("RIC") under the Code, a Series -- each Series being treated as a
separate entity for these purposes -- must distribute to its shareholders for
each taxable year at least 90% of the sum its investment company taxable income
(consisting generally of taxable net investment income and net short-term
capital gain) plus its net interest income excludable from gross income under
section 103(a) of the Code ("Distribution Requirement") and must meet several
additional requirements. For each Series these requirements include the
following: (1) the Series must derive at least 90% of its gross income each
taxable year from dividends, interest, payments with respect to securities loans
and gains from the sale or other disposition of securities, or other

<PAGE>

income (including gains from options or futures) derived with respect to its
business of investing in securities ("Income Requirement"); (2) the Series must
derive less than 30% of its gross income each taxable year from the sale or
other disposition of securities, options or futures that were held for less than
three months ("Short-Short Limitation"); (3) at the close of each quarter of the
Series' taxable year, at least 50% of the value of its total assets must be
represented by cash and cash items, U.S. Government securities, securities of
other RICs and other securities, with those other securities limited, in respect
of any one issuer, to an amount that does not exceed 5% of the value of the
Series' total assets; and (4) at the close of each quarter of the Series'
taxable year, not more than 25% of the value of its total assets may be invested
in securities (other than U.S. Government securities or the securities of other
RICs) of any one issuer.

Dividends paid by a Series will qualify as exempt-interest dividends as
defined in their Prospectuses, and thus will be excludable from gross income for
Federal tax purposes by its shareholders, if the Series satisfies the additional
requirement that, at the close of each quarter of its taxable year, at least 50%
of the value of its total assets consists of securities the interest on which is
excludable from gross income under section 103(a); each Series intends to
continue to satisfy this requirement. The aggregate dividends excludable from a
Series' shareholder's gross income may not exceed the Series' net tax-exempt
income. The shareholders' treatment of dividends from a Series under state and
local income tax laws may differ from the treatment thereof under the Code.
Investors should consult their tax adviser concerning this matter.

Dividends and other distributions declared by a Series in October, November
or December of any year and payable to shareholders of record on a date in any
of those months are deemed to have been paid by the Series and received by the
shareholders on December 31 of that year if the distributions are paid by the
Series during the following January. Accordingly, those distributions will be
reported by shareholders for the year in which that December 31 falls.

Each Series will be subject to a nondeductible 4% excise tax to the extent
it fails to distribute by the end of any calendar year substantially all of its
ordinary (taxable) income for that year and capital gain net income for the one-
year period ending on October 31 of that year, plus certain other amounts.

If shares of a Series are sold at a loss after being held for six months or
less, the loss will be disallowed to the extent of any exempt-interest dividends
received on those shares, and the portion of the loss that is not disallowed, if
any, will be treated as long-term, instead of short-term, capital loss to the
extent of any capital gain distributions received on those shares.

Tax-exempt interest attributable to certain private activity bonds ("PABs")
(including, in the case of a Series receiving interest on such bonds, a
proportionate part of the exempt-interest dividends paid by that Series) is an
item of tax preference for purposes of the alternative minimum tax. Exempt-
interest dividends received by a corporate shareholder also may indirectly be
subject to the alternative minimum tax without regard to whether the Series'
tax-exempt interest was attributable to such bonds. Entities or other persons
who are "substantial users" (or persons related to "substantial users") of
facilities financed by PABs or industrial development bonds ("IDBs") should
consult their tax advisers before purchasing shares of any Series because, for
users of certain of these facilities, the interest on such bonds is not exempt
from Federal income tax. For these purposes, the term "substantial user" is
defined generally to include a "non-exempt person" who regularly uses in trade
or business a part of a facility financed from the proceeds of PABs or IDBs.

<PAGE>

Up to 85% of social security and certain railroad retirement benefits may
be included in taxable income for recipients whose modified adjusted gross
income (which includes income from tax-exempt sources such as the Series) plus
50% of their benefits exceeds certain base amounts. Exempt-interest dividends
from the Series still are tax-exempt to the extent described in the
Prospectuses; they are only included in the calculation of whether a recipient's
income exceeds the established amounts.

Each Series may acquire zero coupon municipal securities issued with
original issue discount. As the holder of those securities, a Series must
include in its income the original issue discount that accrues on the securities
during the taxable year, even if the Series receives no corresponding payment on
the securities during the year. Because each Series annually must distribute
substantially all of its net tax-exempt income, including any original issue
discount on Municipal Instruments, to satisfy the Distribution Requirement, it
may be required in a particular year to distribute as a dividend an amount that
is greater than the total amount of cash it actually receives. Those
distributions will be made from a Series' cash assets or from the proceeds of
sales of portfolio securities, if necessary. A Series may realize capital gains
or losses from those sales, which would increase or decrease its investment
company taxable income and/or net capital gain (the excess of net long-term
capital gain over net short-term capital loss). In addition, any such gains may
be realized on the disposition of securities held for less than three months.
Because of the Short-Short Limitation, any such gains would reduce the Series'
ability to sell other securities or options or futures held for less than three
months that it might wish to sell in the ordinary course of its portfolio
management.

Each Series may invest in municipal bonds that are purchased, generally not
on their original issue, with market discount (that is, at a price less than the
principal amount of the bond or, in the case of a bond that was issued with
original issue discount, a price less than the amount of the issue price plus
accrued original issue discount) ("municipal market discount bonds"). Gain on
the disposition of a municipal market discount bond purchased by a Series after
April 30, 1993 (other than a bond with a fixed maturity date within one year
from its issuance), generally is treated as ordinary (taxable) income, rather
than capital gain, to the extent of the bond's accrued market discount at the
time of disposition. Market discount on such a bond generally is accrued
ratably, on a daily basis, over the period from the acquisition date to the date
of maturity. In lieu of treating the disposition gain as above, a Series may
elect to include market discount in its gross income currently, for each taxable
year to which it is attributable.

If a Series invests in any instruments that generate taxable income,
distributions of the interest earned thereon will be taxable to the Series'
shareholders as ordinary income to the extent of its earnings and profits.
Moreover, if a Series realizes capital gain as a result of market transactions,
any distributions of such gain will be taxable to its shareholders. There also
may be collateral Federal income tax consequences regarding the receipt of
exempt-interest dividends by shareholders such as S corporations, financial
institutions and property and casualty insurance companies. A shareholder
falling into any such category should consult its tax adviser concerning its
investment in shares of the Series.

The use of hedging strategies, such as selling and purchasing options and
futures contracts, involves complex rules that will determine for income tax
purposes the character and timing of recognition of the gains and losses a
Series realizes in connection therewith. Income from transactions in options
and futures contracts derived by a Series with respect to its business of
investing in securities will qualify as permissible income under the Income
Requirement. However, income from a Series' disposition of options and futures
contracts will be subject to the Short-Short Limitation if they are held for
less than three months.

<PAGE>

If a Series satisfies certain requirements, then any increase in value of a
position that is part of a "designated hedge" will be offset by any decrease in
value (whether realized or not) of the offsetting hedging position during the
period of the hedge for purposes of determining whether the Series satisfies the
Short-Short Limitation. Thus, only the net gain (if any) from the designated
hedge will be included in gross income for purposes of that limitation. Each
Series intends that, when it engages in hedging strategies, it will qualify for
this treatment, but at the present time it is not clear whether this treatment
will be available for all of the Series' hedging transactions. To the extent
this treatment is not available, a Series may be forced to defer the closing out
of certain options or futures contracts beyond the time when it otherwise would
be advantageous to do so, in order for the Series to continue to qualify as a
RIC.

PERFORMANCE INFORMATION

A Series may advertise its performance in various ways.

Each Series' "average annual total return" ("T") is an average annual
compounded rate of return. The calculation produces an average annual total
return for the number of years measured. It is the rate of return based on
factors which include a hypothetical initial investment of $1,000 ("P" in the
formula below) over a number of years ("n") with an Ending Redeemable Value
("ERV") of that investment, according to the following formula:

T=[(ERV/P)(1/n)]-1

The "total return" uses the same factors, but does not average the rate of
return on an annual basis. Total return is determined as follows:

[ERV-P]/P = TOTAL RETURN

Total return is calculated by finding the average annual change in the
value of an initial $1,000 investment over the period. In calculating the
ending redeemable value for Class A shares, each Series will deduct the maximum
sales charge of 6.25% (as a percentage of the offering price) from the initial
$1,000 payment and, for Class B shares, the applicable CDSC imposed on a
redemption of Class B shares held for the period is deducted. All dividends and
other distributions are assumed to have been reinvested at net asset value on
the initial investment ("P").

Return information may be useful to investors in reviewing a Series'
performance. However, certain factors should be taken into account before using
this information as a basis for comparison with alternative investments. No
adjustment is made for taxes payable on distributions. Return will fluctuate
over time and return for any given past period is not an indication or
representation by a Series of future rates of return on its shares. At times,
the Adviser may reduce its compensation or assume expenses of a Series in order
to reduce the Series' expenses. Any such waiver or reimbursement would increase
the Series' return during the period of the waiver or reimbursement.

<PAGE>

Average annual total return* for the periods ended December 31, 1994 for
each Series' Class A shares** is set forth in the table below.

YEAR ENDED FIVE YEARS ENDED TEN YEARS ENDED INCEPTION*** TO
DECEMBER 31, 1994 DECEMBER 31, 1994 DECEMBER 31, 1994 DECEMBER 31, 1994
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>

NEW YORK INSURED (10.96)% 4.56% 7.52% N/A
ARIZONA SERIES (11.51) N/A N/A 5.09%
CALIFORNIA SERIES (11.98) 5.39 N/A 5.41
COLORADO SERIES (11.65) N/A N/A 2.83
CONNECTICUT SERIES (12.57) N/A N/A 4.46
FLORIDA SERIES (11.33) N/A N/A 5.31
GEORGIA SERIES (10.64) N/A N/A 2.79
MARYLAND SERIES (11.52) N/A N/A 4.97
MASSACHUSETTS SERIES (11.21) 5.39 N/A 5.56
MICHIGAN SERIES (12.21) 5.71 N/A 5.97
MINNESOTA SERIES (11.78) 4.86 N/A 4.98
MISSOURI SERIES (12.03) N/A N/A 2.30
NEW JERSEY SERIES (11.86) 5.49 N/A 6.32
NORTH CAROLINA SERIES (12.31) N/A N/A 1.53
OHIO SERIES (11.77) 5.55 N/A 5.87
OREGON SERIES (12.49) N/A N/A 1.27
PENNSYLVANIA SERIES (12.18) N/A N/A 5.28
VIRGINIA SERIES (11.82) N/A N/A 5.18

<FN>
- ----------------
* All average annual total return figures reflect the maximum sales charge of
6.25%. Prior to July 1, 1993, the Series' maximum sales charge was 6.90%. In
addition, certain expenses of MULTI-STATE INSURED have been waived or reimbursed
from commencement of operations through December 31, 1994. Accordingly, average
annual total return figures are higher than they would have been had such
expenses not been waived or reimbursed.

** Performance for Class B shares is not quoted because Class B shares were
not offered for sale during these periods.

*** The inception dates for the Series are as follows: ARIZONA SERIES -
November 1, 1990; CALIFORNIA SERIES - February 23, 1987; COLORADO SERIES,
MISSOURI SERIES, NORTH CAROLINA SERIES and OREGON SERIES - May 4, 1992;
CONNECTICUT SERIES and MARYLAND SERIES - October 8, 1990; FLORIDA SERIES -
October 5, 1990; GEORGIA SERIES - May 1, 1992; MASSACHUSETTS SERIES, MICHIGAN
SERIES, MINNESOTA SERIES and OHIO SERIES - January 1, 1987; NEW JERSEY SERIES -
September 13, 1988; PENNSYLVANIA SERIES and VIRGINIA SERIES - April 30, 1990.

**** Certain expenses of MULTI-STATE INSURED have been waived or reimbursed from
commencement of operations through December 31, 1994. Accordingly, average
annual return figures are higher than they would have been had such expenses not
been waived or reimbursed.

</TABLE>

<PAGE>

Average annual total return and total return may also be based on
investment at reduced sales charge levels or at net asset value. Any quotation
of return not reflecting the maximum sales charge will be greater than if the
maximum sales charge were used. Average annual total return computed at net
asset value for the periods ended December 31, 1994 for each Series' Class A
shares* is set forth in the table below.

NEW YORK INSURED (5.03)% 5.90% 8.22% N/A
ARIZONA SERIES (5.64) N/A N/A 6.72%
CALIFORNIA SERIES (6.10) 6.75 N/A 6.27
COLORADO SERIES (5.76) N/A N/A 5.33
CONNECTICUT SERIES (6.74) N/A N/A 6.06
FLORIDA SERIES (5.39) N/A N/A 6.91
GEORGIA SERIES (4.70) N/A N/A 5.28
MARYLAND SERIES (5.59) N/A N/A 6.57
MASSACHUSETTS SERIES (5.28) 6.77 N/A 6.42
MICHIGAN SERIES (6.35) 7.08 N/A 6.83
MINNESOTA SERIES (5.93) 6.22 N/A 5.83
MISSOURI SERIES (6.19) N/A N/A 4.79
NEW JERSEY SERIES (5.99) 6.86 N/A 7.41
NORTH CAROLINA SERIES (6.46) N/A N/A 4.01
OHIO SERIES (5.91) 6.92 N/A 6.73
OREGON SERIES (6.65) N/A N/A 3.74
PENNSYLVANIA SERIES (6.31) N/A N/A 6.73
VIRGINIA SERIES (5.95) N/A N/A 6.63

<FN>
- ----------------
* Performance for Class B shares is not quoted because Class B shares were
not offered for sale during these periods.

** The inception dates for the Series are as follows: ARIZONA SERIES -
November 1, 1990; CALIFORNIA SERIES - February 23, 1987; COLORADO SERIES,
MISSOURI SERIES, NORTH CAROLINA SERIES and OREGON SERIES - May 4, 1992;
CONNECTICUT SERIES and MARYLAND SERIES - October 8, 1990; FLORIDA SERIES -
October 5, 1990; GEORGIA SERIES - May 1, 1992; MASSACHUSETTS SERIES, MICHIGAN
SERIES, MINNESOTA SERIES and OHIO SERIES - January 1, 1987; NEW JERSEY SERIES -
September 13, 1988; PENNSYLVANIA SERIES and VIRGINIA SERIES - April 30, 1990.
Certain expenses of MULTI-STATE INSURED have been waived or reimbursed from
commencement of operations through December 31, 1994. Accordingly, average
annual return figures are higher than they would have been had such expenses not
been waived or reimbursed.

</TABLE>

Yield is presented for a specified thirty-day period ("base period").
Yield is based on the amount determined by (i) calculating the aggregate amount
of dividends and interest earned by a Series during the base period less
expenses accrued for that period (net of reimbursement), and (ii) dividing that
amount by the product of (A) the average daily number of shares of the Series
outstanding during the base period and entitled to receive dividends and (B) the
per share maximum public offering price for Class A shares or the net asset
value for Class B shares of the Series on the last day of the base period. The
result is annualized by compounding on a semi-annual basis to determine the
Series' yield. For this calculation, interest earned on debt obligations held
by the Series is generally calculated using the yield to maturity (or first
expected call date) of such obligations based on their market values (or, in the
case of receivables-backed securities such as GNMA Certificates, based on cost).
Dividends on equity securities are accrued daily at their estimated stated
dividend rates.

Tax-equivalent yield during the base period may be presented in one or more
stated tax brackets. Tax-equivalent yield is calculated by adjusting a Series'
tax-exempt yield by a factor designed to show

<PAGE>

the approximate yield that a taxable investment would have to earn to produce an
after-tax yield equal to the Series' tax-exempt yield.

To calculate a taxable bond yield which is equivalent to a tax-exempt bond
yield (for Federal tax purposes), shareholders may use the following formula:

Tax Free Yield
-------------------- = Taxable Equivalent Yield
1 - Your Tax Bracket

To calculate a taxable bond yield which is equivalent to a tax-exempt bond
yield (for state and Federal tax purposes), shareholders may use the following
formula:

Tax Free Yield
---------------------------------- = Taxable Equivalent Yield
1 - [[(1-Your Federal Tax Bracket)
x State Rate]
+ Your Federal Tax Bracket]

The yield and tax-equivalent yield* for each Series' Class A shares** for
the thirty days ended December 31, 1994 (assuming a Federal tax rate of 36% as
well as the maximum rate for the appropriate state) are as follows:

YIELD TAX-EQUIVALENT YIELD
----- --------------------
<S> <C> <C>

NEW YORK INSURED 5.65% 9.58%
ARIZONA SERIES 5.44 9.14
CALIFORNIA SERIES 5.82 10.22
COLORADO SERIES 5.88 9.67
CONNECTICUT SERIES 5.37 8.79
FLORIDA SERIES 5.20 8.13
GEORGIA SERIES 5.64 9.38
MARYLAND SERIES 5.55 9.23
MASSACHUSETTS SERIES 5.47 9.71
MICHIGAN SERIES 5.30 8.68
MINNESOTA SERIES 5.42 9.26
MISSOURI SERIES 5.78 9.61
NEW JERSEY SERIES 5.36 8.97
NORTH CAROLINA SERIES 5.67 9.60
OHIO SERIES 5.40 9.12
OREGON SERIES 5.65 9.70
PENNSYLVANIA SERIES 5.43 8.73
VIRGINIA SERIES 5.37 8.90

<FN>
- ----------------

* During this period, certain expenses of MULTI-STATE INSURED have been
waived or reimbursed. Accordingly yield and tax-exempt yield figures are higher
than they would have been had such expenses not been waived or reimbursed.
During this period, the maximum Federal tax rate was 39.6%.

** Yield is not quoted for Class B shares because they were not offered for
sale during this period.

</TABLE>

The distribution rate for each Series is presented for a twelve-month
period. It is calculated by adding the dividends for the last twelve months and
dividing the sum by that Series' offering price per share at the end of that
period. The distribution rate is also calculated by using the Series' net asset
value. Distribution rate calculations do not include capital gain
distributions, if any, paid. The distribution rate for

<PAGE>

each Series' Class A shares for the twelve-month period ended December 31, 1994
calculated using both offering price and net asset value is shown below. During
the period certain expenses of the Series were waived or reimbursed.
Accordingly, distribution rates are higher than they would have been if such
expenses had not been waived or reimbursed. The distribution rates for Class B
shares are not quoted because Class B shares were not offered for sale during
this period.

DISTRIBUTION RATE CALCULATED USING
-----------------------------------
OFFERING PRICE NET ASSET VALUE
-------------- ---------------
NEW YORK INSURED 5.27% 5.62%
ARIZONA SERIES 5.41 5.77
CALIFORNIA SERIES 5.40 5.76
COLORADO SERIES 5.34 5.69
CONNECTICUT SERIES 4.94 5.26
FLORIDA SERIES 5.14 5.48
GEORGIA SERIES 4.79 5.11
MARYLAND SERIES 5.19 5.53
MASSACHUSETTS SERIES 5.37 5.72
MICHIGAN SERIES 4.98 5.31
MINNESOTA SERIES 5.37 5.73
MISSOURI SERIES 5.17 5.51
NEW JERSEY SERIES 5.14 5.49
NORTH CAROLINA SERIES 5.11 5.45
OHIO SERIES 5.15 5.49
OREGON SERIES 5.26 5.61
PENNSYLVANIA SERIES 5.04 5.38
VIRGINIA SERIES 4.88 5.21

A Series may include in advertisements and sales literature, information,
examples and statistics that illustrate the effect of taxable versus tax-free
compounding income at a fixed rate of return to demonstrate the growth of an
investment over a stated period of time resulting from the payment of dividends
and capital gains distributions in additional shares. The examples used will be
for illustrative purposes only and are not representations by any Series of past
or future yield or return.

From time to time, in reports and promotional literature, the Series may
compare their performance to, or cite the historical performance of, U.S.
Treasury bills, notes and bonds, or indices of broad groups of unmanaged
securities considered to be representative of, or similar to, the Series'
portfolio holdings, such as:

Lipper Analytical Services, Inc. ("Lipper") is a widely-recognized
independent service that monitors and ranks the performance of regulated
investment companies. The Lipper performance analysis includes the
reinvestment of capital gain distributions and income dividends but does
not take sales charges into consideration. The method of calculating total
return data on indices utilizes actual dividends on ex-dividend dates
accumulated for the quarter and reinvested at quarter end. This
calculation is at variance with SEC release 327 of August 8, 1972, which
utilizes latest 12 month dividends. The latter method is the one used by
S&P.

Morningstar Mutual Funds ("Morningstar"), a semi-monthly publication of
Morningstar, Inc. Morningstar proprietary ratings reflect historical risk-
adjusted performance and are subject to change every month. Funds with at
least three years of performance history are assigned ratings from one star
(lowest) to five stars (highest). Morningstar ratings are calculated from
the funds'

<PAGE>

three-, five-, and ten-year average annual returns (when available) and a
risk factor that reflects fund performance relative to three-month Treasury
bill monthly returns. Fund's returns are adjusted for fees and sales
loads. Ten percent of the funds in an investment category receive five
stars, 22.5% receive four stars, 35% receive three stars, 22.5% receive two
stars, and the bottom 10% receive one star.

Salomon Brothers Inc., "Market Performance," a monthly publication which
tracks principal return, total return and yield on the Salomon Brothers
Broad Investment-Grade Bond Index and the components of the Index.

Merrill Lynch, Pierce, Fenner & Smith, Inc., "Taxable Bond Indices," a
monthly corporate government index publication which lists principal,
coupon and total return on over 100 different taxable bond indices which
Merrill Lynch tracks. They also list the par weighted characteristics of
each Index.

Lehman Brothers, Inc., "The Bond Market Report," a monthly publication
which tracks principal, coupon and total return on the Lehman Govt./Corp.
Index and Lehman Aggregate Bond Index, as well as all the components of
these Indices.

The Consumer Price Index, prepared by the U.S. Bureau of Labor Statistics,
is a commonly used measure of inflation. The Index shows changes in the
cost of selected consumer goods and does not represent a return on an
investment vehicle.

From time to time, in reports and promotional literature, performance
rankings and ratings reported periodically in national financial publications
such as MONEY, FORBES, BUSINESS WEEK, BARRON'S, FINANCIAL TIMES and FORTUNE may
also be used. In addition, quotations from articles and performance ratings and
ratings appearing in daily newspaper publications such as THE WALL STREET
JOURNAL, THE NEW YORK TIMES and NEW YORK DAILY NEWS may be cited.

GENERAL INFORMATION

AUDITS AND REPORTS. The accounts of the Series are audited twice a year by
Tait, Weller & Baker, independent certified public accountants, Two Penn Center
Plaza, Philadelphia, PA, 19102-1707. Shareholders of each Series receive semi-
annual and annual reports, including audited financial statements, and a list of
securities owned.

TRANSFER AGENT. Administrative Data Management Corp., 10 Woodbridge Center
Drive, Woodbridge, NJ 07095-1198, an affiliate of FIMCO and FIC, acts as
transfer agent for the Series and as redemption agent for regular redemptions.
The fees charged to each Series by the Transfer Agent are $5.00 to open an
account; $3.00 for each certificate issued; $.65 per account per month; $10.00
for each legal transfer of shares; $.45 per account per dividend declared; $5.00
for each exchange of shares into a Series; $5.00 for each partial withdrawal or
complete liquidation; and $1.00 per account per report required by any
governmental authority. Additional fees charged to the Series by the Transfer
Agent are assumed by the Underwriter. The Transfer Agent reserves the right to
change the fees on prior notice to the Series. The $5 administrative fee for
exchange transactions into the Series, which is generally to be charged to the
shareholder, is being borne on a voluntary basis by the Series for an indefinite
period. Upon request from shareholders, the Transfer Agent will provide an
account history. For account histories

<PAGE>

covering the most recent three year period, there is no charge. The Transfer
Agent charges a $5.00 administrative fee for each account history covering the
period 1983 through 1990 and $10.00 per year for each account history covering
the period 1974 through 1982. If any communication from the Transfer Agent to a
shareholder is returned from the U.S. Postal Service marked as "Undeliverable"
two consecutive times, the Transfer Agent will cease sending any further
materials to the shareholder until the Transfer Agent is provided with a correct
address. Furthermore, if there is no known address for a shareholder for at
least one year, the Transfer Agent will charge such shareholder's account $40 to
cover the Transfer Agent's expenses in trying to locate the shareholder's
correct address. Account histories prior to 1974 will not be provided. The
Transfer Agent's telephone number is 1-800-423-4026.

The table below sets forth transfer agency fees and expenses accrued and
the amounts waived by the Transfer Agent for each Series for the fiscal year
ended December 31, 1994:

AMOUNT AMOUNT
ACCRUED WAIVED
------- ------
<S> <C> <C>

NEW YORK INSURED $ 167,766 $ -0-
ARIZONA SERIES 9,864 9,864
CALIFORNIA SERIES 10,176 -0-
COLORADO SERIES 6,357 6,357
CONNECTICUT SERIES 14,952 -0-
FLORIDA SERIES 16,280 -0-
GEORGIA SERIES 2,979 2,979
MARYLAND SERIES 12,142 3,493
MASSACHUSETTS SERIES 18,979 -0-
MICHIGAN SERIES 24,189 -0-
MINNESOTA SERIES 7,367 7,367
MISSOURI SERIES 2,797 2,797
NEW JERSEY SERIES 39,279 -0-
NORTH CAROLINA SERIES 5,047 5,047
OHIO SERIES 18,055 -0-
OREGON SERIES 7,517 7,517
PENNSYLVANIA SERIES 24,559 -0-
VIRGINIA SERIES 21,218 -0-

</TABLE>

5% SHAREHOLDERS. As of April 17, 1995, the following beneficially owned
more than 5% of the outstanding Class A shares of each of the Series listed
below:

Series % of Shares Shareholder
- ------ ----------- -----------

Arizona 6.3% Smith Barney Shearson Inc.
Mutual Funds Dept - 22nd Floor
388 Greenwich St.
New York, NY 10013

California 5.2% Susan S. Kramer, as Trustee
110 Denise Drive
Hillsborough, CA 94010

<PAGE>

Series % of Shares Shareholder
- ------ ----------- -----------

Colorado 5.0% Holly K. Strong
9625 West 18th Drive
Lakewood, CO 80215

Georgia 5.8% Evelyn Fesperman
2699 Caladium Drive
Atlanta, GA 30345

10.3% Clifford Connell and
Martha Mann
533 Villa Drive S.W.
Lilburn, GA 30247

Maryland 6.2% Dorothy B. Sigel
15107 Interlachen Drive
Silver Springs, MD 20906

Missouri 16.9% Virginia Allen Hess
4545 Wornall Road
Kansas City, MO 64111

8.8% Opal F. Mannschreck and
Maryle B. Seipel
207 Clayton
Maryville, MO 64468

As of April 17, 1995, the following beneficially owned more than 5% of the
outstanding Class B shares of each of the Series listed below:

Series % of Shares Shareholder
- ------ ----------- -----------

California 21.3% Ethel M. June, as Trustee
433 W. Green Acres Dr.
Porterville, CA 93257

Colorado 17.0% Lyle E. Honstein, as Trustee
1135 D. Big Thompson Canyon Rd.
Loveland, CO 80538

12.9% David H. Trexler, as Custodian
4081 Garnet Lane
Boulder, CO 80304

<PAGE>

Series % of Shares Shareholder
- ------ ----------- -----------

Connecticut 10.5% Antoinette B. Corr
6 Moriarty Dr.
Wilton, CT 06897

9.8% David R. Fray and
Antje Fray
58 Old North Rd.
Washington Depot, CT 06793

5.7% Stephen A. Signore and
Marie A.E. Signore
2111 Hartford Tpke.
North Haven, CT 06473

Florida 12.1% Herbert Brodlieb and
Bernice Brodlieb
8990 S. Holybrook Blvd.
Pembroke Pines, FL 33025

9.9% Donald Fowler and
Diane Fowler
1410 W. Sandpiper Circle
Pembroke Pines, FL 33026

10.1% Ronald L. Harrison and
Sharon Harrison
P.O. Box 1178
Newberry, FL 32669

12.2% Donald J. Klein
1610 Lexon Ave.
Miami Beach, FL 33139

Maryland 17.1% Arthur Michael Zettler
301 Wayne Place
Silver Springs, MD 20910

Massachusetts 5.2% Dean L. Collins and
Marcia Collins
114 Peregrine Rd.
North Abington, MA 02351

5.1% Mary M. Creighton
16 Jeanne Ave.
Brockton, MA 02401

<PAGE>

Series % of Shares Shareholder
- ------ ----------- -----------

5.3% Gerald Kortenbeutel and
Albertina Kortenbeutel
69 Pamela Jean Rd.
Seekonk, MA 02771

Michigan 6.0% Kurt Dynek
101 Newton St.
Kingsford, MI 49801

6.1% Vincenta Fowlds and
Robert W. Fowlds
21412 Lakebreeze
St. Clair Shores, MI 48082

12.2% Rodger T. Sulad and
Darlene A. Sulad
807 Park Lane
Grosse Pointe Park, MI 48230

7.2% Rex Ferrell Tower and
Kathlyn Ann Tower
8900 Golfside Ct.
Shepherd, MI 48883

New Jersey 11.8% Norma B. Brzycki and
Drew L. Brzycki
6 Madison Rd.
Elmer, N.J. 08318

New York 5.7% Frank J. Bracco and
Madeline Bracco
605 Correll Ave.
Staten Island, N.Y. 10309

6.3% David S. Brown
RD 6
Whitelaw Rd.
Box 40
Canastota, N.Y. 13032

` 9.3% William Chomsky
413 Grand St.
New York, N.Y. 10002

<PAGE>

Series % of Shares Shareholder
- ------ ----------- -----------

6.1% Anthony Ciffo
247 Bay 14th St.
Brooklyn, NY 11214

6.2% Maria Forte
11 Turner St.
Yonkers, N.Y. 10704

15.8% Robert Pollack and
Belle Pollack
30 Sandalwood Ave.
Valley Stream, N.Y. 11581

7.2% Linda M. Terrasi
201 West 11th St.
New York, N.Y. 10014

North Carolina 10.0% Abby Elizabeth Rutledge
1615 Eastwood Drive
Kannapolis, N.C. 28083

Ohio 14.2% William W. Ferrell and
Barbara Ferrell
67041 Plainfield Rd.
Belmont, OH 43718

19.9% Francis E. Papini
68263 Orchard Ave.
Bridgeport, OH 43912

Virginia 6.1% William Perry Beasley, as Trustee
7999 Fast Lane
Mechanicsville, VA 23111

22.6% Walter Lilkendey and
Christa Lilkendey
1304 Cumberland Dr.
Harrisonburg, VA 22801

7.7% Wallace M. Phillips and
Hazel L. Phillips
14752 Dyer Drive
Woodbridge, VA 22193

<PAGE>

TRADING BY PORTFOLIO MANAGERS AND OTHER ACCESS PERSONS. Pursuant to
Section 17(j) of the 1940 Act and Rule 17j-1 thereunder, each Series and the
Adviser have adopted Codes of Ethics restricting personal securities trading by
portfolio managers and other access persons of the Series. Among other things,
such persons: (a) must have all trades pre-cleared by the Adviser; (b) are
restricted from short-term trading; (c) must have duplicate statements and
transactions confirmations reviewed by a compliance officer; and (d) are
prohibited from purchasing securities of initial public offerings.

SHAREHOLDER LIABILITY. MULTI-STATE INSURED is organized as an entity known
as a "Massachusetts business trust." Under Massachusetts law, shareholders of
such a trust may, under certain circumstances, be held personally liable for the
obligations of the MULTI-STATE INSURED. The Declaration of Trust however,
contains an express disclaimer of shareholder liability for acts or obligations
of MULTI-STATE INSURED and requires that notice of such disclaimer be given in
each agreement, obligation, or instrument entered into or executed by MULTI-
STATE INSURED or its Trustees. The Declaration of Trust provides for
indemnification out of the property of MULTI-STATE INSURED of any shareholder
held personally liable for the obligations of the Trust. The Declaration of
Trust also provides that MULTI-STATE INSURED shall, upon request, assume the
defense of any claim made against any shareholder for any act or obligation of
MULTI-STATE INSURED and satisfy any judgment thereon. Thus, the risk of a
shareholder's incurring financial loss on account of shareholder liability is
limited to circumstances in which MULTI-STATE INSURED itself would be unable to
meet its obligations. The Adviser believes that, in view of the above, the risk
of personal liability to shareholders is immaterial and extremely remote. The
Declaration of Trust further provides that Trustees will not be liable for
errors of judgment or mistakes of fact or law, but nothing in the Declaration of
Trust protects a Trustee against any liability to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of his office. MULTI-
STATE INSURED may have an obligation to indemnify its Trustees and officers with
respect to litigation.

APPENDIX A
DESCRIPTION OF MUNICIPAL BOND RATINGS

STANDARD & POOR'S RATINGS GROUP

The ratings are based on current information furnished by the issuer or
obtained by S&P from other sources it considers reliable. S&P does not perform
any 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.

The ratings are based, in varying degrees, on the following considerations:

1. Likelihood of default-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;

2. Nature of and provisions of the obligation;

<PAGE>

3. Protection afforded by, 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' rights.

AAA Debt rated "AAA" has the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.

AA Debt rated "AA" has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small degree.

A Debt rated "A" has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.

BBB Debt rated "BBB" is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.

BB, B, CCC, CC, C Debt rated "BB," "B," "CCC," "CC" and "C" is regarded,
on balance, as predominantly speculative with respect to capacity to pay
interest and repay principal. "BB" indicates the least degree of speculation
and "C" the highest. While such debt will likely have some quality and
protective characteristics, these are outweighed by large uncertainties or major
risk exposures to adverse conditions.

BB Debt rated "BB" has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure
to adverse business, financial, or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. The "BB"
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied "BBB-" rating.

B Debt rated "B" has a greater vulnerability to default but currently has
the capacity to meet interest payments and principal repayments. Adverse
business, financial, or economic conditions will likely impair capacity or
willingness to pay interest and repay principal. The "B" rating category is
also used for debt subordinated to senior debt that is assigned an actual or
implied "BB" or "BB-" rating.

CCC Debt rated "CCC" has a currently identifiable vulnerability to default
and is dependent upon favorable business, financial, and economic conditions to
meet timely payment of interest and repayment of principal. In the event of
adverse business, financial or economic conditions, it is not likely to have the
capacity to pay interest and repay principal. The "CCC" rating category is also
used for debt subordinated to senior debt that is assigned an actual or implied
"B" or "B-" rating.

CC The rating "CC" typically is applied to debt subordinated to senior
debt that is assigned an actual or implied "CCC" rating.

<PAGE>

C The rating "C" typically is applied to debt subordinated to senior debt
which is assigned an actual or implied "CCC-" debt rating. The "C" rating may
be used to cover a situation where a bankruptcy petition has been filed, but
debt service payments are continued.

CI The rating "CI" is reserved for income bonds on which no interest is
being paid.

D Debt rated "D" is in payment default. The "D" 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 S&P believes that such
payments will be made during such grace period. The "D" rating also will be
used upon the filing of a bankruptcy petition if debt service payments are
jeopardized.

PLUS (+) OR MINUS (-): The ratings from "AA" to "CCC" may be modified by
the addition of a plus or minus sign to show relative standing within the major
categories.

MOODY'S INVESTORS SERVICE, INC.

Aaa 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 "gilt edged." Interest payments are protected by a large or 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.

Aa 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, fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risk appear somewhat greater than the Aaa
securities.

A 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 some time in the future.

Baa Bonds which are rated "Baa" are considered as medium-grade obligations
(i.e., 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.

Ba 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.

<PAGE>

B 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.

CAA 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.

CA 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.

C 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.

Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.

APPENDIX B
DESCRIPTION OF MUNICIPAL NOTE RATINGS

STANDARD & POOR'S RATINGS GROUP

S&P's note rating reflects the liquidity concerns and market access risks
unique to notes. Notes due in 3 years or less will likely receive a note
rating. Notes maturing beyond 3 years will most likely receive a long-term debt
rating. The following criteria will be used in making that assessment.

- Amortization schedule (the larger the final maturity relative to other
maturities the more likely it will be treated as a note).

- Source of Payment (the more dependent the issue is on the market for its
refinancing, the more likely it will be treated as a note).

Note rating symbols are as follows:

SP-1 Very strong or strong capacity to pay principal and interest. Those
issues determined to possess overwhelming safety characteristics will be given a
plus (+) designation.

MOODY'S INVESTORS SERVICE, INC.

Moody's ratings for state and municipal notes and other short-term loans
are designated Moody's Investment Grade (MIG). This distinction is in
recognition of the difference between short-term credit risk and long-term risk.

<PAGE>

MIG-1. Loans bearing this designation are of the best quality, enjoying
strong protection from established cash flows of funds for their servicing or
from established and broad-based access to the market for refinancing, or both.

APPENDIX C
DESCRIPTION OF COMMERCIAL PAPER RATINGS

STANDARD & POOR'S RATINGS GROUP

S&P's commercial paper rating is a current assessment of the likelihood of
timely payment of debt considered short-term in the relevant market. Ratings
are graded into several categories, ranging from "A-1" for the highest quality
obligations to "D" for the lowest.

A-1 This highest category indicates that the degree of safety regarding
timely payment is strong. Those issues determined to possess extremely strong
safety characteristics are denoted with a plus (+) designation.

MOODY'S INVESTORS SERVICE, INC.

Moody's short-term debt ratings are opinions of the ability of issuers to
repay punctually senior debt obligations which have an original maturity not
exceeding one year. Obligations relying upon support mechanisms such as
letters-of-credit and bonds of indemnity are excluded unless explicitly rated.

PRIME-1 Issuers (or supporting institutions) rated Prime-1 (P-1) have a
superior ability for repayment of senior short-term debt obligations. P-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 structure with moderate reliance
on debt and ample asset protection.
- Broad margins in earnings coverage of fixed financial
charges and high internal cash generation.
- Well-established access to a range of financial markets and
assured sources of alternate liquidity.

<PAGE>

Financial Statements as of

December 31, 1994

88
<TABLE>
<CAPTION>
Portfolio of Investments
FIRST INVESTORS NEW YORK INSURED TAX FREE FUND, INC.
December 31, 1994

- ------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL BONDS--100.5%
Education--13.0%
New York State Dormitory Authority Revenues:
City University:
$ 1,500M 8.2%, 7/1/2012 $ 1,651,875 $ 85
2,150M 7 5/8%, 7/1/2013 2,268,250 117
1,000M Iona College 7 5/8%, 7/1/2009 1,056,250 54
2,800M Manhattanville College 7 1/2%, 7/1/2022 3,090,500 159
1,250M Skidmore College 7 3/4%, 7/1/2012 1,345,313 69
State University Educational Facilities:
1,000M 5 7/8%, 5/15/2011 927,500 48
3,700M 7 3/8%, 5/15/2014 3,861,875 199
2,000M 5 1/4%, 5/15/2015 1,677,500 87
1,880M 7 1/4%, 5/15/2015 2,049,200 106
4,000M 5 1/2%, 5/15/2019 3,425,000 177
4,000M 6 1/4%, 7/1/2019 3,795,000 196
- ------------------------------------------------------------------------------------------------------------------------
25,148,263 1,297
- ------------------------------------------------------------------------------------------------------------------------
General Obligation--15.7%
Nassau County, N.Y.:
3,000M 5.70%, 8/1/2010 2,715,000 140
4,355M 5.70%, 8/1/2012 3,870,506 200
3,845M 6 1/2%, 11/1/2012 3,772,906 195
1,950M 5.45%, 1/15/2013 1,689,188 87
1,140M 5.45%, 1/15/2015 974,700 50
New York City, N.Y.:
4,250M 8%, 8/1/2006 4,600,625 237
1,000M 8 1/8%, 11/1/2007 1,086,250 56
1,000M 8%, 12/1/2011 1,042,500 54
3,500M 6.95%, 8/15/2012 3,548,125 183
1,000M 7 1/4%, 3/15/2018 1,057,500 55
Niagara Falls, N. Y. Public Improvement:
1,000M 7 1/2%, 3/1/2015 1,097,500 57
1,100M 7 1/2%, 3/1/2018 1,207,250 62
1,750M North Hempstead, N.Y. 6.4%, 4/1/2012 1,710,625 88
2,000M Puerto Rico, 7.9%, 7/1/2011 2,142,500 110
- ------------------------------------------------------------------------------------------------------------------------
30,515,175 1,574
- ------------------------------------------------------------------------------------------------------------------------
Hospital--18.0%
New York State Medical Care Facilities Agency:

1
<PAGE>

3,690M Beth Israel Hospital 7 1/2%, 11/1/2010 3,897,562 201
1,425M Doctors Hospital 9 1/4%, 1/15/2025 1,455,281 75
1,000M Good Samaritan Hospital 8%, 11/1/2013 1,060,000 55
1,850M Long Term Health Care 7 3/8%, 11/1/2011 1,935,563 100
Mental Health Services Facilities:
2,065M 7 3/8%, 2/15/2014 2,152,762 111
3,000M 7.7%, 2/15/2018 3,200,556 165
10,000M 6 1/4%, 8/15/2019 9,412,500 485
4,195M 7 3/4%, 2/15/2020 4,555,006 235
4,100M 6 1/2%, 8/15/2024 3,930,875 203
3,000M St. Luke's Hospital 7.45%, 2/15/2029 3,288,750 169
- ------------------------------------------------------------------------------------------------------------------------
34,888,855 1,799
- ------------------------------------------------------------------------------------------------------------------------
Housing--8.5%
New York City Housing Development Corp.:
2,250M Insured Multi-Family (Sheridan Manor) 7.45%, 10/1/2008 2,317,500 119
6,500M Insured Residential Charter 7 3/8%, 4/1/2017 6,727,500 347
New York State Hsg. Fin. Agcy. Multi-Family:
2,000M Series "B" 6 1/4%, 8/15/2014 1,872,500 97
1,735M Series "A" 7.45%, 11/1/2028 1,821,750 94
4,000M New York State Mortgage Agency 6.45%, 10/1/2014 3,780,000 195
- ------------------------------------------------------------------------------------------------------------------------
16,519,250 852
- ------------------------------------------------------------------------------------------------------------------------
Transportation--31.5%
Metropolitan Transit Authority of New York:
5,000M Commuter Facilities Series 6 1/8%, 7/1/2014 4,706,250 242
Transit Facilities Series:
1,420M 5 1/2%, 7/1/2011 1,251,375 65
1,800M 8 1/2%, 7/1/2011 1,923,750 99
1,500M 8 1/2%, 7/1/2017 1,638,750 85
5,000M 8% 7/1/2018 5,493,750 283
7,900M New York City Transit Auth. Rev. (Livingston Plaza Project)
7 1/2%, 1/1/2020 8,660,375 447
5,150M New York State Thruway Authority 5 3/4%, 1/1/2019 4,538,438 234
2,840M New York State Thruway Authority Svce. Contract Revenue
5 3/4%, 4/1/2013 2,570,200 133
Triborough Bridge & Tunnel Authority:
6,900M Series "Y" 6%, 1/1/2012 6,503,250 335
1,500M Series "L" 8 1/8%, 1/1/2012 1,627,500 84
1,000M Series "H" 8 3/8%, 1/1/2016 1,052,500 54
13,345M Series "Y" 5 1/2%, 1/1/2017 11,426,656 589
3,000M Series "O" 7.7%, 1/1/2019 3,273,750 169
1,000M Special Obligation 8%, 1/1/2008 1,085,000 56
5,500M Special Obligation 6 1/4%, 1/1/2012 5,259,375 271
- ------------------------------------------------------------------------------------------------------------------------
61,010,919 3,146
- ------------------------------------------------------------------------------------------------------------------------
Utilities--8.2%
New York City Municipal Water Finance Authority:
4,975M 5 7/8%, 6/15/2012 4,601,875 237
5,500M 5 1/2%, 6/15/2015 4,764,375 245
New York State Energy Research & Development Authority:
1,500M Brooklyn Union Gas 9%, 5/15/2015 1,546,875 80
1,200M Orange & Rockland Utilities 9%, 8/1/2015 1,243,500 64

2
<PAGE>

2,000M New York State Power Authority General Purpose Bonds 8%, 1/1/2017 2,147,500 111
1,895M Suffolk County, N. Y. Water Authority 5.1%, 6/1/2012 1,601,275 83
- ------------------------------------------------------------------------------------------------------------------------
15,905,400 820
- ------------------------------------------------------------------------------------------------------------------------
Other Revenue--5.6%
1,000M Monroe Cnty. N.Y. Indl. Dev. Agcy. (Rochester Inst. Tech.)
7 3/4%, 5/1/2005 1,107,500 57
1,000M New York City Indl. Dev. Agcy. (National Tennis Center)
6 3/8%, 11/15/2014 972,500 50
1,000M New York State Dorm. Auth. Rev. (Suffolk County Jud. Facs.)
7 3/8%, 7/1/2016 1,070,000 55
New York State Urban Development Corporation Correctional Facilities:
2,000M Series "C" 7 3/4%, 1/1/2013 2,167,500 112
1,150M Series "B" 8%, 1/1/2015 1,206,063 62
3,000M Series "F" 7 1/2%, 1/1/2016 3,255,000 168
1,000M Series "A" 9.2%, 1/1/2016 1,060,000 55
- ------------------------------------------------------------------------------------------------------------------------
10,838,563 559
- ------------------------------------------------------------------------------------------------------------------------
Total Value of Municipal Bonds (cost $192,003,014) 194,826,425 10,047
- ------------------------------------------------------------------------------------------------------------------------
SHORT-TERM TAX EXEMPT INVESTMENT--.2 %
General Obligation
500M New York City Floating Rate Note 4.80%, (cost $500,000)(a) 500,000 26
- ------------------------------------------------------------------------------------------------------------------------
Total Value of Municipal Investments (cost $192,503,014) 100.7% 195,326,425 10,073
Excess of Liabilities Over Other Assets (.7) (1,410,683) (73)
- ------------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $193,915,742 $10,000
========================================================================================================================
(a) Interest rates are determined and reset daily by the issuer.
Interest rate shown is the rate in effect at December 31, 1994.

See notes to financial statements

</TABLE>

<TABLE>
<CAPTION>
Portfolio of Investments
First Investors Multi-State Insured Tax Free Fund--CONNECTICUT SERIES
December 31, 1994
- --------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL BONDS--97.0%
Certificates of Participation--2.2%
Connecticut State (Middletown Courthouse Facilities):
$ 130M 6 1/4%, 12/15/2009 $ 128,050 $ 86

<PAGE>

100M 6 1/4%, 12/15/2010 97,875 66
100M 6 1/4%, 12/15/2012 97,750 66
- --------------------------------------------------------------------------------------------------------------------
323,675 218
- --------------------------------------------------------------------------------------------------------------------
Education--13.6%
Conn. State Health & Educational Facilities Authority Revenue:
725M Choate Rosemary Hall 6.8%, 7/1/2015 744,937 502
Trinity College:
350M 6%, 7/1/2012 329,000 222
1,000M 6 1/8%, 7/1/2014 945,000 636
- --------------------------------------------------------------------------------------------------------------------
2,018,937 1,360
- --------------------------------------------------------------------------------------------------------------------
General Obligation--28.8%
50M Bristol, Conn. 6 1/2%, 6/15/2006 51,063 34
30M Colchester, Conn. 7.3%, 1/15/2007 32,513 22
Connecticut State:
620M 6%, 3/15/2012 - Series "E" 589,775 397
500M 6 1/2%, 3/15/2012 - Series "A" 523,750 353
130M Coventry, Conn. 6.7%, 12/15/2009 133,900 90
Griswold, Conn.:
250M 5 3/4%, 4/15/2010 233,437 157
100M 6 1/4%, 6/15/2010 98,625 66
100M Groton City, Conn. 6 3/4%, 6/1/2007 103,500 70
800M New Britain, Conn. 6%, 3/1/2012 761,000 512
130M Newton, Conn. 6.7%, 8/15/2010 133,738 90
30M North Canaan, Conn. 6.9%, 1/15/2006 31,425 21
40M Old Saybrook, Conn. 6 1/2%, 2/15/2009 40,950 28
250M Plainfield, Conn. 6 3/8%, 8/1/2011 245,937 166
290M Regional School District #5, Conn. 6.3%, 3/1/2009 284,925 192
255M Salisbury, Conn. 5 1/2%, 6/1/2008 233,644 157
330M Southington, Conn. 6.55%, 4/1/2012 332,887 224
Stratford, Conn.:
50M 6.6%, 3/1/2007 51,313 35
90M 6.55%, 11/15/2008 91,350 62
50M Suffield, Conn. 6 1/2%, 11/15/2005 51,375 35
250M Westbrook, Conn. 6.4%, 3/15/2010 249,062 168
- --------------------------------------------------------------------------------------------------------------------
4,274,169 2,879
- --------------------------------------------------------------------------------------------------------------------
Hospital--20.3%
Conn. State Health & Educationial Facilities Authority Revenue:
450M Bridgeport Hospital 6 1/2%, 7/1/2012 446,062 300
60M Danbury Hospital-University of New Haven 6 7/8%, 1/1/2010 61,425 41
580M Lawrence & Memorial Hospital 6 3/8%, 7/1/2012 607,550 409
700M New Britain General Hospital 6 1/8%, 7/1/2014 658,000 443
650M Newington Childrens Hospital 6 1/4%, 7/1/2015 619,125 417
325M Stamford Hospital 6 1/2%, 7/1/2006 335,969 226
280M Yale-New Haven Hospital 7%, 7/1/2010 285,950 193
- --------------------------------------------------------------------------------------------------------------------
3,014,081 2,029
- --------------------------------------------------------------------------------------------------------------------
Housing--6.2%
Connecticut State Housing Finance Authority:
750M 6.1%, 5/15/2013 686,250 462

4
<PAGE>

250M 6.35%, 5/15/2017 238,437 161
- --------------------------------------------------------------------------------------------------------------------
924,687 623
- --------------------------------------------------------------------------------------------------------------------
Transportation--8.2%
Connecticut State Special Tax Oblig. Transportation Infrastructure:
285M 6%, 10/1/2009 275,025 185
200M 6 1/4%, 10/1/2009 195,750 132
250M 6.1%, 10/1/2012 237,813 160
250M 6 1/8%, 9/1/2012 238,125 160
300M 5.65%, 4/1/2013 270,375 182
- --------------------------------------------------------------------------------------------------------------------
1,217,088 819
- --------------------------------------------------------------------------------------------------------------------
Utilities--9.0%
300M Connecticut State Resource Recovery Auth. Mid. Conn. Sys.
7.3%, 11/15/2012 316,500 213
South Central Conn. Regl. Water Auth. Water Sys. Rev.:
150M 5 7/8%, 8/1/2008 151,313 102
150M 5 3/4%, 8/1/2012 137,063 92
250M 5 7/8%, 8/1/2012 252,187 170
500M 6 1/8%, 8/1/2014 475,000 320
- --------------------------------------------------------------------------------------------------------------------
1,332,063 897
- --------------------------------------------------------------------------------------------------------------------
Other Revenue--8.7%
545M Connecticut State Dev. Auth. Govtl. Lease Rev. 6 1/2%, 6/15/2008 547,044 369
800M Puerto Rico Municipal Finance Agency 6%, 7/1/2014 753,000 507
- --------------------------------------------------------------------------------------------------------------------
1,300,044 876
- --------------------------------------------------------------------------------------------------------------------
Total Value of Municipal Bonds (cost $14,558,229) 97.0% 14,404,744 9,701
Other Assets, Less Liabilities 3.0 443,242 299
- --------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $14,847,986 $10,000
====================================================================================================================

See notes to financial statements
</TABLE>

<TABLE>
<CAPTION>
Portfolio of Investments
First Investors Multi-State Insured Tax Free Fund--FLORIDA SERIES
December 31, 1994
- ------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL BONDS--97.9%
5

<PAGE>

Education--2.0%
$ 400M Volusia County, Fla. Educ. Facs. Auth. (Stetson University)
6 3/8%, 6/1/2012 $ 394,500 $ 200
- ------------------------------------------------------------------------------------------------------------------------
General Obligation--4.1%
300M Miami, Fla. 6%, 12/1/2010 287,625 146
500M North Springs, Fla. Impt. Dist. 7%, 10/1/2009 530,000 268
- ------------------------------------------------------------------------------------------------------------------------
817,625 414
- ------------------------------------------------------------------------------------------------------------------------
Hospital--3.9%
400M Miami, Fla. Health Facs. Auth. (Mercy Hospital) 6 3/4%, 8/1/2020 428,000 217
350M North Broward, Fla. Hosp. Dist. 6 1/2%, 1/1/2012 350,000 177
- ------------------------------------------------------------------------------------------------------------------------
778,000 394
- ------------------------------------------------------------------------------------------------------------------------
Housing--6.9%
250M Dade County, Fla. Hsg. Fin. Auth. Single-Family Mtge. 6.95%, 12/15/2012 252,812 128
Florida Housing Finance Agency:
975M General Mtge. (Series "A") 6 1/4%, 7/1/2011 934,781 472
175M Residential Mtge. (Series 2) 8%, 12/15/2016 178,938 91
- ------------------------------------------------------------------------------------------------------------------------
1,366,531 691
- ------------------------------------------------------------------------------------------------------------------------
Transportation--9.3%
Florida State Turnpike Authority Turnpike Revenue:
1,000M 5%, 7/1/2016 817,500 413
530M 6.35%, 7/1/2022 551,200 279
455M Port Palm Beach District, Fla. Revenue 6 1/4%, 9/1/2008 457,844 232
- ------------------------------------------------------------------------------------------------------------------------
1,826,544 924
- ------------------------------------------------------------------------------------------------------------------------
Utilities--47.4%
750M Brevard County, Fla. Utilities Rev. 5 1/4%, 3/1/2014 635,625 321
250M Broward County, Fla. Water & Sewer Utilities Rev. 6 1/2%, 10/1/2017 262,813 133
750M Charlotte County, Fla. Utilities Revenue 6 3/4%, 10/1/2013 764,063 386
Escambia County, Fla. Utilities Authority Util. Sys. Rev.:
500M 6 1/4%, 1/1/2013 485,000 245
500M 6 1/4%, 1/1/2015 488,750 247
Florida State Mun. Pwr. Agency Rev. (St. Lucie Project):
400M 5 1/2%, 10/1/2012 356,500 180
500M 5.7%, 10/1/2016 451,875 228
100M Jacksonville, Fla. Elec. Auth. Rev. (St. John's River Power)
6 1/4%, 10/1/2007 100,500 51
690M Jacksonville Beach, Fla. Utilities Rev. 6 3/4%, 10/1/2020 739,162 374
Kissimmee, Fla. Utility Authority Electric System Revenue:
1,000M 5 3/8%, 10/1/2012 887,500 449
300M 6 1/2%, 10/1/2017 317,250 161
500M Miramar, Fla. Util. Impt. Rev. 6.4%, 10/1/2007 500,000 253
100M Orlando, Fla. Utilities Comm. Water & Electric Rev. 6 1/2%, 10/1/2020 105,750 54
140M Pinellas County, Fla. Resource Recovery Revenue 6.9%, 10/1/2004 149,450 76
Reedy Creek, Fla. Impt. Dist. Utilities Revenue:
500M 5%, 10/1/2014 413,125 209
300M 6 1/2%, 10/1/2016 315,375 160
500M Sarasota County, Fla. Utility System Revenue 6 1/2%, 10/1/2014 502,500 254
500M St. Lucie County, Fla. Utility System Revenue 5 3/8%, 10/1/2011 443,750 225

<PAGE>

500M Seminole County, Fla. Water & Sewer Revenue 6%, 10/1/2009 490,625 248
200M Tampa, Fla. Water & Sewer Revenue 6.3%, 10/1/2006 203,000 103
750M West Melbourne, Fla. Water & Sewer Revenue 6 3/4%, 10/1/2014 756,562 383
- ------------------------------------------------------------------------------------------------------------------------
9,369,175 4,740
- ------------------------------------------------------------------------------------------------------------------------
Other Revenue--24.3%
1,000M Escambia County, Fla. Sales Tax Revenue 5.8%, 1/1/2015 906,250 459
Florida State Div. Bd. Fin. Dept. General Services Revenues:
1,000M 5.8%, 7/1/2013 908,750 460
400M 6 3/4%, 7/1/2013 406,500 206
Jacksonville, Fla. Excise Taxes Revenue:
500M 5 1/4%, 10/1/2010 439,375 222
350M 6 1/2%, 10/1/2013 348,250 176
600M Orange County, Fla. Tourist Dev. Tax Revenue 5.9%, 10/1/2010 573,750 290
1,000M Palm Beach County, Fla. Criminal Justice Facs. Rev. 5 3/8%, 6/1/2011 892,500 452
300M St. Lucie County, Fla. Sales Tax Revenue 6 1/2%, 10/1/2022 316,875 160
- ------------------------------------------------------------------------------------------------------------------------
4,792,250 2,425
- ------------------------------------------------------------------------------------------------------------------------
Total Value of Municipal Bonds (cost $19,631,758) 97.9% 19,344,625 9,788
Other Assets, Less Liabilities 2.1 420,385 212
- ------------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $19,765,010 $10,000
========================================================================================================================
See notes to financial statements
</TABLE>

<TABLE>
<CAPTION>
Portfolio of Investments
First Investors Multi-State Insured Tax Free Fund--GEORGIA SERIES
December 31, 1994
- ------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL BONDS--97.5%
Education--7.7%
Private Colleges & Univs. Facs. Auth., Ga.:
$ 80M Mercer University Project 6.35%, 11/1/2006 $ 82,100 $ 398
80M Spelman University Project 6%, 6/1/2009 76,800 372
- ------------------------------------------------------------------------------------------------------------------------
158,900 770
- ------------------------------------------------------------------------------------------------------------------------
General Obligation--25.8%
75M Columbia County, Ga. School District 6 1/4%, 4/1/2013 73,125 354
100M Fulton County, Ga. School District 7 5/8%, 5/1/2017 107,875 522
85M Hall County, Ga. School District 6.7%, 12/1/2014 85,425 414
75M Henry County, Ga. School District 5.9%, 8/1/2011 70,500 341
100M Mitchell County, Ga. School District 6 1/2%, 3/1/2009 100,375 486

7
<PAGE>

100M Peach County, Ga. School District 6.4%, 2/1/2019 96,000 465
- ------------------------------------------------------------------------------------------------------------------------
533,300 2,582
- ------------------------------------------------------------------------------------------------------------------------
Hospital--3.8%
Fulton DeKalb, Ga. Hospital Authority (Grady Hospital):
65M 5 1/2%, 1/1/2012 56,956 276
20M 6.9%, 1/1/2020 21,475 104
- ------------------------------------------------------------------------------------------------------------------------
78,431 380
- ------------------------------------------------------------------------------------------------------------------------
Transportation--12.1%
Metropolitan Atlanta Rapid Transit Authority:
150M 6 1/4%, 7/1/2011 146,812 711
35M 6 1/4%, 7/1/2020 33,294 161
65M 7.2%, 7/1/2020 70,363 341
- ------------------------------------------------------------------------------------------------------------------------
250,469 1,213
- ------------------------------------------------------------------------------------------------------------------------
Utilities--30.5%
25M Bartow County, Ga. Water & Sewer Revenue 6.05%, 9/1/2007 24,687 120
95M Brunswick, Ga. Water & Sewer Revenue 6.1%, 10/1/2019 89,419 432
85M Conyers, Ga. Water & Sewer Revenue 6.45%, 7/1/2010 84,787 411
80M Cordele, Ga. Comb. Public Utilities Revenue 6.4%, 11/1/2014 77,500 375
65M Fulton County, Ga. Water & Sewer Revenue 6 3/8%, 1/1/2014 64,188 311
60M Gainesville, Ga. Water & Sewer Revenue 7.2%, 11/15/2010 65,625 318
100M Georgia Municipal Electric Authority, Special Obligation 6 1/2%, 1/1/2017 97,875 474
80M Georgia Municipal Gas Authority Revenue 6.8%, 11/1/2009 82,600 400
45M Sugar Hill, Ga. Public Utilities Revenue 5.9%, 1/1/2014 41,963 203
- ------------------------------------------------------------------------------------------------------------------------
628,644 3,044
- ------------------------------------------------------------------------------------------------------------------------
Other Revenue--17.6%
80M Appling County, Ga. Dev. Auth. Poll. Ctl. Rev. 7.1%, 1/1/2014 82,100 398
75M Cobb-Marietta, Ga. Coliseum & Exhibit Hall Authority 6.6%, 10/1/2013 79,781 386
80M Downtown Smyrna, Ga. Dev. Auth. Rev. 6.7%, 2/1/2020 79,200 383
50M East Point, Ga. Building Authority Revenue 6%, 2/1/2011 47,375 229
80M Puerto Rico Municipal Finance Agency 6%, 7/1/2014 75,300 365
- ------------------------------------------------------------------------------------------------------------------------
363,756 1,761
- ------------------------------------------------------------------------------------------------------------------------
Total Value of Municipal Bonds (cost $2,048,505) 97.5% 2,013,500 9,750
Other Assets, Less Liabilities 2.5 51,717 250
- ------------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $2,065,217 $10,000
========================================================================================================================

See notes to financial statements
</TABLE>

<TABLE>
<CAPTION>
Portfolio of Investments
First Investors Multi-State Insured Tax Free Fund--MARYLAND SERIES
December 31, 1994 8

<PAGE>

- ------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL BONDS--96.6%
Certificates of Participation--0.5%
$ 30M Baltimore, Maryland Series "B" 7 1/4%, 4/1/2016 $ 31,312 $ 45
- ------------------------------------------------------------------------------------------------------------------------
Education--5.6%
Morgan State University Academic & Aux. Facs. Fees Revenue:
200M 6.1%, 7/1/2020 188,000 272
90M 7%, 7/1/2020 97,200 141
University of Maryland Sys. Aux. Fac. & Tuition Revenue:
50M 6.3%, 2/1/2001 52,250 76
50M 6 1/2%, 4/1/2011 52,750 76
- ------------------------------------------------------------------------------------------------------------------------
390,200 565
- ------------------------------------------------------------------------------------------------------------------------
General Obligation--15.9%
50M Anne Arundel County, Maryland Water & Sewer 6.9%, 1/15/2019 53,188 77
Baltimore, Maryland:
100M 6.3%, 10/15/2004 102,125 148
100M 7%, 10/15/2007 107,125 155
100M 7%, 10/15/2009 106,250 154
55M Carroll County, Maryland 6 1/4%, 11/1/2011 57,406 83
100M Chesapeake Beach, Maryland 6 1/2%, 5/1/2012 99,000 143
Frederick, Maryland:
100M 6 1/8%, 12/1/2008 98,875 144
200M 6 1/8%, 10/1/2014 188,750 274
60M Frederick County, Maryland 6 5/8%, 8/1/2019 63,600 92
35M Howard County, Maryland 6 5/8%, 2/15/2021 36,881 53
35M Maryland State First Series 6 1/2%, 3/15/2005 36,794 53
35M Montgomery County, Maryland 6 3/4%, 4/1/2010 37,406 54
105M Puerto Rico Commonwealth 6.6%, 7/1/2013 111,694 162
- ------------------------------------------------------------------------------------------------------------------------
1,099,094 1,592
- ------------------------------------------------------------------------------------------------------------------------
Hospital--20.2%
Maryland State Health & Higher Education Facilities Authority:
35M Baltimore County General Hospital 6.9%, 7/1/2013 37,713 55
Francis Scott Key Medical Center:
30M 7%, 7/1/2010 32,400 47
200M 5%, 7/1/2013 165,500 240
90M 6 3/4%, 7/1/2023 96,187 139
250M Maryland General Hospital 6 1/8%, 7/1/2014 236,250 342
20M Memorial Hospital 7%, 7/1/2007 20,775 30
170M North Arundel Hospital 6%, 7/1/2012 159,800 231
140M Sinai Hospital of Baltimore 7%, 7/1/2019 151,200 219
110M Suburban Hospital 6%, 7/1/2021 110,962 161
65M University of Maryland Medical System 7%, 7/1/2017 70,444 102
350M Maryland State Indl. Dev. Fing. (Holy Cross Health System) 5.4%, 12/1/2008 316,312 458

<PAGE>

- ------------------------------------------------------------------------------------------------------------------------
1,397,543 2,024
- ------------------------------------------------------------------------------------------------------------------------
Housing--17.8%
250M Baltimore County, Maryland Mtge. Rev. (Old Orchard Apts.) 7%, 7/1/2016 254,062 368
250M Charles County, Maryland Housing Mtge. Rev. 5.8%, 7/1/2019 218,438 316
Maryland State Community Dev. Admin. Dept. Hsg. & Cmnty. Dev.:
45M 7%, 6/1/2011 45,338 66
225M 6.45%, 4/1/2014 214,594 311
250M 7%, 4/1/2014 252,187 365
250M Montgomery County, Maryland Single Family Mtge. Rev. 6 1/2%, 7/1/2011 243,437 353
- ------------------------------------------------------------------------------------------------------------------------
1,228,056 1,779
- ------------------------------------------------------------------------------------------------------------------------
Transportation--7.5%
Maryland State Department of Transportation:
60M 6 3/8%, 9/1/2006 60,975 88
50M 7.3%, 11/15/2001 52,750 77
500M Zero Cpn. 7/1/2012 160,625 233
250M Washington, D.C. Metro. Area Transportation Authority 6%, 7/1/2010 239,688 347
- ------------------------------------------------------------------------------------------------------------------------
514,038 745
- ------------------------------------------------------------------------------------------------------------------------
Utilities--14.5%
Baltimore, Maryland Wastewater Utilities Revenue:
200M 6%, 7/1/2015 187,750 272
165M 6 1/2%, 7/1/2020 172,013 249
215M 6 1/4%, 7/1/2022 223,600 324
400M Baltimore, Maryland Water Utilities Revenue 6 1/4%, 7/1/2022 416,000 603
- ------------------------------------------------------------------------------------------------------------------------
999,363 1,448
- ------------------------------------------------------------------------------------------------------------------------
Other Revenue--14.6%
30M Baltimore, Maryland (Baltimore City Parking System) 6 5/8%, 7/1/2008 31,500 46
250M Baltimore, Maryland (Convention Center) 6.1%, 9/1/2013 238,438 345
35M Maryland Industrial Financing Authority 7%, 7/1/2010 36,400 53
100M Montgomery County, Maryland Pkg. Rev. (Bethesda Pkg. Lot) 6 1/4%,
6/1/2009 98,000 142
300M Prince Georges County, Maryland Ind. Dev. Auth. 7%, 6/30/2019 322,500 467
300M Puerto Rico Municipal Finance Agency Rev. 6%, 7/1/2014 282,375 409
- ------------------------------------------------------------------------------------------------------------------------
1,009,213 1,462
- ------------------------------------------------------------------------------------------------------------------------
Total Value of Municipal Bonds (cost $6,768,267) 96.6% 6,668,819 9,660
Other Assets, Less Liabilities 3.4 234,704 340
- ------------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $6,903,523 $10,000
========================================================================================================================

See notes to financial statements
</TABLE>

<TABLE>
<CAPTION>
Portfolio of Investments 10

<PAGE>

First Investors Multi-State Insured Tax Free Fund--MASSACHUSETTS SERIES
December 31, 1994
- -------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL BONDS--97.7%
Education--6.3%
Massachusetts Health & Educational Facilities Authority:
$ 425M Northeastern University 7 1/8%, 10/1/2010 $ 436,688 $ 210
120M Tufts University 7 3/4%, 8/1/2013 128,550 62
600M Massachusetts State College Bldg. Auth. Series "A" 7 1/4%, 5/1/2016 628,500 301
120M University of Massachusetts Bldg. Auth. 7 1/2%, 5/1/2014 125,400 60
- -------------------------------------------------------------------------------------------------------------------------
1,319,138 633
- -------------------------------------------------------------------------------------------------------------------------
General Obligation--19.6%
250M Boston, Massachusetts 7 3/8%, 2/1/2010 271,875 130
160M Brighton-Rehoboth, Mass. Regional School District 7.2%, 2/1/2006 172,600 83
500M Chelsea, Massachusetts 6 1/2%, 6/15/2012 494,375 237
70M Holyoke, Massachusetts 8.2%, 6/15/2007 81,113 39
Massachusetts General Obligations:
360M 7%, 6/1/2009 386,550 186
300M 7%, 7/1/2009 314,250 151
500M 6%, 8/1/2009 481,875 231
255M 6%, 8/1/2010 244,162 117
150M North Borough, Massachusetts 7.2%, 11/1/2003 158,813 76
150M Rochester, Massachusetts 7 1/4%, 3/1/2007 159,750 77
400M Rockport, Massachusetts Unlimited Tax School Project Loan
6.9%, 12/15/2007 425,500 204
Wareham, Massachusetts:
225M 7.05%, 1/15/2007 241,031 116
500M 7.1%, 1/15/2008 536,250 257
100M Wrentham, Massachusetts 7.4%, 9/1/2004 110,125 53
- -------------------------------------------------------------------------------------------------------------------------
4,078,269 1,957
- -------------------------------------------------------------------------------------------------------------------------
Hospital--37.4%
Massachusetts Health & Educational Facilities Authority:
295M Berkshire Hospital 7.6%, 10/1/2014 309,381 148
Capital Asset Program:
225M 7.35%, 8/1/2008 239,625 115
400M 7.2%, 7/1/2009 412,500 198
500M Carney Hospital 7 3/4%, 7/1/2014 557,500 268
1,200M Dana-Farber Cancer Institute 6%, 12/1/2015 1,093,500 525
500M Lahey Clinic 7 5/8%, 7/1/2018 543,750 261
Massachusetts General Hospital:
750M 6 1/4%, 7/1/2012 720,938 346
1,000M 5 1/4%, 7/1/2023 798,750 383
570M Milton Hospital 7%, 7/1/2016 576,412 277
Mt. Auburn Hospital:
1,000M 6 1/4%, 8/15/2014 948,750 455

11
<PAGE>

75M 7 7/8%, 7/1/2018 81,844 39
510M Newton-Wellesley Hospital 8%, 7/1/2018 551,437 265
400M South Shore Hospital 7 1/2%, 7/1/2020 441,500 212
490M University Hospital 7 1/4%, 7/1/2019 508,375 244
- -------------------------------------------------------------------------------------------------------------------------
7,784,262 3,736
- -------------------------------------------------------------------------------------------------------------------------
Housing--4.7%
Massachusetts Housing Finance Agency:
900M 5.95%, 12/1/2014 816,750 392
160M 7.7%, 12/1/2017 163,800 79
- -------------------------------------------------------------------------------------------------------------------------
980,550 471
- -------------------------------------------------------------------------------------------------------------------------
Transportation--5.9%
Massachusetts Bay Transportation Authority:
220M Series "A" 7.1%, 3/1/2008 236,775 114
690M Series "A" 7.65%, 8/1/2015 736,575 353
50M Massachusetts Port Authority Revenue 7 1/8%, 7/1/2012 51,000 24
250M Massachusetts State Turnpike Authority Rev. 5 1/8%, 1/1/2023 199,063 96
- -------------------------------------------------------------------------------------------------------------------------
1,223,413 587
- -------------------------------------------------------------------------------------------------------------------------
Utilities--23.8%
Boston, Massachusetts Water & Sewer Commission:
100M 7 1/4%, 11/1/2006 106,250 51
950M 7%, 11/1/2011 1,031,937 495
1,035M 5 3/4%, 11/1/2013 936,675 450
475M Lynn, Massachusetts Water & Sewer Commission 7 1/4%, 12/1/2010 520,719 250
1,000M Massachusetts State Water Resource Authority 5.9%, 8/1/2016 892,500 428
435M Peabody, Massachusetts Electric Rev. 7.15%, 10/1/2009 471,431 226
1,000M South Essex, Massachusetts Sewer District 6 3/4%, 6/1/2013 1,008,750 484
- -------------------------------------------------------------------------------------------------------------------------
4,968,262 2,384
- -------------------------------------------------------------------------------------------------------------------------
Total Value of Municipal Bonds (cost $19,986,719) 97.7% 20,353,894 9,768
Other Assets, Less Liabilities 2.3 484,337 232
- -------------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $20,838,231 $10,000
=========================================================================================================================

See notes to financial statements
</TABLE>

<TABLE>
<CAPTION>
Portfolio of Investments
First Investors Multi-State Insured Tax Free Fund--NEW JERSEY SERIES
December 31, 1994
- --------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets

12
<PAGE>

- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL BONDS--98.7%
Certificates of Participation--5.3%
$ 400M Hamilton Township, N.J. Board of Education 7%, 6/1/2009 $ 414,500 $ 75
1,000M Hudson County, N.J. Correctional Facility 7 1/4%, 12/1/2021 1,096,250 198
700M Mantua Township, N.J. School District 7 1/4%, 6/30/2010 769,125 139
600M Piscataway Township, N.J. School District 7%, 12/15/2010 655,500 118
- --------------------------------------------------------------------------------------------------------------------------
2,935,375 530
- --------------------------------------------------------------------------------------------------------------------------
Education--5.6%
New Jersey Educational Facilities Financing Authority:
1,300M Seton Hall University 6 1/4%, 7/1/2010 1,277,250 230
2,000M Trenton State College 6%, 7/1/2019 1,837,500 332
- --------------------------------------------------------------------------------------------------------------------------
3,114,750 562
- --------------------------------------------------------------------------------------------------------------------------
General Obligation--15.6%
750M Carteret, N.J. 7.1%, 10/1/2008 797,812 144
Essex County, N.J. Improvement Authority:
955M County College Project 6.9%, 12/1/2014 976,488 176
545M Jail & Youth House Project 6.9%, 12/1/2014 554,538 100
Orange School District:
1,025M Series "A" 6.95%, 7/1/2014 1,051,906 190
1,220M Series "B" 6.95%, 7/1/2014 1,252,025 226
Mercer County, N.J. Improvement Authority Revenue:
900M 7%, 12/15/2009 970,875 176
1,000M 7.2%, 12/15/2012 1,075,000 194
1,000M New Jersey State Various Purposes 6%, 2/15/2011 958,750 173
1,000M Union, N.J. 6.7%, 9/1/2012 1,015,000 183
- --------------------------------------------------------------------------------------------------------------------------
8,652,394 1,562
- --------------------------------------------------------------------------------------------------------------------------
Hospital--27.9%
New Jersey Health Care Facilities Financing Authority:
1,000M Bayonne Hospital 6 1/4%, 7/1/2012 966,250 175
400M Community Medical Center 7%, 7/1/2009 412,000 75
1,500M Dover General Hospital & Medical Center 5 7/8%, 7/1/2012 1,385,625 250
1,745M General Hospital Center at Passaic 6%, 7/1/2014 1,618,487 292
750M Holy Name Hospital 7%, 7/1/2008 775,313 140
1,100M Hunterdon Hospital 7%, 7/1/2020 1,120,625 202
1,750M Monmouth Medical Center 6 1/4%, 7/1/2016 1,675,625 303
1,500M Ocean County Medical Center 6.9%, 7/1/2007 1,590,000 287
3,120M Riverview Medical Center 6 1/4%, 7/1/2011 3,034,200 548
825M St. Barnabas Medical Center 7 1/4%, 7/1/2018 850,781 154
1,000M St. Clares Riverside Medical Center 5 3/4%, 7/1/2010 921,250 166
1,000M St. Peter's Medical Center Series "E" 6 7/8%, 7/1/2011 1,076,250 194
- --------------------------------------------------------------------------------------------------------------------------
15,426,406 2,786
- --------------------------------------------------------------------------------------------------------------------------
Housing--4.9%
New Jersey State Housing & Mortgage Financing Agency:
380M Series "A" 7 1/2%, 4/1/2015 385,700 70
420M Series "E" 7.65%, 10/1/2016 433,650 78
1,385M Series "C" 7 3/8%, 10/1/2017 1,412,700 255

13
<PAGE>

450M Series "B" 8.1%, 10/1/2017 471,938 85
- --------------------------------------------------------------------------------------------------------------------------
2,703,988 488
- --------------------------------------------------------------------------------------------------------------------------
Transportation--6.4%
900M Delaware River Port Authority 7 3/8%, 1/1/2007 960,750 174
1,000M New Jersey State Highway Authority (Garden State Parkway)
6.2%, 1/1/2010 973,750 176
2,000M Port Authority, New York & New Jersey 5 1/4%, 7/15/2017 1,635,000 295
- --------------------------------------------------------------------------------------------------------------------------
3,569,500 645
- --------------------------------------------------------------------------------------------------------------------------
Utilities--16.3%
1,000M Bergen County, N.J. Util. Auth. Water Pollution Ctl. 6 1/2%, 12/15/2012 1,001,250 181
380M Camden County, N.J. Municipal Utilities Sewer Revenue 8 1/4%, 12/1/2017 412,300 74
1,100M Evesham, N.J. Municipal Utilities Authority 7%, 7/1/2015 1,171,500 211
1,900M Jersey City, N.J. Sewer Authority 4 1/2%, 1/1/2019 1,372,750 248
425M Lacey, N.J. Municipal Utilities Authority 7%, 12/1/2016 458,469 83
500M Long Branch, N.J. Sewer Authority 7 1/4%, 6/1/2014 545,625 99
600M Lower Township, N.J. Municipal Utilities Authority 7%, 12/1/2015 650,250 117
250M Montville Township, N.J. Municipal Utilities Authority 7%, 12/1/2011 259,375 47
500M Musconetcong, N.J. Sewer Authority 7.15%, 1/1/2014 540,625 98
1,435M New Jersey Wastewater Treatment Trust 6 1/4%, 4/1/2010 1,402,712 253
1,140M Passaic Valley, N.J. Water Commn. 6.4%, 12/15/2022 1,197,000 216
- --------------------------------------------------------------------------------------------------------------------------
9,011,856 1,627
- --------------------------------------------------------------------------------------------------------------------------
Other Revenue--16.7%
1,900M Atlantic County, N.J. Impt. Auth. Lux. Tax. (Conv. Ctr.) 7.4%, 7/1/2016 2,037,750 368
350M Cape May County, N.J. Indl. Pollution Control Fin. Auth. 6.8%, 3/1/2021 358,312 65
1,000M New Brunswick, N.J. Parking Authority 7.2%, 9/1/2015 1,080,000 195
New Jersey Econ. Dev. Auth. Market Transition Fac. Rev.:
1,500M 5.8%, 7/1/2009 1,410,000 255
1,500M 5 7/8%, 7/1/2011 1,413,750 255
2,000M New Jersey Sports & Exposition Authority (Conv. Ctr.) 6%, 7/1/2012 1,875,000 338
1,000M Salem County, N.J. Impt. Auth. Rev. County Corr. Facs. 7 1/8%, 5/1/2017 1,077,500 195
- --------------------------------------------------------------------------------------------------------------------------
9,252,312 1,671
- --------------------------------------------------------------------------------------------------------------------------
Total Value of Municipal Bonds (cost $54,113,009) 98.7% 54,666,581 9,871
Other Assets, Less Liabilities 1.3 712,210 129
- --------------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $55,378,791 $10,000
==========================================================================================================================

See notes to financial statements
</TABLE>

<TABLE>
<CAPTION>
Portfolio of Investments
First Investors Multi-State Insured Tax Free Fund--NORTH CAROLINA SERIES
December 31, 1994
- ---------------------------------------------------------------------------------------------------------------------------
14
<PAGE>

Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL BONDS--97.2%
Certificates of Participation--5.7%
Charlotte, N.C.:
$135M 5 1/4%, 12/1/2013 $ 114,412 $ 295
100M 6 3/4%, 12/1/2021 107,250 277
- ---------------------------------------------------------------------------------------------------------------------------
221,662 572
- ---------------------------------------------------------------------------------------------------------------------------
Education--6.1%
University of North Carolina:
100M Dormitory & Dining Hall System Revenue 5 1/2%, 6/1/2016 89,500 231
150M University Housing & Dining System 5.1%, 1/1/2008 130,875 338
15M Student Union System Revenue 6.9%, 1/1/2005 15,900 41
- ---------------------------------------------------------------------------------------------------------------------------
236,275 610
- ---------------------------------------------------------------------------------------------------------------------------
General Obligation--20.3%
25M Cleveland, N.C. 7.1%, 6/1/2001 26,812 69
200M Gaston County, N.C. 5.7%, 3/1/2013 182,250 471
200M Mecklenburg County, N.C. Public Improvement 6.2%, 1/1/2004 205,250 530
65M New Hanover, N.C. 4.9%, 8/1/2010 55,169 142
100M Orange County, N.C. 4 3/4%, 3/1/2008 83,500 216
45M Rutherford, N.C. 5.7%, 6/1/2012 45,169 117
200M Watauga County, N.C. 5.9%, 6/1/2014 186,750 482
- ---------------------------------------------------------------------------------------------------------------------------
784,900 2,027
- ---------------------------------------------------------------------------------------------------------------------------
Hospital--11.6%
135M Craven, N.C. Regl. Med. Auth. Health Care Facs. Rev. 5 5/8%, 10/1/2017 119,306 308
100M Cumberland County, N.C. Hosp. Facs. (Cumberland Cnty. Hosp. Sys.)
5 1/2%, 10/1/2014 88,125 228
North Carolina Medical Care Commission Hospital Revenue:
100M Memorial Mission Hospital Project 5 1/2%, 10/1/2011 88,625 229
140M Presbyterian Health Services Corporation 7 3/8%, 10/1/2020 154,000 398
- ---------------------------------------------------------------------------------------------------------------------------
450,056 1,163
- ---------------------------------------------------------------------------------------------------------------------------
Housing--3.1%
125M North Carolina Housing Finance Agency 6.6%, 7/1/2017 121,719 314
- ---------------------------------------------------------------------------------------------------------------------------
Transportation--0.4%
15M Piedmont Triad Airport Authority, N.C. Airport Revenue 6 3/4%, 7/1/2016 16,031 41
- ---------------------------------------------------------------------------------------------------------------------------
Utilities--45.1%
135M Buncombe County, N.C. Metro. Sewer District Rev. 5 3/8%, 7/1/2013 118,294 306
200M Charlotte, N.C. Water & Sewer 5 1/4%, 2/1/2014 174,000 450
70M Concord, N.C. Utility Systems 5 3/4%, 12/1/2017 62,825 162
100M Dare County, N.C. Utility System 5 3/4%, 6/1/2014 91,000 235
Fayetteville, N.C. Public Works Commission Revenue:

15
<PAGE>

150M 4 3/4%, 3/1/2014 118,312 306
25M 6 1/2%, 3/1/2014 26,375 68
475M North Carolina Eastern Municipal Power Agency 5 1/2%, 1/1/2007 439,969 1,136
North Carolina Municipal Power Agency (#1 Catawba Electric):
420M 5 3/4%, 1/1/2020 372,225 961
125M 6%, 1/1/2010 119,688 309
210M Puerto Rico Electric Power Authority 9%, 7/1/2005 221,132 571
- ---------------------------------------------------------------------------------------------------------------------------
1,743,820 4,504
- ---------------------------------------------------------------------------------------------------------------------------
Other Revenue--4.9%
200M Puerto Rico Municipal Finance Agency 6%, 7/1/2014 188,250 486
- ---------------------------------------------------------------------------------------------------------------------------
Total Value of Municipal Bonds (cost $4,020,720) 97.2% 3,762,713 9,717
Other Assets, Less Liabilities 2.8 109,572 283
- ---------------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $3,872,285 $10,000
===========================================================================================================================
See notes to financial statements
</TABLE>

<TABLE>
<CAPTION>
Portfolio of Investments
First Investors Multi-State Insured Tax Free Fund--PENNSYLVANIA SERIES
December 31, 1994
- ------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL BONDS--96.3%
Certificates of Participation--3.6%
$1,500M Pennsylvania State 5%, 7/1/2015 $ 1,190,625 $ 355
- ------------------------------------------------------------------------------------------------------------------------
Education--8.9%
675M Northeast. Pa. Hosp. & Ed. Auth. (Luzerne Cnty. Cmnty. College)
6.55%, 8/15/2009 675,844 201
Pennsylvania State Higher Educational Facilities Authority:
1,000M Drexel University 5 5/8%, 5/1/2014 881,250 263
455M Hahnemann University 7.2%, 7/1/2019 475,475 142
1,000M Phila., Pa. Hosp. & Higher Edl. Facs. Auth. (Cmnty. College) 6 1/8%, 5/1/2014 940,000 280
- ------------------------------------------------------------------------------------------------------------------------
2,972,569 886
- ------------------------------------------------------------------------------------------------------------------------
General Obligation--16.0%
150M Allegheny County, Pa. Inst. Dist. Series 18, 7.3%, 4/1/2009 157,312 47
200M Conrad Weiser Area School District 6 5/8%, 10/1/2007 201,750 60
265M Falls Township, Pa. 7%, 12/15/2010 282,225 84
700M Jeannette, Pa. School District 6.65%, 6/15/2021 735,000 219
300M Lehigh County, Pa. 6.9%, 8/1/2011 322,875 96

16
<PAGE>

1,000M Philadelphia, Pa. 6%, 11/15/2014 918,750 274
1,500M Pittsburgh, Pa. 5 1/2%, 9/1/2014 1,312,500 391
800M Trinity Area School District, Pa. 6 5/8%, 11/1/2011 841,000 251
565M Venango County, Pa. 7%, 7/15/2015 605,962 181
- ------------------------------------------------------------------------------------------------------------------------
5,377,374 1,603
- ------------------------------------------------------------------------------------------------------------------------
Hospital--14.1%
1,000M Allegheny County, Pa. Hosp. Dev. Auth. (Magee-Womens Hosp.)
6%, 10/1/2013 933,750 279
1,100M Blair County, Pa. Hosp. Auth. Rev.(Altoona Hosp.) 6 3/8%, 7/1/2014 1,060,125 316
Dauphin County, Pa. Gen. Auth. Hosp. Rev. (Hapsco-Western Hospital):
500M 6 1/4%, 7/1/2008 497,500 148
1,000M 6 1/8%, 7/1/2010 951,250 284
235M Delaware County, Pa. Auth. Hosp. Rev. (Memorial Hosp.) 7 1/8%, 8/15/2009 242,931 72
500M St. Mary Hosp. Auth., Langhorne, Pa. (Franciscan Health) 7%, 7/1/2014 504,375 150
500M Washington County, Pa. Auth. Lease Revenue 7.45%, 12/15/2018 553,750 165
- ------------------------------------------------------------------------------------------------------------------------
4,743,681 1,414
- ------------------------------------------------------------------------------------------------------------------------
Housing--1.5%
500M Pennsylvania Housing Finance Agency Single-Family Mtge. 7.15%, 4/1/2015 502,500 150
- ------------------------------------------------------------------------------------------------------------------------
Transportation--5.8%
1,600M Pennsylvania State Tpk. Commn. Oil Franchise Rev. 5 1/2%, 12/1/2012 1,430,000 426
260M Pennsylvania State Tpk. Commn. Tpk. Revenue 7.4%, 12/1/2017 286,975 86
225M Philadelphia, Pa. Regional Port Authority Lease Revenue 7.15%, 8/1/2020 241,594 72
- ------------------------------------------------------------------------------------------------------------------------
1,958,569 584
- ------------------------------------------------------------------------------------------------------------------------
Utilities--29.3%
Allegheny County, Pa. Sanitation Authority Sewer Revenue:
1,000M 6 1/4%, 12/1/2014 943,750 282
1,100M 6 1/2%, 12/1/2016 1,149,500 343
175M Beaver County, Pa. Indl. Dev. Auth. Poll. Ctl. (Ohio Edison) 7 3/4%, 9/1/2024 186,156 55
1,000M Center Township, Pa. Sewer Authority Series "A" 5 1/2%, 4/15/2016 883,750 263
230M Fairview Township, Pa. Authority Sewer Revenue 7%, 11/1/2020 245,813 73
Harrisburg, Pa. Authority Water Revenue:
250M 7%, 7/15/2015 267,500 80
350M 6 1/2%, 8/15/2016 364,875 109
1,000M Meadville, Pa. Area Water Authority 5 1/8%, 7/1/2014 835,000 249
1,000M North Pennsylvania, Pa. Water Authority 6 7/8%, 11/1/2019 1,007,500 300
1,000M North Wales, Pa. Water Authority 6 3/4%, 11/1/2017 996,250 297
1,500M Philadelphia, Pa. Water & Sewer 5%, 6/15/2019 1,166,250 348
Pittsburgh, Pa. Water & Sewer Auth. Water & Sewer System:
275M 6 3/4%, 9/1/2010 294,594 88
1,500M 6 1/2%, 9/1/2013 1,492,500 445
- ------------------------------------------------------------------------------------------------------------------------
9,833,438 2,932
- ------------------------------------------------------------------------------------------------------------------------
Other Revenue--17.1%
$1,000M Pennsylvania Intergovernmental Coop. Auth. Spl. Tax Rev. 7%, 6/15/2014 1,025,000 305
Pennsylvania State Industrial Development Authority:
1,000M 6%, 1/1/2012 927,500 277
2,750M 5 1/2%, 1/1/2014 2,358,125 703
1,000M Philadelphia, Pa. Municipal Authority Revenue 5 5/8%, 11/15/2014 877,500 262

17
<PAGE>

500M Somerset County, Pa. Gen. Auth. Comwlth. Lease Rev. 7%, 10/15/2013 536,250 160
- ------------------------------------------------------------------------------------------------------------------------
5,724,375 1,707
- ------------------------------------------------------------------------------------------------------------------------
Total Value of Municipal Bonds (cost $32,999,887 ) 32,303,131 9,631
- ------------------------------------------------------------------------------------------------------------------------
SHORT-TERM TAX EXEMPT INVESTMENT--1.5%
Hospital
500M Sayre, Pa. Health Care Facs. Auth. Variable Rate Note 5.25%
(cost $500,000) (a) 500,000 149
- ------------------------------------------------------------------------------------------------------------------------
Total Value of Municipal Investments (cost $33,499,887) 97.8% 32,803,131 9,780
Other Assets, Less Liabilities 2.2 738,977 220
- ------------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $33,542,108 $10,000
========================================================================================================================

(a) Interest rates are determined and reset weekly by the issuer.
Interest rate shown is the rate in effect at December 31, 1994.

See notes to financial statements
</TABLE>

<TABLE>
<CAPTION>
Portfolio of Investments
First Investors Multi-State Insured Tax Free Fund--VIRGINIA SERIES
December 31, 1994
- ------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL BONDS--98.8%
Certificates of Participation--1.9%
$ 275M Stafford County, Va. 7%, 11/1/2009 $ 296,312 $ 133
110M Virginia Beach, Va. 7 1/4%, 9/1/2010 120,313 54
- ------------------------------------------------------------------------------------------------------------------------
416,625 187
- ------------------------------------------------------------------------------------------------------------------------
Education--3.8%
750M James Madison University, Va. 5 1/4%, 6/1/2013 644,062 289
200M Virginia College Bldg. Auth. (Washington & Lee Univ.) 7%, 1/1/2015 215,000 96
- ------------------------------------------------------------------------------------------------------------------------
859,062 385
- ------------------------------------------------------------------------------------------------------------------------
General Obligation--24.4%
1,250M Chesapeake, Va. Public Improvement 5%, 5/1/2013 1,032,812 463
185M Hampton, Va. Public Improvement 6 5/8%, 1/1/2010 195,175 87
165M Leesburg, Va. 7%, 8/1/2010 176,756 79
750M Loudon County, Va. 5 1/2%, 10/1/2013 663,750 297

18
<PAGE>

100M Newport News, Va. General Improvement Series "A" 6 7/8%, 12/1/2009 107,375 48
170M Portsmouth, Va. Utility 6.8%, 8/1/2010 181,263 81
Richmond, Virginia:
500M 7.2%, 1/15/2007 535,000 239
600M 6 1/2%, 7/15/2012 633,000 284
Virginia Beach, Virginia:
1,000M 5.4%, 7/15/2008 910,000 408
500M 5.8%, 11/1/2011 460,625 206
Virginia State Public School Authority:
50M 7%, 6/1/2010 52,750 24
500M 6 1/2%, 8/1/2013 493,125 221
- ------------------------------------------------------------------------------------------------------------------------
5,441,631 2,437
- ------------------------------------------------------------------------------------------------------------------------
Hospital--12.1%
125M Charlottesville, Va. Indl. Dev. Auth. (Martha Jefferson Hosp.)
7 3/8%, 10/1/2020 137,500 61
1,000M Danville, Va. Ind. Dev. Auth. (Danville Reg. Med. Ctr.) 6 3/8%, 10/1/2014 966,250 433
Roanoke, Va. Indl. Dev. Auth. (Roanoke Memorial Hospitals Projects):
255M 7 1/4%, 7/1/2010 278,269 125
675M 6 1/8%, 7/1/2017 627,750 281
100M 7 1/4%, 7/1/2017 109,125 49
295M 6 1/2%, 7/1/2025 307,537 138
250M Winchester, Va. Indl. Dev. Auth. (Winchester Med.Ctr.) 7 1/4%, 1/1/2015 271,563 122
- ------------------------------------------------------------------------------------------------------------------------
2,697,994 1,209
- ------------------------------------------------------------------------------------------------------------------------
Housing--7.5%
1,000M Richmond, Va. Redev. & Hsg. Auth. (Old Manchester Proj.) 6.8%, 3/1/2015 1,005,000 450
750M Virginia State Hsg. Dev. Auth. Multi-Family Series "D" 5.85%, 11/1/2010 681,563 305
- ------------------------------------------------------------------------------------------------------------------------
1,686,563 755
- ------------------------------------------------------------------------------------------------------------------------
Transportation--12.7%
750M Metro Washington, D.C. Airport Revenue 5 3/8%, 10/1/2013 644,063 288
280M Richmond, Va. Metro. Auth. Expressway Rev. 7%, 10/15/2013 304,500 136
200M Virginia State Transportation Board Trans. Contract Rev. 6.8%, 5/15/2009 211,500 95
Washington, D.C. Metropolitan Area Transportation Authority:
1,000M 6%, 7/1/2008 963,750 432
750M 6%, 7/1/2010 719,062 322
- ------------------------------------------------------------------------------------------------------------------------
2,842,875 1,273
- ------------------------------------------------------------------------------------------------------------------------
Utilities--33.3%
Fairfax County, Va. Sewer Revenue:
750M 5 1/2%, 11/15/2013 662,812 297
325M 7%, 11/15/2016 350,594 157
170M Fairfax County, Va. Water Authority Water Revenue 7 1/4%, 1/1/2027 184,663 83
750M Frederick-Winchester Service Auth. Sewer System Rev. 5 3/4%, 10/1/2015 672,188 301
275M Henry County, Va. Pub. Svce. Auth. Water/Sewer Rev. 7.2%, 11/15/2019 298,719 134
750M Leesburg, Va. Utility System Revenue 6.3%, 7/1/2012 728,437 326
Loudoun County, Va. Sanitation Authority Water & Sewer Revenue:
500M 6 1/4%, 1/1/2010 481,875 216
1,000M 5 1/2%, 1/1/2015 876,250 392
500M Peppers Ferry, Va. Regl. Wastewater Treatment Auth. 5 3/8%, 3/1/2009 448,125 201
1,000M Prince William County, Va. Svce. Auth. Water Sewer Sys.Rev.

19
<PAGE>

6 1/2%, 7/1/2021 1,056,250 473
560M Roanoke County, Va. Water System Revenue 6 1/2%, 7/1/2021 591,500 265
625M Upper Occoquan Sewer Authority, Va. Regl. Sewer Rev. 6 1/2%, 7/1/2017 660,156 296
500M Virginia Beach, Va. Water & Sewer Revenue 5 1/8%, 2/1/2014 416,875 187
- ------------------------------------------------------------------------------------------------------------------------
7,428,444 3,328
- ------------------------------------------------------------------------------------------------------------------------
Other Revenue--3.1%
700M Frederick County, Va. Indl. Dev. Auth. (Govt. Complex) 6 1/2%, 12/1/2014 690,375 309
- ------------------------------------------------------------------------------------------------------------------------
Total Value of Municipal Bonds (cost $22,546,382) 22,063,569 9,883
- ------------------------------------------------------------------------------------------------------------------------
SHORT-TERM TAX EXEMPT INVESTMENT--0.5%
Hospital
Lynchburg, Va. Indl. Dev. Auth. (VHA Mid Atlantic/Cap) Variable
100M Rate Note Series "C" 5.25%, (cost $100,000)(a) 100,000 45
- ------------------------------------------------------------------------------------------------------------------------
Total Value of Municipal Investments (cost $22,646,382) 99.3% 22,163,569 9,928
Other Assets, Less Liabilities .7 161,371 72
- ------------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $22,324,940 $10,000
========================================================================================================================

(a) Interest rates are determined and reset weekly by the issuer.
Interest rate shown is the rate in effect at December 31, 1994.

See notes to financial statements
</TABLE>

<TABLE>
<CAPTION>
Statement of Assets and Liabilities
December 31, 1994

------------------- --------------------------------------------------------
FIRST INVESTORS FIRST INVESTORS MULTI-STATE INSURED TAX FREE FUND
NEW YORK INSURED --------------------------------------------------------
TAX FREE FUND, INC. CONNECTICUT FLORIDA GEORGIA MARYLAND
- ------------------------------------------- ------------------- --------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Assets
Investments in securities:
At identified cost $192,503,014 $14,558,229 $19,631,758 $2,048,505 $6,768,267
============ =========== =========== ========== ==========
At value (Note 1A) $195,326,425 $14,404,744 $19,344,625 $2,013,500 $6,668,819
Cash 300,141 67,288 13,110 46,877 96,713
Receivables:
Interest 4,727,451 305,112 353,441 36,942 141,908
Investment securities sold 5,723,436 -- 25,261 -- --
Shares sold 330,953 102,958 153,815 95,423 24,949
Other assets 10,408 16 31 -- 7
------------ ----------- ----------- ---------- ----------
Total Assets 206,418,814 14,880,118 19,890,283 2,192,742 6,932,396
------------ ----------- ----------- ---------- ----------

20
<PAGE>

Liabilities
Payables:
Investment securities purchased 10,761,714 -- -- 97,299 --
Shares redeemed 1,286,496 3,225 45,900 29,505 10,000
Dividends payable January 20, 1995 242,112 16,613 58,747 402 11,177
Accrued advisory fees 120,881 4,933 6,093 -- --
Accrued expenses 91,869 7,361 14,533 319 7,696
------------ ----------- ----------- ---------- ----------
Total Liabilities 12,503,072 32,132 125,273 127,525 28,873
------------ ----------- ----------- ---------- ----------
Net Assets $193,915,742 $14,847,986 $19,765,010 $2,065,217 $6,903,523
============ =========== =========== ========== ==========

Net Assets Consist of:
Capital paid in $193,447,274 $15,351,053 $20,300,612 $2,139,973 $7,132,309
Undistributed net investment income 43,318 5,255 16,464 1,050 2,316
Accumulated net realized loss on investments (2,398,261) (354,837) (264,933) (40,801) (131,654)
Net unrealized appreciation (depreciation)
in value of investments 2,823,411 (153,485) (287,133) (35,005) (99,448)
------------ ----------- ----------- ---------- ----------
Total $193,915,742 $14,847,986 $19,765,010 $2,065,217 $6,903,523
============ =========== =========== ========== ==========
Shares Outstanding (Note 2) 14,197,611 1,283,431 1,675,727 182,338 586,684
============ =========== =========== ========== ==========

Net Asset Value and Redemption
Price Per Share--Class A
(Note 2) $13.66 $11.57 $11.79 $11.33 $11.77
====== ====== ====== ====== ======

Maximum Offering Price Per Share--Class A
(Net Asset Value/.9375)*. $14.57 $12.34 $12.58 $12.09 $12.55
====== ====== ====== ====== ======

* On purchases of $25,000 or more, the sales charge is reduced.

See notes to financial statements

TABLE CONTINUED BELOW

<CAPTION>
-------------------------------------------------------------------------
FIRST INVESTORS MULTI-STATE INSURED TAX FREE FUND
-------------------------------------------------------------------------
NORTH
MASSACHUSETTS NEW JERSEY CAROLINA PENNSYLVANIA VIRGINIA
- ------------------------------------------- ------------------- --------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Assets
Investments in securities:
At identified cost $19,986,719 $54,113,009 $4,020,720 $33,499,887 $22,646,382
============ =========== =========== ========== ==========
At value (Note 1A) $20,353,894 $54,666,581 $3,762,713 $32,803,131 $22,163,569
Cash 75,845 471,126 88,391 75,364 253,395
Receivables:

21
<PAGE>

Interest 420,925 1,224,385 87,810 558,307 467,878
Investment securities sold -- 506,196 -- 882,795 106,594
Shares sold 67,384 211,277 367 220,403 81,209
Other assets 644 277 -- 81 47
------------ ----------- ----------- ---------- ----------
Total Assets 20,918,692 57,079,842 3,939,281 34,540,081 23,072,692
------------ ----------- ----------- ---------- ----------

Liabilities
Payables:
Investment securities purchased -- 1,459,226 -- 672,018 688,721
Shares redeemed 34,360 86,830 59,411 229,505 --
Dividends payable January 20, 1995 23,281 96,955 6,935 67,449 40,156
Accrued advisory fees 8,624 27,511 -- 13,932 7,374
Accrued expenses 14,196 30,529 650 15,069 11,501
------------ ----------- ----------- ---------- ----------
Total Liabilities 80,461 1,701,051 66,996 997,973 747,752
------------ ----------- ----------- ---------- ----------
Net Assets $20,838,231 $55,378,791 $3,872,285 $33,542,108 $22,324,940
============ =========== =========== ========== ==========

Net Assets Consist of:
Capital paid in $20,796,088 $55,028,696 $4,213,061 $34,301,834 $22,858,670
Undistributed net investment income 4,363 22,303 1,034 9,127 11,295
Accumulated net realized loss on investments (329,395) (225,780) (83,803) (72,097) (62,212)
Net unrealized appreciation (depreciation)
in value of investments 367,175 553,572 (258,007) (696,756) (482,813)
------------ ----------- ----------- ---------- ----------
Total $20,838,231 $55,378,791 $3,872,285 $33,542,108 $22,324,940
============ =========== =========== ========== ==========
Shares Outstanding (Note 2) 1,891,810 4,593,777 355,348 2,863,842 1,911,195
============ =========== =========== ========== ==========

Net Asset Value and Redemption
Price Per Share--Class A
(Note 2) $11.01 $12.06 $10.90 $11.71 $11.68
====== ====== ====== ====== ======

Maximum Offering Price Per Share--Class A
(Net Asset Value/.9375)*. $11.74 $12.86 $11.63 $12.49 $12.46
====== ====== ====== ====== ======

* On purchases of $25,000 or more, the sales charge is reduced.
See notes to financial statements
</TABLE>

<TABLE>
<CAPTION>
Statement of Operations
Year Ended December 31, 1994
--------------------------------------------------------------------------------
FIRST INVESTORS MULTI-STATE INSURED TAX FREE FUND
--------------------------------------------------------------------------------
NEW YORK INSURED

22
<PAGE>

TAX FREE FUND, INC. CONNECTICUT FLORIDA GEORGIA MARYLAND
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment Income
Interest income $13,385,056 $940,807 $1,226,395 $83,897 $389,869
------------ ----------- ----------- -------- ---------
Expenses:
Advisory fees (Note 5) 1,526,855 119,993 157,128 12,122 51,149
Distribution plan expenses (Note 6) 610,742 31,998 41,901 3,232 13,640
Shareholder servicing costs (Note 5) 167,766 14,952 16,280 2,979 12,142
Professional fees 46,113 12,470 14,937 10,997 7,281
Reports to shareholders 75,397 6,127 9,216 525 2,428
Bond insurance premiums (Note 1A) 111,751 3,568 1,316 163 1,426
Other expenses 66,390 6,200 7,630 1,179 3,494
------------ ----------- ----------- -------- ---------
Total expenses 2,605,014 195,308 248,408 31,197 91,560
Less: Expenses waived or assumed (Note 5) -- (55,997) (119,394) (27,965) (60,868)
------------ ----------- ----------- -------- ---------
Expenses - net 2,605,014 139,311 129,014 3,232 30,692
------------ ----------- ----------- -------- ---------
Net investment income 10,780,042 801,496 1,097,381 80,665 359,177
------------ ----------- ----------- -------- ---------
Realized and Unrealized Gain
(Loss) on Investments (Note 4):
Net realized loss on investments (2,398,261) (313,831) (264,933) (40,801) (115,472)
Net unrealized depreciation of investments (19,225,762) (1,639,963) (2,040,709) (110,067) (639,993)
------------ ----------- ----------- -------- ---------
Net loss on investments (21,624,023) (1,953,794) (2,305,642) (150,868) (755,465)
------------ ----------- ----------- -------- ---------
Net Decrease in Net Assets
Resulting from Operations $(10,843,981) $(1,152,298) $(1,208,261) $(70,203) $(396,288)
============ =========== =========== ======== =========

See notes to financial statements

TABLE CONTINUED BELOW

<CAPTION>
- --------------------------------------------------------------------------------
FIRST INVESTORS MULTI-STATE INSURED TAX FREE FUND
--------------------------------------------------------------------------------
NORTH
MASSACHUSETTS NEW JERSEY CAROLINA PENNSYLVANIA VIRGINIA
--------------------------------------------------------------------------------
<S>

Investment Income
Interest income $1,407,445 $3,732,427 $235,549 $2,075,225 $1,380,019
------------ ----------- --------- ----------- -----------
Expenses:
Advisory fees (Note 5) 165,005 451,268 32,570 259,689 176,624
Distribution plan expenses (Note 6) 44,001 120,338 8,684 69,250 47,100
Shareholder servicing costs (Note 5) 18,980 39,279 5,047 24,559 21,218
Professional fees 15,751 26,923 11,357 12,764 12,020
Reports to shareholders 8,007 19,289 1,210 11,223 8,745
Bond insurance premiums (Note 1A) 3,633 5,165 1,665 2,143 7,485

23
<PAGE>

Other expenses 8,995 22,760 1,860 11,158 8,552
------------ ----------- --------- ----------- -----------
Total expenses 264,372 685,022 62,393 390,786 281,744
Less: Expenses waived or assumed (Note 5) (55,002) (90,254) (53,709) (86,564) (82,424)
------------ ----------- --------- ----------- -----------
Expenses - net 209,370 594,768 8,684 304,222 199,320
------------ ----------- --------- ----------- -----------
Net investment income 1,198,075 3,137,659 226,865 1,771,003 1,180,699
------------ ----------- --------- ----------- -----------
Realized and Unrealized Gain
(Loss) on Investments (Note 4):
Net realized loss on investments (329,395) (225,780) (83,803) (72,097) (61,681)
Net unrealized depreciation of investments (2,097,875) (6,767,311) (437,561) (3,989,085) (2,611,443)
------------ ----------- --------- ----------- -----------
Net loss on investments (2,427,270) (6,993,091) (521,364) (4,061,182) (2,673,124)
------------ ----------- --------- ----------- -----------
Net Decrease in Net Assets
Resulting from Operations $(1,229,195) $(3,855,432) $(294,499) $(2,290,179) $(1,492,425)
============ =========== ========= =========== ===========

See notes to financial statements
</TABLE>

<TABLE>
<CAPTION>
Statement of Changes in Net Assets

---------------------------------------------------------------------------------------
FIRST INVESTORS MULTI-STATE INSURED TAX FREE FUND
---------------------------------------------------------------------------------------
FIRST INVESTORS
NEW YORK INSURED
TAX FREE FUND, INC. CONNECTICUT FLORIDA
---------------------------------------------------------------------------------------
Year Ended December 31 1994 1993 1994 1993 1994 1993
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Increase (Decrease) in Net Assets
from Operations
Net investment income $ 10,780,042 $ 10,629,827 $ 801,496 $ 700,629 $ 1,097,381 $ 892,710
Net realized gain
(loss) on investments (2,398,261) 1,956,805 (313,831) 19,159 (264,933) 153,384
Net unrealized appreciation
(depreciation) of investments (19,225,762) 5,717,430 (1,639,963) 1,092,677 (2,040,709) 1,130,563
------------ ------------ ----------- ----------- ----------- -----------
Net increase (decrease) in net
assets resulting from operations (10,843,981) 18,304,062 (1,152,298) 1,812,465 (1,208,261) 2,176,657
------------ ------------ ----------- ----------- ----------- -----------
Distributions to Shareholders:
From net investment income (10,924,339) (10,744,568) (801,765) (708,098) (1,102,831) (891,655)
From net realized gain from
security transactions -- (1,883,601) -- (14,569) -- (152,663)
In excess of realized gain from
security transactions -- -- (41,006) -- --

24
<PAGE>

------------ ------------ ----------- ----------- ----------- -----------
Total distributions (10,924,339) (12,628,169) (801,765) (763,673) (1,102,831) (1,044,318)
------------ ------------ ----------- ----------- ----------- -----------
Share Transactions--Class A (a)
Issued 24,920,224 35,247,740 2,473,254 6,895,332 4,193,910 9,026,307
Issued on reinvestments 8,056,192 9,501,950 613,310 572,413 513,004 491,864
Redeemed (29,259,279) (19,847,378) (3,486,374) (2,142,874) (4,027,836) (1,931,381)
------------ ------------ ----------- ----------- ----------- -----------
Net increase (decrease)
from share transactions 3,717,137 24,902,312 (399,810) 5,324,871 679,078 7,586,790
------------ ------------ ----------- ----------- ----------- -----------
Net increase (decrease) in net assets (18,051,183) 30,578,205 (2,353,873) 6,373,663 (1,632,014) 8,719,129
Net Assets
Beginning of year 211,966,925 181,388,720 17,201,859 10,828,196 21,397,024 12,677,895
------------ ------------ ----------- ----------- ----------- -----------
End of year+ $193,915,742 $211,966,925 $14,847,986 $17,201,859 $19,765,010 $21,397,024
============ ============ =========== =========== =========== ===========
+Includes undistributed net
investment income of $ 43,318 $ 187,615 $ 5,255 $ 5,524 $ 16,464 $ 21,914
============ ============ =========== =========== =========== ===========
(a)Shares Issued and
Redeemed--Class A (Note 2)
Issued 1,733,745 2,324,856 203,067 541,604 337,394 703,204
Issued on reinvestments 566,477 626,756 51,022 44,693 42,134 38,036
Redeemed (2,070,038) (1,309,852) (288,696) (167,023) (332,533) (150,883)
------------ ------------ ----------- ----------- ----------- -----------
Net increase (decrease) in shares 230,184 1,641,760 (34,607) 419,274 46,995 590,357
============ ============ =========== =========== =========== ===========

See notes to financial statements

TABLE CONTINUED BELOW

---------------------------------------------------------
FIRST INVESTORS MULTI-STATE INSURED TAX FREE FUND
---------------------------------------------------------

GEORGIA MARYLAND
------------------------------------------------------
Year Ended December 31 1994 1993 1994 1993
------------------------------------------------------
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets
from Operations
Net investment income $ 80,665 $ 42,700 $ 359,177 $ 261,536
Net realized gain
(loss) on investments (40,801) 1,790 (115,472) 4,285
Net unrealized appreciation
(depreciation) of investments (110,067) 68,450 (639,993) 399,808
---------- ---------- ---------- ----------
Net increase (decrease) in net
assets resulting from operations (70,203) 112,940 (396,288) 665,629

25
<PAGE>

---------- ---------- ---------- ----------
Distributions to Shareholders:
From net investment income (79,754) (43,118) (362,227) (261,400)
From net realized gain from
security transactions -- (588) -- (1,759)
In excess of realized gain from
security transactions -- -- -- (16,183)
---------- ---------- ---------- ----------
Total distributions (79,754) (43,706) (362,227) (279,342)
---------- ---------- ---------- ----------
Share Transactions--Class A (a)
Issued 927,355 1,030,007 1,928,630 2,781,436
Issued on reinvestments 73,507 39,557 254,066 199,323
Redeemed (254,666) (34,706) (1,164,023) (298,784)
---------- ---------- ---------- ----------
Net increase (decrease)
from share transactions 746,196 1,034,858 1,018,673 2,681,975
---------- ---------- ---------- ----------
Net increase (decrease) in net assets 596,239 1,104,092 260,158 3,068,262
Net Assets
Beginning of year 1,468,978 364,886 6,643,365 3,575,103
---------- ---------- ---------- ----------
End of year+ $2,065,217 $1,468,978 $6,903,523 $6,643,365
========== ========== ========== ==========
+Includes undistributed net
investment income of $ 1,050 $ 139 $ 2,316 $ 5,366
========== ========== ========== ==========
(a)Shares Issued and
Redeemed--Class A (Note 2)
Issued 80,499 85,247 156,671 217,830
Issued on reinvestments 6,313 3,252 20,852 15,474
Redeemed (22,084) (2,830) (96,175) (23,191)
---------- ---------- ---------- ----------
Net increase (decrease) in shares 64,728 85,669 81,348 210,113
========== ========== ========== ==========

See notes to financial statements

TABLE CONTINUED BELOW

<CAPTION>
Statement of Changes in Net Assets)

-------------------------------------------------------------------------------------
FIRST INVESTORS MULTI-STATE TAX FREE FUND
-------------------------------------------------------------------------------------
MASSACHUSETTS NEW JERSEY NORTH CAROLINA
-------------------------------------------------------------------------------------
Year Ended December 31 1994 1993 1994 1993 1994 1993
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Increase (Decrease) in Net Assets
from Operations
Net investment income $ 1,198,075 $ 1,184,371 $ 3,137,659 $ 3,097,264 $ 226,865 $ 129,186
Net realized gain (loss)

26
<PAGE>

on investments (329,395) 262,882 (225,780) 484,191 (83,803) 14,078
Net unrealized appreciation
(depreciation) of investments (2,097,875) 1,017,370 (6,767,311) 3,741,512 (437,561) 166,196
----------- ----------- ----------- ----------- ---------- ----------
Net increase (decrease) in net
assets resulting from operations (1,229,195) 2,464,623 (3,855,432) 7,322,967 (294,499) 309,460
----------- ----------- ----------- ----------- ---------- ----------
Distributions to Shareholders:
From net investment income (1,203,624) (1,195,356) (3,146,005) (3,112,114) (226,667) (129,454)
From net realized gain from
security transactions -- (262,882) -- (484,191) -- (13,491)
In excess of realized gain from
security transactions -- -- -- -- -- --
----------- ----------- ----------- ----------- ---------- ----------
Total distributions (1,203,624) (1,458,238) (3,146,005) (3,596,305) (226,667) (142,945)
----------- ----------- ----------- ----------- ---------- ----------
Share Transactions--Class A (a)
Issued 2,473,916 4,845,856 7,713,722 13,337,259 1,415,758 2,605,521
Issued on reinvestments 933,965 1,157,295 2,084,420 2,387,643 127,189 81,454
Redeemed (3,789,844) (3,423,407) (11,976,023) (9,265,052) (1,032,579) (53,980)
----------- ----------- ----------- ----------- ---------- ----------
Net increase (decrease)
from share transactions (381,963) 2,579,744 (2,177,881) 6,459,850 510,368 2,632,995
----------- ----------- ----------- ----------- ---------- ----------
Net increase (decrease) in net assets (2,814,782) 3,586,129 (9,179,318) 10,186,512 (10,798) 2,799,510
Net Assets
Beginning of year 23,653,013 20,066,884 64,558,109 54,371,597 3,883,083 1,083,573
----------- ----------- ----------- ----------- ---------- ----------
End of year+ $20,838,231 $23,653,013 $55,378,791 $64,558,109 $3,872,285 $3,883,083
=========== =========== =========== =========== ========== ==========
+Includes undistributed
net investment income of $ 4,363 $ 9,912 $ 22,303 $ 30,649 $ 1,034 $ 836
=========== =========== =========== =========== ========== ==========
(a)Shares Issued and
Redeemed--Class A (Note 2)
Issued 214,343 397,068 601,287 1,006,097 121,402 218,843
Issued on reinvestments 81,626 94,669 166,135 178,780 11,292 6,758
Redeemed (329,777) (279,963) (951,262) (697,805) (93,643) (4,568)
----------- ----------- ----------- ----------- ---------- ----------
Net increase (decrease) in shares (33,808) 211,774 (183,840) 487,072 39,051 221,033
=========== =========== =========== =========== ========== ==========

See notes to financial statements

TABLE CONTINUED BELOW

-----------------------------------------------------------
FIRST INVESTORS MULTI-STATE TAX FREE FUND
-----------------------------------------------------------
PENNSYLVANIA VIRGINIA
-----------------------------------------------------------
Year Ended December 31 1994 1993 1994 1993

27
<PAGE>

-----------------------------------------------------------
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets
from Operations
Net investment income $ 1,771,003 $ 1,600,264 $ 1,180,699 $ 1,045,066
Net realized gain (loss)
on investments (72,097) 415,726 (61,681) 153,737
Net unrealized appreciation
(depreciation) of investments (3,989,085) 2,005,862 (2,611,443) 1,295,816
----------- ----------- ----------- -----------
Net increase (decrease) in net
assets resulting from operations (2,290,179) 4,021,852 (1,492,425) 2,494,619
----------- ----------- ----------- -----------
Distributions to Shareholders:
From net investment income (1,777,494) (1,588,147) (1,175,046) (1,047,903)
From net realized gain from
security transactions -- (404,132) -- (153,737)
In excess of realized gain from
security transactions -- -- -- --
----------- ----------- ----------- -----------
Total distributions (1,777,494) (1,992,279) (1,175,046) (1,201,640)
----------- ----------- ----------- -----------
Share Transactions--Class A (a)
Issued 5,661,896 10,379,865 3,263,981 8,272,351
Issued on reinvestments 1,033,699 1,172,678 721,894 784,569
Redeemed (4,599,995) (4,103,687) (3,677,279) (2,173,312)
----------- ----------- ----------- -----------
Net increase (decrease)
from share transactions 2,095,600 7,448,856 308,596 6,883,608
----------- ----------- ----------- -----------
Net increase (decrease) in net assets (1,972,073) 9,478,429 (2,358,875) 8,176,587
Net Assets
Beginning of year 35,514,181 26,035,752 24,683,815 16,507,228
----------- ----------- ----------- -----------
End of year+ $33,542,108 $35,514,181 $22,324,940 $24,683,815
=========== =========== =========== ===========
+Includes undistributed
net investment income of $ 9,127 $ 15,618 $ 11,295 $ 5,642
=========== =========== =========== ===========
(a)Shares Issued and
Redeemed--Class A (Note 2)
Issued 457,976 803,680 265,790 648,409
Issued on reinvestments 84,890 90,262 59,666 61,031
Redeemed (377,755) (318,749) (304,592) (169,025)
----------- ----------- ----------- -----------
Net increase (decrease) in shares 165,111 575,193 20,864 540,415
=========== =========== =========== ===========

See notes to financial statements
</TABLE>

Notes to Financial Statements
First Investors New York Insured Tax Free Fund, Inc.
28
<PAGE>

First Investors Multi-State Insured Tax Free Fund
Connecticut, Florida, Georgia, Maryland, Massachusetts,
New Jersey, North Carolina, Pennsylvania and Virginia Series

1. Significant Accounting Policies--First Investors New York Insured
Tax Free Fund, Inc. and First Investors Multi-State Insured Tax Free
Fund (collectively, the "Funds") are registered under the Investment
Company Act of 1940 (the "1940 Act") as diversified, open-end
management investment companies. First Investors New York Insured Tax
Free Fund, Inc. ("New York Insured") consists of a single investment
series and First Investors Multi-State Insured Tax Free Fund ("Multi-
State Insured") consists of seventeen separate investment series. This
report relates to New York Insured and the nine series of Multi-State
Insured listed above (singularly and collectively, "Series"). Multi-
State Insured operates as a series fund, issuing shares of beneficial
interest in each Series and accounts separately for the assets,
liabilities and operations of each Series.

A. Security Valuation--The municipal securities in which the Series
invest 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/Trustees. The pricing service considers security type,
rating, market condition and yield data, as well as market quotations
and prices provided by market makers in determining valuations. "When
Issued Securities" are reflected in the assets of the Series as of the
date the securities are purchased.

The municipal bonds held by the Series 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
Series 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. Each Series 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 Series to continue to
qualify as regulated investment companies, which can distribute tax
exempt dividends, by complying with the provisions available to certain
investment companies, as defined in the Internal Revenue Code. The
Series make distributions of income and net realized capital gains
sufficient to relieve them from all, or substantially all, federal
income taxes. At December 31, 1994, the Series had the following
capital loss carryovers, expiring in the year 2002:

<TABLE>
<CAPTION>
<S> <C>
NEW YORK INSURED $1,016,113
MULTI-STATE INSURED
-------------------
CONNECTICUT Series 329,239
FLORIDA Series 176,344
GEORGIA Series 18,533

29
<PAGE>

MARYLAND Series 111,759
MASSACHUSETTS Series 322,147
NEW JERSEY Series 148,482
NORTH CAROLINA Series 68,000
PENNSYLVANIA Series 60,264
VIRGINIA Series 62,212
</TABLE>

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. To the extent
that net realized capital gain can be offset by capital loss
carryovers, it is the policy of the Series not to distribute such gain.

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, deferral of wash
sales and post October losses.

D. Expense Allocation--Direct expenses attributable to a Series of
Multi-State Insured are charged to and paid from the assets of that
Series. Indirect or general expenses of Multi-State Insured are
allocated among and charged to the assets of each Series on a fair and
equitable basis, which may be based on the relative assets of each
Series or the nature of the services performed and relative
applicability to each Series.

E. 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.

2. Fund Shares--The Articles of Incorporation of New York Insured
authorize the Fund to issue 1,000,000,000 shares of capital stock of
$.01 par value. The Declaration of Trust of Multi-State Insured permits
the Fund to issue an unlimited number of shares of beneficial interest
in each Series. By action of the Board of Directors of New York
Insured, the Articles of Incorporation were amended on October 21,
1994, so that of the 1,000,000,000 shares originally authorized,
500,000,000 shares were allocated as Class A and 500,000,000 shares
were allocated as Class B capital stock. Also, on September 22, 1994,
the Board of Trustees of Multi-State Insured established an unlimited
number of Class A and an unlimited number of Class B shares of
beneficial interest. As of December 31, 1994, only Class A shares have
been issued by either Fund.

3. Concentration of Credit Risk--The Series invest in debt instruments
of municipal issuers whose ability to meet their obligations may be
affected by economic developments in a State, industry or region.

4. Security Transactions--For the year ended December 31, 1994,
purchases and sales of municipal securities were as follows:
<TABLE> 30
<PAGE>

<CAPTION>
Cost Proceeds
of of
Purchases Sales
-------------- --------------
<S> <C> <C>
NEW YORK INSURED $124,389,966 $109,436,929
MULTI-STATE INSURED
---------------------
CONNECTICUT Series 9,660,816 9,502,542
FLORIDA Series 20,375,213 19,442,552
GEORGIA Series 1,901,913 1,201,113
MARYLAND Series 3,863,867 2,878,776
MASSACHUSETTS Series 14,194,253 13,634,743
NEW JERSEY Series 34,952,953 35,467,568
NORTH CAROLINA Series 2,974,198 2,468,352
PENNSYLVANIA Series 29,387,625 26,350,063
VIRGINIA Series 13,353,627 12,434,565
</TABLE>

At December 31, 1994, aggregate cost and net unrealized appreciation
(depreciation) of securities for federal income tax purposes were as
follows:

<TABLE>
<CAPTION>
Net
Gross Gross Unrealized
Aggregate Unrealized Unrealized Appreciation
Cost Appreciation Depreciation (Depreciation)
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
NEW YORK INSURED $192,503,014 $7,381,615 $4,558,204 $2,823,411
MULTI-STATE INSURED
-------------------
CONNECTICUT Series 14,558,229 173,580 327,065 (153,485)
FLORIDA Series 19,631,758 349,254 636,387 (287,133)
GEORGIA Series 2,048,505 10,573 45,578 (35,005)
MARYLAND Series 6,768,267 107,886 207,334 (99,448)
MASSACHUSETTS Series 19,986,719 807,748 440,573 367,175
NEW JERSEY Series 54,113,009 1,764,093 1,210,521 553,572
NORTH CAROLINA Series 4,020,720 3,887 261,894 (258,007)
PENNSYLVANIA Series 33,499,887 637,914 1,334,670 (696,756)
VIRGINIA Series 22,646,382 484,874 967,687 (482,813)
</TABLE>

5. Advisory Fee and Other Transactions With Affiliates (Also see Note
6)--Certain officers and directors/trustees of the Series are officers
and directors of the Series' investment adviser, First Investors
Management Company, Inc. ("FIMCO"), their underwriter, First Investors
Corporation ("FIC") and/or their transfer agent, Administrative Data
Management Corp. ("ADM"). Officers and directors/trustees of the Series
received no remuneration from the Series for serving in such
capacities. Their remuneration (together with certain other expenses of
the Series) is paid by FIMCO or FIC.
31
<PAGE>

The Investment Advisory Agreements provide as compensation to FIMCO an
annual fee, payable monthly, at the rate of .75% on the first $250
million of the average daily net assets of New York Insured and of the
average daily net assets of each Series of the Multi-State Insured,
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, 1994, advisory fees of New York Insured amounted to $1,526,855. For
the same period, advisory fees for the nine Series of Multi-State
Insured included in this report amounted to $1,425,548, of which
$585,477 was waived; other expenses in the amount of $35,181 were
assumed by FIMCO.

For the year ended December 31, 1994, FIC, as underwriter, received
$425,087 in commissions on sales of shares of New York Insured, after
allowing $30,213 to other dealers, and $918,064 in commissions on sales
of shares of the nine Series of Multi-State Insured included in this
report, after allowing $260,188 to other dealers. Shareholder servicing
costs of New York Insured and the nine Series of Multi-State Insured
consisted of $167,766, and $155,436, respectively, in transfer agent
fees and out of pocket expenses accrued to ADM. Transfer agent fees and
out of pocket expenses attributable to the Georgia, Maryland and North
Carolina Series of Multi-State Insured, in the amount of $11,519, were
waived by the transfer agent for the year ended December 31, 1994.

6. Distribution Plan--Pursuant to a Distribution Plan adopted by the
Series under Rule 12b-1 of the 1940 Act, each Series is authorized to
pay FIC a fee up to .30% of its respective average net assets, on an
annualized basis each fiscal 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 that series. For
the year ended December 31, 1994, these fees amounted to $610,742 and
$380,144 respectively, for New York Insured and the nine Series of
Multi-State Insured.
32

<PAGE>

Independent Auditor's Report

To the Shareholders and Boards of Directors/Trustees of
First Investors New York Insured Tax Free Fund, Inc. and
First Investors Multi-State Insured Tax Free Fund
Connecticut, Florida, Georgia, Maryland, Massachusetts,
New Jersey, North Carolina, Pennsylvania and Virginia Series

We have audited the accompanying statement of assets and liabilities,
including the portfolios of investments, of First Investors New York
Insured Tax Free Fund, Inc. and the nine series of First Investors
Multi-State Insured Tax Free Fund listed above as of December 31, 1994,
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 the periods indicated
thereon. These financial statements and financial highlights are the
responsibility of the Funds' 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 audits
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, 1994, 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 New York Insured Tax Free Fund,
Inc. and each of the nine series of First Investors Multi-State Insured
Tax Free Fund listed above as of December 31, 1994, and the results of
their operations, changes in their net assets and financial highlights
for each of the respective periods presented, in conformity with
generally accepted accounting principles.

Tait, Weller & Baker

Philadelphia, Pennsylvania
January 31, 1995
33
<PAGE>

<TABLE>
<CAPTION>
Portfolio of Investments
First Investors Multi-State Insured Tax Free Fund--ARIZONA SERIES
December 31, 1994

- --------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL BONDS--97.6%
Certificates of Participation--11.7%
Arizona State:
$ 100M 6.1%, 5/1/2007 $ 98,000 $ 111
375M 6 1/4%, 9/1/2010 360,469 410
Arizona State Municipal Financing Program:
100M 5.9%, 8/1/2009 94,250 107
100M 7.7%, 8/1/2010 110,625 126
400M University of Arizona Administration & Parking Facs. 5 3/4%, 7/15/2009 369,000 419
- --------------------------------------------------------------------------------------------------------------------------------
1,032,344 1,173
- --------------------------------------------------------------------------------------------------------------------------------
Education--1.7%
140M Arizona State University Revenue 7%, 7/1/2007 150,850 171
- --------------------------------------------------------------------------------------------------------------------------------
General Obligation--43.2%
600M Chandler, Arizona 6 1/4%, 7/1/2011 585,750 666
400M Gilbert, Arizona 5 1/2%, 7/1/2013 348,000 395
Maricopa County, Arizona:
235M School District #3 (Tempe) 7.3%, 7/1/2009 256,150 291
400M School District #11 (Peoria) 6.1%, 7/1/2010 387,000 440

34
<PAGE>

100M School District #14 (Creighton) 7 7/8%, 7/1/2006 113,125 129
School District #41 (Gilbert):
1,000M Zero Coupon 1/1/2008 430,000 488
100M 6 1/2%, 7/1/2008 104,250 118
300M School District #68 (Alhambra) 6 3/4%, 7/1/2014 304,875 346
100M School District #92 (Pendergast Elementary) 6 5/8%, 7/1/2005 105,500 120
200M School District #231 (Tempe) 7%, 7/1/2008 214,750 244
225M Mohave County, Arizona High School District #30, 6.7%, 7/1/2011 238,500 271
145M Pima County, Arizona School District #13 (Tanque Verde) 6.7%, 7/1/2010 146,269 166
140M Puerto Rico Commonwealth 6.6%, 7/1/2013 148,925 169
200M Santa Cruz County, Arizona School District #35, 6%, 7/1/2008 191,250 217
230M Yavapai County, Arizona School District #6 (Cottonwood-Oak Creek)
6.7%, 7/1/2009 231,150 263
- --------------------------------------------------------------------------------------------------------------------------------
3,805,494 4,323
- --------------------------------------------------------------------------------------------------------------------------------
Hospital--20.3%
135M Arizona Health Facilities Authority (Phoenix Baptist) 6 1/4%, 9/1/2011 128,925 146
Maricopa County, Arizona Ind. Dev. Auth., Health Facs. Rev.:
285M Catholic Healthcare West 5 3/4%, 7/1/2011 258,994 294
50M John Lincoln Hospital 7 1/2%, 12/1/2013 53,688 61
650M Samaritan Health Services 7%, 12/1/2016 680,062 773
100M Mohave County, Arizona Hosp. Dist. #1 (Kingman Reg. Med. Ctr.)
6.45%, 6/1/2008 100,125 114
300M Pima County, Arizona Ind. Dev. Auth. (Tucson Med. Ctr.) 6 3/8%, 4/1/2012 290,625 330
250M University of Arizona Medical Center Corp. Hosp. Rev. 6 7/8%, 7/1/2021 269,062 306
- --------------------------------------------------------------------------------------------------------------------------------
1,781,481 2,024
- --------------------------------------------------------------------------------------------------------------------------------
Transportation--4.2%
385M Phoenix, Arizona Airport Revenue 6 1/4%, 7/1/2012 372,006 423
35

<PAGE>

- --------------------------------------------------------------------------------------------------------------------------------
Utilities--11.4%
250M Arizona State Wastewater Management Authority 5.95%, 7/1/2012 233,438 265
200M Central Arizona Water Conservation District Zero Cpn. 5/1/2005 104,750 119
225M Gilbert, Arizona Water & Wastewater 6 1/2%, 7/1/2012 221,906 252
100M Peoria, Arizona Water & Sewer Revenue 6.6%, 7/1/2004 103,750 118
55M Pima County, Arizona Sewer Revenue 6 3/4%, 7/1/2015 58,506 67
100M Salt River Project, Arizona Electric System Revenue 6.2%, 1/1/2012 94,625 107
205M Tuscon, Arizona Water Revenue 5 3/4%, 7/1/2012 186,038 211
- --------------------------------------------------------------------------------------------------------------------------------
1,003,013 1,139
- --------------------------------------------------------------------------------------------------------------------------------
Other Revenue--5.1%
250M Phoenix, Arizona Civic Impt. Mun. Facs. Excise Tax Rev. 6.6%, 7/1/2008 253,750 288
100M Phoenix, Arizona Street & Highway User Revenue 6 1/4%, 7/1/2011 97,500 111
100M Tucson, Arizona Local Business Development Fin. Corp. 6 1/4%, 7/1/2012 96,125 109
- --------------------------------------------------------------------------------------------------------------------------------
447,375 508
- --------------------------------------------------------------------------------------------------------------------------------
Total Value of Municipal Bonds (cost $8,662,388) 97.6% 8,592,563 9,761
Other Assets, Less Liabilities 2.4 210,756 239
- --------------------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $8,803,319 $10,000
================================================================================================================================

See notes to financial statements

Portfolio of Investments
First Investors Multi-State Insured Tax Free Fund--CALIFORNIA SERIES
December 31, 1994 36

<PAGE>

- --------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL BONDS--98.5%
Certificates of Participation--12.7%
$ 100M Alameda, Calif. Sewer Impt. Fin. Corp. 7.4%, 3/1/2018 $ 104,125 $ 68
500M Castaic Lake Water Agency Water System Imp. Proj. 7%, 8/1/2012 523,125 341
500M San Diego County, Calif. Inmate Reception Center 6 3/4%, 8/1/2014 501,875 327
600M San Diego County, Calif. Water 5.681%, 4/22/2009 561,000 366
240M Yolo County, Calif. Flood Control & Water Consv. 7 1/8%, 7/15/2015 259,500 169
- --------------------------------------------------------------------------------------------------------------------------------
1,949,625 1,271
- --------------------------------------------------------------------------------------------------------------------------------
General Obligation--7.0%
370M Greenfield, Calif. School District 7.1%, 8/1/2012 380,175 248
750M Walnut Valley, Calif. School District 6%, 8/1/2012 700,313 457
- --------------------------------------------------------------------------------------------------------------------------------
1,080,488 705
- --------------------------------------------------------------------------------------------------------------------------------
Hospital--5.4%
California Health Facilities Financing Authority Revenue:
275M Catholic Hospital 7%, 7/1/2020 295,625 193
250M Cedars Sinai Medical Center 7%, 11/1/2007 269,375 176
155M Episcopal Homes 7.85%, 7/1/2015 158,488 103
100M R.F. Kennedy Hospital 7 3/4%, 3/1/2014 102,875 67
- --------------------------------------------------------------------------------------------------------------------------------
826,363 539

<PAGE>

- --------------------------------------------------------------------------------------------------------------------------------
Transportation--3.5%
500M Los Angeles County, Calif. Trans. Comm. Sales Tax Rev. 6 3/4%, 7/1/2020 535,000 349
- --------------------------------------------------------------------------------------------------------------------------------
Utilities--14.8%
300M California State Dept. Water Res. (Central Valley Proj.) 6.9%, 12/1/2025 321,375 210
250M Contra Costa, Calif. Water District 5 3/4%, 10/1/2014 220,313 144
East Bay Municipal Utility District:
750M 6.4%, 6/1/2013 728,437 475
340M 7.2%, 6/1/2020 370,175 241
Los Angeles, Calif. Wastewater System Revenue:
250M 7%, 6/1/2011 255,000 166
150M 7.1%, 2/1/2021 161,250 105
250M Riverside, Calif. Sewer Revenue 5%, 8/1/2010 209,687 137
- --------------------------------------------------------------------------------------------------------------------------------
2,266,237 1,478
- --------------------------------------------------------------------------------------------------------------------------------
Other Revenue--55.1%
500M Barstow, Calif. Redevelopment Agency 7%, 9/1/2014 523,750 342
110M California Public Capital Impt. Fin. Auth. Rev. 8.1%, 3/1/2018 116,050 76
1,315M California State Public Works Board 6 1/2%, 12/1/2008 1,313,356 856
290M Compton, Calif. Community Redevelopment Agency 7 1/2%, 8/1/2013 303,775 198
1,000M Long Beach, Calif. Fing. Auth. Rev. 6%, 11/1/2017 918,750 599
800M Orange County, Calif. Sales Tax Rev. 5.958%, 2/15/2011 761,000 496
300M Sacramento, Calif. Redev. Agency Merged Downtown Redev. Proj.
6 3/4%, 11/1/2005 311,250 203
640M San Francisco, Calif. City & Cnty. Pkg. Auth. Rev. 7%, 6/1/2011 645,600 421
500M San Francisco, Calif. City & Cnty. Redev. Agy. (Moscone Ctr.)
6 3/4%, 7/1/2015 497,500 324
250M San Francisco, Calif. City & Cnty. Redev. Fin. Auth. 6 7/8%, 8/1/2020 268,750 175
500M San Rafael, Calif. Redev. Agency 6.45%, 12/1/2017 482,500 315

<PAGE>

500M Santa Ana, Calif. Fin. Auth. Lease Rev. 6 1/4%, 7/1/2015 475,000 310
750M Santa Margarita/Dana Point, Calif. Imp. Dist. 7 1/4%, 8/1/2010 808,125 527
South Orange County, Calif. Public Finance Authority:
500M 6 1/2%, 8/15/2010 503,125 328
500M 7%, 9/1/2011 523,125 341
- --------------------------------------------------------------------------------------------------------------------------------
8,451,656 5,511
- --------------------------------------------------------------------------------------------------------------------------------
Total Value of Municipal Bonds (cost $15,148,422) 98.5% 15,109,369 9,853
Other Assets , Less Liabilities 1.5 226,057 147
- --------------------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $15,335,426 $10,000
================================================================================================================================

See notes to financial statements
</TABLE>

<TABLE>
<CAPTION>
Portfolio of Investments
First Investors Multi-State Insured Tax Free Fund--COLORADO SERIES
December 31, 1994

<PAGE>

- --------------------------------------------------------------------------------------------------------------------------------
231,250 744
- --------------------------------------------------------------------------------------------------------------------------------
General Obligation--48.2%
150M Bayfield, Colo. School District #10, 6 1/2%, 6/1/2009 151,875 488
45M Denver, Colo. City & County School District #1, 6.35%, 12/15/2012 46,688 150
250M Douglas County., Colo. School District #RE 1, 8%, 12/15/2009 291,250 936
150M Eagle Garfield & Routt Cntys., Colo. Sch. Dist. #RE 50J, 6.3%, 12/1/2012 145,500 468
150M El Paso County, Colo. School District #020, 6.2%, 6/15/2007 148,500 478
150M Garfield County, Colo. School District #RE-2, 6.15%, 12/1/2009 145,125 467
150M Garfield Pitkin & Eagle Cntys., Colo. Sch. Dist. #RE 1, 6.6%, 12/15/2014 148,500 478
40M Lafayette, Colo. 6 1/4%, 12/1/2012 39,000 125
150M Northglenn, Colo. Refunding Water & Sewer 5 1/2%, 12/1/2009 134,063 431
100M Summit County, Colo. School District #RE 1, 6.55%, 12/1/2009 100,625 324
150M Yuma Hospital District, Colo. 6.4%, 11/1/2014 147,187 473
- --------------------------------------------------------------------------------------------------------------------------------
1,498,313 4,818
- --------------------------------------------------------------------------------------------------------------------------------
Hospital--10.6%
Colorado Health Facilities Authority Revenue:
250M North Colorado Medical 5.95%, 5/15/2012 233,125 749
100M Sisters of Charity 6 1/4%, 5/15/2012 97,250 313
- --------------------------------------------------------------------------------------------------------------------------------
330,375 1,062
- --------------------------------------------------------------------------------------------------------------------------------
Utilities--15.0%
125M Metro Wastewater Reclamation District, Colo. 4 3/4%, 4/1/2012 103,125 332
135M Project Seven Water Authority, Colo. 5.7%, 12/1/2012 123,187 396
150M Westminster, Colo. Water/Wastewater Util. Enterprise 6%, 12/1/2009 144,563 465
100M Woodland Park, Colo. Wastewater Util. Rev. 6.05%, 12/1/2013 94,250 303

40
<PAGE>

- --------------------------------------------------------------------------------------------------------------------------------
465,125 1,496
- --------------------------------------------------------------------------------------------------------------------------------
Other Revenue--16.0%
150M Aurora, Colo. Municipal Building Corp. 1st Mtge. 9.2%, 12/1/2008 166,687 536
100M Pueblo, Colo. Urban Renewal Auth. Tax Increment Rev. 6.05%, 12/1/2012 94,500 304
250M Puerto Rico Mun. Fin. Agy. Series "A" 6%, 7/1/2014 235,312 757
- --------------------------------------------------------------------------------------------------------------------------------
496,499 1,597
- --------------------------------------------------------------------------------------------------------------------------------
Total Value of Municipal Bonds (cost $3,119,108) 97.2% 3,021,562 9,717
Other Assets, Less Liabilities 2.8 88,029 283
- --------------------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $3,109,591 $10,000
================================================================================================================================

See notes to financial statements
</TABLE>

<TABLE>
<CAPTION>
Portfolio of Investments
First Investors Multi-State Insured Tax Free Fund--MICHIGAN SERIES
December 31, 1994

41
<PAGE>

MUNICIPAL BONDS--99.1%
Education--1.4%
$400M Central Michigan University Revenue 7%, 10/1/2010 $ 431,000 $ 142
- --------------------------------------------------------------------------------------------------------------------------------
General Obligation--45.5%
325M Chippewa Valley, Michigan Schools 7.1%, 5/1/2013 353,438 116
230M Comstock, Michigan School District 6 7/8%, 5/1/2014 244,663 80
425M Detroit, Michigan 7.2%, 5/1/2009 459,000 151
350M East Detroit, Michigan School District 7%, 5/1/2008 366,188 121
380M Forest Hills, Michigan Public Schools 7 3/8%, 5/1/2015 411,825 136
1,325M Gibralter, Michigan Public School District 5 1/2%, 5/1/2014 1,149,438 379
1,000M Grand Haven, Michigan Public School District 6.05%, 5/1/2014 931,250 307
1,000M Grand Ledge, Michigan Public School District 7 7/8%, 5/1/2011 1,103,750 364
1,000M Gull Lake, Michigan Community School District Zero Coupon 5/1/2013 297,500 98
450M Haslett, Michigan Public School District 7 1/2%, 5/1/2020 489,937 161
2,060M Holland, Michigan School District Zero Coupon 5/1/2016 486,675 160
2,000M Howell, Michigan Public Schools Zero Coupon 5/1/2017 450,000 148
1,000M Huron, Michigan School District Zero Coupon 5/1/2015 252,500 83
450M Inkster, Michigan School District 7%, 5/1/2019 483,750 159
275M Jackson County, Michigan 6 3/4%, 4/1/2011 288,062 95
1,000M Lake Orion, Michigan Community School District 7%, 5/1/2020 1,018,750 336
1,000M Michigan State Environmental Protection Program 6 1/4%, 11/1/2012 973,750 321
450M Oak Park, Michigan 7.2%, 5/1/2011 495,562 163
270M Oakland County, Michigan 7.1%, 5/1/2007 281,813 93
800M Rochester, Michigan School District 5 5/8%, 5/1/2011 725,000 239
300M Rockford, Michigan Public Schools 7 3/8%, 5/1/2019 325,125 107
250M Romulus, Michigan Community Schools 6 3/4%, 5/1/2020 267,187 88
380M Saline, Michigan Building Authority 7.1%, 7/1/2009 399,475 132
140M St. Clair, Michigan 7.4%, 11/1/2011 150,150 49
450M White Cloud, Michigan Public Schools 7.1%, 5/1/2020 487,125 160

42
<PAGE>

1,000M Zeeland, Michigan Public Schools 6%, 5/1/2014 928,750 306
- --------------------------------------------------------------------------------------------------------------------------------
13,820,663 4,552
- --------------------------------------------------------------------------------------------------------------------------------
Hospital--3.2%
1,000M Michigan State Hosp. Fin. Auth. (St. John's Hospital) 6%, 5/15/2008 962,500 317
- --------------------------------------------------------------------------------------------------------------------------------
Housing--1.7%
500M Michigan State Hsg. Dev. Auth. Single-Family Mtge. Rev. 7.3%, 12/1/2016 503,124 166
- --------------------------------------------------------------------------------------------------------------------------------
Transportation--6.5%
Wayne Charter County, Michigan Airport Revenue (Detroit Metro. Airport):
750M 5 7/8%, 12/1/2008 699,375 230
1,190M 6 3/4%, 12/1/2019 1,276,275 421
- --------------------------------------------------------------------------------------------------------------------------------
1,975,650 651
- --------------------------------------------------------------------------------------------------------------------------------
Utilities--24.2%
290M Detroit, Michigan Sewer Disposal Revenue 6 7/8%, 7/1/2006 305,588 100
Detroit, Michigan Water Supply System:
2,620M 6 1/4%, 7/1/2012 2,525,025 831
400M 6 3/8%, 7/1/2022 419,000 138
500M Kent County, Michigan Refuse Disposal System 8.4%, 11/1/2010 536,250 177
Michigan State Strategic Fund (Detroit Edison Co.):
1,750M 6.95%, 5/1/2011 1,820,000 599
500M 7%, 5/1/2021 515,625 170
500M Monroe Cnty., Michigan Econ. Dev. Corp. (Detroit Edison) 6.95%, 9/1/2022 511,875 169
750M Wyandotte, Michigan Electric Revenue 6 1/4%, 10/1/2017 718,125 237
- --------------------------------------------------------------------------------------------------------------------------------
7,351,488 2,421

43
<PAGE>

- --------------------------------------------------------------------------------------------------------------------------------
Other Revenue--16.6%
1,000M Grand Rapids, Michigan Downtown Dev. Auth. Zero Cpn. 6/1/2009 388,750 128
Michigan Municipal Bond Authority Revenue:
1,500M 6.55%, 11/1/2008 1,509,375 497
1,000M 5 3/4%, 5/1/2014 900,000 296
1,000M 6 1/8%, 5/1/2014 943,750 311
1,500M Michigan State Building Authority 5.3%, 10/1/2012 1,286,250 424
- --------------------------------------------------------------------------------------------------------------------------------
5,028,125 1,656
- --------------------------------------------------------------------------------------------------------------------------------
Total Value of Municipal Bonds (cost $30,063,881) 99.1% 30,072,550 9,905
Other Assets, Less Liabilities .9 289,825 95
- --------------------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $30,362,375 $10,000
================================================================================================================================

See notes to financial statements
</TABLE>

<TABLE>
<CAPTION>
Portfolio of Investments
First Investors Multi-State Insured Tax Free Fund--MINNESOTA SERIES
December 31, 1994

44
<PAGE>

$ 60M Minnesota State Higher Educ. Facs. (College of St. Thomas) 7.3%, 11/1/2012 $ 64,500 $ 87
- --------------------------------------------------------------------------------------------------------------------------------
General Obligation--39.8%
75M Annandale, Minn. Independent School District #876, 6.9%, 2/1/2007 78,938 107
60M Anoka County, Minn. Capital Improvements 7.2%, 2/1/2009 62,850 85
75M Baxter, Minn. 6.9%, 2/1/2007 79,313 108
325M Becker, Minn. Wastewater Treatment 5.8%, 2/1/2010 303,469 412
180M Blaine, Minn. Series "A" Fire Impt. 6.8%, 2/1/2007 185,400 252
150M Cass Lake, Minnesota Independent School District #115, 6 5/8%, 2/1/2015 153,562 208
125M Mahnomen, Minn. Independent School District #432, 6 1/2%, 2/1/2011 125,625 171
80M Mahtomedi, Minn. 7.1%, 2/1/2006 84,400 114
70M Met. Council, Minn. Minneapolis-St. Paul Met. Area 7.3%, 12/1/2010 75,337 102
60M Minneapolis, Minn. Hennepin Ave. Series "C" 6.7%, 3/1/2012 63,150 86
275M Minnesota State 6 1/4%, 8/1/2011 282,562 383
350M North St. Paul Maplewood, Minn. Indpt. Sch. Dist. #622, 7.1%, 2/1/2019 361,375 490
200M Osseo Minn. Independent School District #279, 5 5/8%, 2/1/2012 181,250 246
75M Ramsey County, Minn. 7%, 2/1/2008 79,219 107
300M Redwood Falls, Minn. Indpt. Sch. Dist. 5.1%, 4/1/2009 261,750 355
145M Rockford, Minn. Independent School District No. #883, 7.2%, 12/15/2014 154,969 210
South Washington County, Minnesota Independent School District #833:
70M 6 7/8%, 6/1/2009 74,112 100
400M 4 7/8%, 6/1/2011 330,000 447
- --------------------------------------------------------------------------------------------------------------------------------
2,937,281 3,983
- --------------------------------------------------------------------------------------------------------------------------------
Hospital--34.7%
440M Bloomington, Minn. Health Care Facs. (Masonic Home Care Ctr.)
7/8%, 7/1/2022 401,500 545
300M Brainerd, Minn. Health Care Facilities (St. Joseph's) 5 7/8%, 2/15/2013 275,250 373
240M Duluth, Minn. Economic Dev. Auth. (Duluth Clinic) 6.2%, 11/1/2012 230,100 312

45
<PAGE>

Minneapolis & St. Paul, Minn. Hsg. & Redev. Auth. (Health One):
180M 7.4%, 8/15/2011 190,350 258
750M 4 3/4%, 11/15/2018 567,187 769
250M Minneapolis, Minn. Hospital Revenue (Fairview Hospital) 6 1/2%, 1/1/2011 247,500 336
60M Robbinsdale, Minn. Hospital Revenue (North Memorial Med. Ctr.)
7 3/8%, 1/1/2019 65,025 88
170M St. Cloud, Minn. Facs. Rev. (St. Cloud Hospital) 7%, 7/1/2020 184,238 250
St. Louis Park, Minn. Hosp. Rev. Facs. (Methodist Hospital):
170M 7 1/4%, 7/1/2015 181,475 246
200M 7 1/4%, 7/1/2018 218,250 296
- --------------------------------------------------------------------------------------------------------------------------------
2,560,875 3,473
- --------------------------------------------------------------------------------------------------------------------------------
Housing--10.9%
30M Dakota County, Minn. Housing & Redev. 8.1%, 9/1/2012 31,088 42
120M Eagen, Minn. Multi-Family Housing (Forest Ridge Apts.) 7 1/2%, 3/1/2027 120,600 164
Minnesota State Housing Finance Authority:
100M 6.9%, 7/1/2009 101,875 138
85M 7.7%, 7/1/2014 89,569 122
250M St. Paul, Minn. Housing & Development 5.4%, 9/1/2008 221,562 300
65M St. Paul, Minn. Hsg. & Redev. Auth. 7 1/2%, 3/1/2026 (Defaulted)(Note 1A) 65,000 88
200M Washington County, Minn. Hsg. & Redev. Auth. 5%, 2/1/2007 176,500 239
- --------------------------------------------------------------------------------------------------------------------------------
806,194 1,093
- --------------------------------------------------------------------------------------------------------------------------------
Utilities--10.7%
Northern Municipal Power Agency, Minn. Electric System Revenue:
200M 7 1/4%, 1/1/2016 209,750 284
120M 7.4%, 1/1/2018 130,200 177
Southern Minn. Municipal Power Agency, Power Supply System Revenue:
290M 5 3/4%, 1/1/2018 257,012 349
210M 5 3/4%, 1/1/2018 188,213 255

46
<PAGE>

- --------------------------------------------------------------------------------------------------------------------------------
785,175 1,065
- --------------------------------------------------------------------------------------------------------------------------------
Total Value of Municipal Bonds (cost $7,389,283) 97.0% 7,154,025 9,701
Other Assets, Less Liabilities 3.0 220,691 299
- --------------------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $7,374,716 $10,000
================================================================================================================================

See notes to financial statements
</TABLE>

<TABLE>
<CAPTION>
Portfolio of Investments
First Investors Multi-State Insured Tax Free Fund--Missouri SERIES
December 31, 1994

47
<PAGE>

- --------------------------------------------------------------------------------------------------------------------------------
General Obligation--11.2%
50M Lincoln County, Mo. Reorg. School District #3, 6.1%, 3/1/2014 46,813 290
50M Springfield, Mo. School District 7%, 3/1/2008 52,937 329
80M St. Charles, Mo. School District 6 1/2%, 2/1/2011 79,700 495
- --------------------------------------------------------------------------------------------------------------------------------
179,450 1,114
- --------------------------------------------------------------------------------------------------------------------------------
Hospital--33.9%
80M Jackson County, Mo. Indl. Dev. Auth. (Carondelet Health) 5 3/4%, 7/1/2014 72,000 447
Missouri State Health & Educational Facilities Authority:
140M BJC Health System 6 3/4%, 5/15/2011 142,450 884
35M Christian Health 6 7/8%, 2/15/2021 37,581 233
75M Freeman Hospital 5 3/8%, 2/15/2014 64,125 398
90M Health Midwest 6.1%, 6/1/2011 85,725 532
125M Sisters of Sorrowful Mother Healthcare 6 1/4%, 6/1/2007 124,531 773
20M St. Louis Childrens Hospital 6 1/4%, 5/15/2012 20,351 127
- --------------------------------------------------------------------------------------------------------------------------------
546,763 3,394
- --------------------------------------------------------------------------------------------------------------------------------
Transportation--4.7%
75M Kansas City, Mo. Airport Revenue 6 7/8%, 9/1/2014 76,125 472
- --------------------------------------------------------------------------------------------------------------------------------
Utilities--8.8%
150M St. Louis, Mo. Water and Sewer Revenue 6%, 7/1/2014 141,375 877
- --------------------------------------------------------------------------------------------------------------------------------
Other Revenue--29.7%
50M Clay County, Mo. Public Bldg. Auth. Leasehold Rev. 7%, 5/15/2014 51,313 318
70M Green County, Mo. Special Obligation 6.1%, 3/1/2015 65,275 405
75M Jackson County, Mo. Pub. Facs. Auth. 6 1/8%, 12/1/2015 71,156 442
75M Missouri State Econ. Dev. Export & Infrastructure Brd. Lease Rev.
5.7%, 8/1/2007 70,781 439

48
<PAGE>

90M Puerto Rico Municipal Finance Agency 6%, 7/1/2014 84,712 526
St. Louis, Mo. Municipal Financing Corp. Leasehold Revenue:
65M 6 1/4%, 2/15/2012 62,888 390
80M 5 3/4%, 8/1/2013 72,600 451
- --------------------------------------------------------------------------------------------------------------------------------
478,725 2,971
- --------------------------------------------------------------------------------------------------------------------------------
Total Value of Municipal Bonds (cost $1,616,691) 97.3% 1,567,138 9,726
Other Assets, Less Liabilities 2.7 44,020 274
- --------------------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $1,611,158 $10,000
================================================================================================================================

See notes to financial statements
</TABLE>

<TABLE>
<CAPTION>
Portfolio of Investments
First Investors Multi-State Insured Tax Free Fund--OHIO SERIES
December 31, 1994

49
<PAGE>

270M University of Toledo, Ohio General Receipts 7 1/8%, 6/1/2020 292,950 161
- --------------------------------------------------------------------------------------------------------------------------------
1,172,325 645
- --------------------------------------------------------------------------------------------------------------------------------
General Obligation--48.9%
215M Bellefontaine, Ohio City School District 7 1/8%, 12/1/2011 235,694 130
250M Cardington & Lincoln, Ohio Local School District 6.6%, 12/1/2014 248,750 137
Cleveland, Ohio:
500M 5 3/8%, 9/1/2011 443,125 244
500M 6 3/8%, 7/1/2012 488,125 269
250M 6 5/8%, 11/15/2014 250,625 138
250M Cleveland, Ohio City School District 5 7/8%, 12/1/2011 232,812 128
250M East Guernsey, Ohio Local School District 6%, 12/1/2009 239,687 132
700M Garfield Heights, Ohio 6.3%, 12/1/2014 673,750 371
200M Guernsey County, Ohio 6.2%, 12/1/2011 191,250 105
500M Lakeview, Ohio Local School District 6.9%, 12/1/2014 510,625 281
500M Lakewood, Ohio City School District 6.95%, 12/1/2015 512,500 282
215M Logan Hocking, Ohio Local School District Series "A" 7.1%, 12/1/2012 233,275 128
170M Miamisburg, Ohio 7 1/4%, 12/1/2017 186,363 103
270M Muskingum County, Ohio 7.2%, 12/1/2010 284,175 156
250M North Canton, Ohio City School District 5.9%, 12/1/2014 229,688 126
500M North Royalton, Ohio City School District 6%, 12/1/2014 465,000 256
250M Portage County, Ohio 6.2%, 12/1/2014 237,813 131
285M Shaker Heights, Ohio City School District 7.1%, 12/15/2010 301,388 166
500M South Western City School Dist., Ohio (Franklin & Pickway Cnty.)
5%, 12/1/2013 412,500 227
250M Springfield, Ohio City School District 6.4%, 12/1/2012 246,250 136
250M Springfield, Ohio Local School District 7 1/8%, 12/1/2012 261,250 144
Summit County, Ohio:
250M 6.9%, 8/1/2012 257,500 142

50
<PAGE>

550M 6.4%, 12/1/2014 532,812 293
Toledo, Ohio:
500M 5 3/4%, 12/1/2009 465,000 256
250M 6 1/2%, 12/1/2011 249,062 137
250M Valley View, Ohio 7%, 12/1/2011 259,375 143
250M West Geauga, Ohio Local School District 5.95%, 11/1/2012 233,437 128
- --------------------------------------------------------------------------------------------------------------------------------
8,881,831 4,889
- --------------------------------------------------------------------------------------------------------------------------------
Hospital--20.8%
Akron Bath Copley, Ohio State Twp. Hosp. Dist. Revenue,
Childrens Hospital Medical Center:
270M 5%, 11/15/2015 221,062 122
300M 7.45%, 11/15/2020 331,500 182
Cuyahoga County, Ohio Hospital Revenue:
450M Fairview General Hospital 7 3/8%, 8/1/2019 490,500 270
250M Mt. Sinai Medical Center 6 5/8%, 11/15/2021 247,812 136
Franklin County, Ohio Hospital Revenue:
255M Holy Cross Health System 7 5/8%, 6/1/2009 265,519 146
250M Riverside United Hospital 7 1/4%, 5/15/2020 259,063 143
325M Lucas County, Ohio Hosp. Imp. Rev. (St. Vincent Med. Ctr.) 6 3/4%, 8/15/2020 339,625 187
750M Maumee, Ohio Hosp. Facs. Rev. (St. Lukes Hosp.) 5.8%, 12/1/2014 684,375 377
Montgomery County, Ohio:
100M Dayton Osteopathic Hospital 7.4%, 12/1/2008 100,125 55
300M Sisters of Charity Health Care 6 1/4%, 5/15/2008 293,625 162
125M Parma, Ohio Hosp. Impt. (Parma Cmnty. Gen. Hosp. Assoc.) 7.2%, 11/15/2008 133,125 73
400M Trumbull County, Ohio Hospital Revenue 6.9%, 11/15/2012 411,500 226
- --------------------------------------------------------------------------------------------------------------------------------
3,777,831 2,079
- --------------------------------------------------------------------------------------------------------------------------------
Utilities--19.9%
600M Alliance, Ohio Sewer System Revenue 6%, 10/15/2010 563,250 310

51
<PAGE>

Cleveland, Ohio Waterworks Revenue:
800M 5 1/2%, 1/1/2009 740,000 407
340M 6 1/2%, 1/1/2021 357,850 197
250M Hamilton County, Ohio Electric System Mtge. Rev. 8%, 10/15/2022 275,625 152
165M Ohio State Air Quality Dev. Auth. Rev. (Ohio Power Co.) 7.4%, 8/1/2009 168,094 92
Ohio State Water Dev. Auth. Rev. Pure Water Series:
600M 6%, 12/1/2008 580,500 320
250M 7%, 12/1/2009 263,125 145
500M Orrville, Ohio Water System Revenue 6%, 12/1/2011 470,625 259
200M Toledo, Ohio Water Revenue 6%, 11/15/2007 195,000 107
- --------------------------------------------------------------------------------------------------------------------------------
3,614,069 1,989
- --------------------------------------------------------------------------------------------------------------------------------
Other Revenue--3.0%
270M Franklin County, Ohio Conv. Facs. Auth. Tax & Lease Rev. Ant.
7%, 12/1/2019 292,612 161
250M Ohio State Building Auth. (Juvenile Correction Proj.) 6.6%, 10/1/2014 250,313 138
- --------------------------------------------------------------------------------------------------------------------------------
542,925 299
- --------------------------------------------------------------------------------------------------------------------------------
Total Value of Municipal Bonds (cost $18,086,080) 99.0% 17,988,981 9,901
Other Assets, Less Liabilities 1.0 179,825 99
- --------------------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $18,168,806 $10,000
================================================================================================================================

See notes to financial statements
</TABLE>

<TABLE>
<CAPTION>
Portfolio of Investments
First Investors Multi-State Insured Tax Free Fund--Oregon SERIES
December 31, 1994

52
<PAGE>

- --------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL BONDS--94.4%
Certificate of Participation--4.2%
$100M Oregon State Dept. of General Services 6%, 9/1/2010 $ 94,875 $ 202
100M Washington County, Oregon Educational Service District 7%, 6/1/2016 102,000 217
- --------------------------------------------------------------------------------------------------------------------------------
196,875 419
- --------------------------------------------------------------------------------------------------------------------------------
Education--8.3%
200M Chemeketa, Oregon Commmunity College District 6.4%, 7/1/2009 201,000 428
200M Oregon State Hlth. & Hsg. Educl. & Cult. Facs. (Lewis & Clark College)
6%, 10/1/2013 188,500 402
- --------------------------------------------------------------------------------------------------------------------------------
389,500 830
- --------------------------------------------------------------------------------------------------------------------------------
General Obligation--52.5%
200M Clackamas County, Oregon School District #115, 5.8%, 6/1/2008 191,250 407
200M Josephine County, Oregon Sch. Dist. (Three Rivers) 5.65%, 12/1/2008 188,250 401
200M Lane County, Oregon Sch. Dist. #019, (Springfield) 6 1/4%, 10/15/2011 196,250 418
115M Lane County, Oregon School District #052, (Bethel) 7%, 12/1/2006 122,331 260
100M Marion & Linn Counties, Oregon Elem. School Dist. #077J,
(Stayton) 6.1%, 7/1/2009 97,625 208
200M Multnomah County, Oregon 5 1/4%, 10/1/2010 177,500 378
200M Oregon State 5.9%, 6/1/2014 200,250 426
200M Polk Marion & Benton Counties, Oregon Sch. Dist. #13, 5 1/2%, 12/1/2008 185,250 394

53
<PAGE>

200M Salem-Keizer Oregon School District #24, 5 3/4%, 6/1/2011 184,250 392
200M Umatilla County, Oregon Sch. Dist. #16, (Pendleton) 6%, 7/1/2014 189,500 404
170M Washington County, Oregon Sch. Dist. #003, (Hillsboro) 6%, 11/1/2008 166,175 354
200M Washington County, Oregon Sch. Dist. #48J, (Beaverton) 5.8%, 6/1/2013 182,500 389
200M Washington County, Oregon Sch. Dist. #88, (Sherwood) 6.1%, 6/1/2012 192,000 409
200M Yamhill County, Oregon School District #029, 6.1%, 6/1/2011 192,000 409
- --------------------------------------------------------------------------------------------------------------------------------
2,465,131 5,249
- --------------------------------------------------------------------------------------------------------------------------------
Hospital--4.3%
25M Clackamas County, Oregon Health Facs. Auth. (Adventist Health)
6.35%, 3/1/2009 25,219 53
200M Western Lane Hosp. Dist. Oregon (Sisters of St. Joseph) 5 3/4%, 8/1/2019 179,250 382
- ---------------------------------------------------------------------------------------------- --------------------------
204,469 435
- --------------------------------------------------------------------------------------------------------------------------------
Transportation--4.2%
200M Oregon State Department of Transportation Revenue 6 1/4%, 6/1/2009 197,250 420
- --------------------------------------------------------------------------------------------------------------------------------
Utilities--16.9%
100M Emerald, Oregon Peoples Utility District 6.4%, 11/1/2002 104,125 222
200M Klamath Falls, Oregon Water Revenue 6.1%, 6/1/2014 188,500 401
200M Portland, Oregon Sewer System Revenue 6.2%, 6/1/2012 193,500 412
115M Puerto Rico Electric Power Authority Power Revenue 9%, 7/1/2005 121,096 258
200M South Fork Water Board, Oregon Water Revenue 6%, 2/1/2014 186,250 397
- --------------------------------------------------------------------------------------------------------------------------------
793,471 1,690
- --------------------------------------------------------------------------------------------------------------------------------
Other Revenue--4.0%
200M Puerto Rico Municipal Finance Agency 6%, 7/1/2014 188,250 401

54
<PAGE>

- --------------------------------------------------------------------------------------------------------------------------------
Total Value of Municipal Bonds (cost $4,584,467) 94.4% 4,434,946 9,444
Other Assets, Less Liabilities 5.6 261,272 556
- --------------------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $4,696,218 $10,000
================================================================================================================================

See notes to financial statements
</TABLE>

<TABLE>
<CAPTION>
Statement of Assets and Liabilities
December 31, 1994
- -----------------------------------------------------------------------------------------------------------------------------
FIRST INVESTORS MULTI-STATE INSURED TAX FREE FUND
- -----------------------------------------------------------------------------------------------------------------------------
ARIZONA CALIFORNIA COLORADO MICHIGAN
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Assets
Investments in securities:
At identified cost $8,662,388 $15,148,422 $3,119,108 $30,063,881
=========== =========== =========== ===========
At value (Note 1A) $8,592,563 $15,109,369 $3,021,562 $30,072,550

Cash 254,074 1,893 51,473 58,861
Receivables:
Interest 214,723 283,758 31,390 367,240
Shares sold 955 7,129 12,840 13,748
Investment securities sold -- -- -- --
Other assets 10 628 -- 607
----------- ----------- ----------- -----------
Total Assets 9,062,325 15,402,777 3,117,265 30,513,006
----------- ----------- ----------- -----------
Liabilities
Payables:
Investment securities purchased 230,357 -- -- --
Dividends payable January 20, 1995 21,685 46,913 4,667 58,025
Shares redeemed 3,321 2,230 2,493 66,926
Accrued advisory fees 2,186 6,369 -- 12,589
Accrued expenses 1,457 11,839 514 13,091
----------- ----------- ----------- -----------
Total Liabilities 259,006 67,351 7,674 150,631
----------- ----------- ----------- -----------
Net Assets $8,803,319 $15,335,426 $3,109,591 $30,362,375
=========== =========== =========== ===========
Net Assets Consist of:
Capital paid in $9,093,634 $15,366,908 $3,283,652 $30,560,069
Undistributed net investment income 8,128 16,120 435 11,601

55
<PAGE>

Accumulated net realized loss on investments (228,618) (8,549) (76,950) (217,964)
Net unrealized appreciation (depreciation)
in value of investments. (69,825) (39,053) (97,546) 8,669
----------- ----------- ----------- -----------
Total $8,803,319 $15,335,426 $3,109,591 $30,362,375
=========== =========== =========== ===========
Shares Outstanding (Note 2) 751,894 1,424,001 276,667 2,647,655
=========== =========== =========== ===========
Net Asset Value and Redemption
Price Per Share--Class A (Note 2) $11.71 $10.77 $11.24 $11.47
=========== =========== =========== ===========
Maximum Offering Price Per Share--Class A
(Net Asset Value/.9375)* $12.49 $11.49 $11.99 $12.23
=========== =========== =========== ===========
*On purchases of $25,000 or more, the sales charge is reduced.

See notes to financial statements

TABLE CONTINUED BELOW

Cash 36,296 18,467 14,626 193,694
Receivables:
Interest 168,614 28,950 233,061 53,722
Shares sold 8,645 121 15,207 23,063
Investment securities sold 25,000 -- -- --
Other assets 528 -- 572 --
----------- ----------- ----------- -----------
Total Assets 7,393,108 1,614,676 18,252,447 4,705,425
----------- ----------- ----------- -----------
Liabilities
Payables:
Investment securities purchased -- -- -- --
Dividends payable January 20, 1995 10,093 3,139 26,693 4,818
Shares redeemed 400 126 38,099 3,623
Accrued advisory fees 1,534 -- 6,077 --
Accrued expenses 6,365 253 12,772 766
----------- ----------- ----------- -----------
Total Liabilities 18,392 3,518 83,641 9,207
----------- ----------- ----------- -----------

Net Assets $7,374,716 $1,611,158 $18,168,806 $4,696,218

56
<PAGE>

=========== =========== =========== ===========
Net Assets Consist of:
Capital paid in $7,693,262 $1,736,459 $18,426,064 $5,059,490
Undistributed net investment income 1,947 1,037 6,641 951
Accumulated net realized loss on investments (85,235) (76,785) (166,800) (214,702)
Net unrealized appreciation (depreciation)
in value of investments. (235,258) (49,553) (97,099) (149,521)
----------- ----------- ----------- -----------
Total $7,374,716 $1,611,158 $18,168,806 $4,696,218
=========== =========== =========== ===========
Shares Outstanding (Note 2) 703,801 144,862 1,607,173 432,073
=========== =========== =========== ===========
Net Asset Value and Redemption
Price Per Share--Class A (Note 2) $10.48 $11.12 $11.30 $10.87
=========== =========== =========== ===========
Maximum Offering Price Per Share--Class A
(Net Asset Value/.9375)* $11.18 $11.86 $12.05 $11.59
=========== =========== =========== ===========
*On purchases of $25,000 or more, the sales charge is reduced.

</TABLE>

See notes to financial statements

<TABLE>
<CAPTION>
Statement of Operations
Year Ended December 31, 1994
- -----------------------------------------------------------------------------------------------------------------------------
FIRST INVESTORS MULTI-STATE INSURED TAX FREE FUND
- -----------------------------------------------------------------------------------------------------------------------------
ARIZONA CALIFORNIA COLORADO MICHIGAN
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Investment Income
Interest income $ 507,134 $ 1,017,008 $ 166,369 $ 1,828,997
----------- ----------- ----------- -----------
Expenses:
Advisory fees (Note 4) 65,930 122,210 22,258 226,802
Distribution plan expenses (Note 5) 17,580 32,589 5,936 60,481
Shareholder servicing costs (Note 4) 9,864 10,176 6,357 24,189
Professional fees 6,175 15,493 4,412 14,117
Reports to shareholders 3,576 6,572 1,762 13,293
Bond insurance premiums (Note 1A) 678 3,616 96 8,699
Other expenses 3,835 7,564 1,642 10,306
----------- ----------- ----------- -----------
Total expenses 107,638 198,220 42,463 357,887
Less: Expenses waived or assumed (Note 4) (81,202) (40,737) (36,523) (75,601)
----------- ----------- ----------- -----------
Expenses - net 26,436 157,483 5,940 282,286
----------- ----------- ----------- -----------
Net investment income 480,698 859,525 160,429 1,546,711

57
<PAGE>

----------- ----------- ----------- -----------

Realized and Unrealized Gain (Loss)
on Investments (Note 3):

Net realized loss on investments (227,728) (8,549) (76,950) (217,964)
Net unrealized depreciation of investments (792,840) (1,904,770) (260,352) (3,292,803)
----------- ----------- ----------- -----------
Net loss on investments (1,020,568) (1,913,319) (337,302) (3,510,767)
----------- ----------- ----------- -----------
Net Decrease in Net Assets Resulting
from Operations $ (539,870) $(1,053,794) $(176,873) $(1,964,056)
=========== =========== =========== ===========

See notes to financial statements

TABLE CONTINUED BELOW

<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
FIRST INVESTORS MULTI-STATE INSURED TAX FREE FUND
- -----------------------------------------------------------------------------------------------------------------------------
MINNESOTA MISSOURI OHIO OREGON
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Investment Income
Interest income $ 471,282 $ 89,699 $ 1,164,943 $ 235,366
----------- ----------- ----------- -----------
Expenses:
Advisory fees (Note 4) 58,450 11,913 144,811 31,743
Distribution plan expenses (Note 5) 15,587 3,177 38,616 8,466
Shareholder servicing costs (Note 4) 7,367 2,797 18,055 7,517
Professional fees 8,221 4,890 10,359 4,807
Reports to shareholders 4,028 849 9,911 2,308
Bond insurance premiums (Note 1A) 2,715 183 2,488 2,151
Other expenses 4,025 1,183 7,372 1,924
----------- ----------- ----------- -----------
Total expenses 100,393 24,992 231,612 58,916
Less: Expenses waived or assumed (Note 4) (49,734) (21,815) (67,578) (50,463)
----------- ----------- ----------- -----------
Expenses - net 50,659 3,177 164,034 8,453
----------- ----------- ----------- -----------
Net investment income 420,623 86,522 1,000,909 226,913
----------- ----------- ----------- -----------

Realized and Unrealized Gain (Loss)
on Investments (Note 3):

Net realized loss on investments (85,235) (76,785) (147,400) (212,062)
Net unrealized depreciation of investments (827,572) (115,009) (2,064,948) (289,223)
----------- ----------- ----------- -----------
Net loss on investments (912,807) (191,794) (2,212,348) (501,285)
----------- ----------- ----------- -----------
Net Decrease in Net Assets Resulting
from Operations $(492,184) $(105,272) $(1,211,439) $(274,372)

58
<PAGE>

=========== =========== =========== ===========

See notes to financial statements

</TABLE>

<TABLE>
<CAPTION>
Statement of Changes in Net Assets

- ------------------------------------------------------------------------------------------------------------------------------
FIRST INVESTORS MULTI-STATE INSURED TAX FREE FUND
- ------------------------------------------------------------------------------------------------------------------------------
ARIZONA CALIFORNIA
---------------------------- ------------------------------
Year Ended December 31 1994 1993 1994 1993
---------- ---------- ------------ ------------
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets from
Operations
Net investment income $ 480,698 $ 366,266 $ 859,525 $ 870,055
Net realized gain (loss) on investments (227,728) 28,311 (8,549) 271,658
Net unrealized appreciation (depreciation)
of investments (792,840) 500,688 (1,904,770) 856,787
---------- ---------- ------------ ------------
Net increase (decrease) in net assets resulting
from operations (539,870) 895,265 (1,053,794) 1,998,500
---------- ---------- ------------ ------------
Distributions to Shareholders:
From net investment income (487,439) (357,173) (891,640) (833,251)
From net realized gain from security transactions -- (28,304) -- (271,658)
In excess of realized gain from security
transactions -- (890) -- --
---------- ---------- ------------ ------------
Total distributions (487,439) (386,367) (891,640) (1,104,909)
---------- ---------- ------------ ------------
Share Transactions--Class A (a)
Issued 3,427,567 4,152,277 2,286,986 4,196,196
Issued on reinvestments 268,008 221,584 503,739 651,820
Redeemed (2,112,368) (1,453,506) (3,134,493) (3,311,956)
---------- ---------- ------------ ------------
Net increase (decrease) from share transactions 1,583,207 2,920,355 (343,768) 1,536,060
---------- ---------- ------------ ------------
Total increase (decrease) 555,898 3,429,253 (2,289,202) 2,429,651
Net Assets
Beginning of year 8,247,421 4,818,168 17,624,628 15,194,977
---------- ---------- ------------ ------------
End of year+ 8,803,319 8,247,421 15,335,426 17,624,628
========== ========== ============ ============
+Includes undistributed net investment income of $ 8,128 $ 14,869 $ 16,120 $ 48,235
========== ========== ============ ============
(a) Shares issued and redeemed--Class A (Note 2)

59
<PAGE>

Issued 276,121 324,124 199,720 349,017
Issued on reinvestments 22,128 17,268 44,854 54,099
Redeemed (175,117) (111,354) (274,794) (277,498)
---------- ---------- ------------ ------------
Net increase (decrease) in shares 123,132 230,038 (30,220) 125,618
========== ========== ============ ============

TABLE CONTINUED BELOW

<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
FIRST INVESTORS MULTI-STATE INSURED TAX FREE FUND
- ------------------------------------------------------------------------------------------------------------------------------
COLORADO MICHIGAN
---------------------------- ------------------------------
Year Ended December 31 1994 1993 1994 1993
---------- ---------- ------------ ------------
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets from
Operations
Net investment income $ 160,429 $ 97,449 $ 1,546,711 $ 1,310,547
Net realized gain (loss) on investments (76,950) 3,550 (217,964) 183,948
Net unrealized appreciation (depreciation)
of investments (260,352) 135,959 (3,292,803) 1,856,140
---------- ---------- ------------ ------------
Net increase (decrease) in net assets resulting
from operations (176,873) 236,958 (1,964,056) 3,350,635
---------- ---------- ------------ ------------
Distributions to Shareholders:
From net investment income (162,310) (96,861) (1,539,297) (1,333,650)
From net realized gain from security transactions -- (1,304) -- (182,127)
In excess of realized gain from security
transactions -- -- -- --
---------- ---------- ------------ ------------
Total distributions (162,310) (98,165) (1,539,297) (1,515,777)
---------- ---------- ------------ ------------
Share Transactions--Class A (a)
Issued 1,041,474 1,610,556 6,577,080 8,651,438
Issued on reinvestments 120,485 79,008 966,749 1,005,409
Redeemed (600,150) (62,941) (3,959,063) (2,181,470)
---------- ---------- ------------ ------------
Net increase (decrease) from share transactions 561,809 1,626,623 3,584,766 7,475,377
---------- ---------- ------------ ------------
Total increase (decrease) 222,626 1,765,416 81,413 9,310,235
Net Assets
Beginning of year 2,886,965 1,121,549 30,280,962 20,970,727
---------- ---------- ------------ ------------
End of year+ $3,109,591 $2,886,965 $30,362,375 $30,280,962
========== ========== ============ ============
+Includes undistributed net investment income of $ 435 $ 2,316 $ 11,601 $ 4,187
========== ========== ============ ============
(a) Shares issued and redeemed--Class A (Note 2)
Issued 88,330 131,303 542,805 685,243
Issued on reinvestments 10,357 6,434 81,294 79,365

60
<PAGE>

Redeemed (51,065) (5,112) (326,423) (172,246)
---------- ---------- ------------ ------------
Net increase (decrease) in shares 47,622 132,625 297,676 592,362
========== ========== ============ ============

TABLE CONTINUED BELOW

- ------------------------------------------------------------------------------------------------------------------------------
FIRST INVESTORS MULTI-STATE INSURED TAX FREE FUND
- ------------------------------------------------------------------------------------------------------------------------------
MINNESOTA MISSOURI
---------------------------- ------------------------------
Year Ended December 31 1994 1993 1994 1993
---------- ---------- ------------ ------------
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets from
Operations
Net investment income $ 420,623 $ 390,894 $ 86,522 $ 47,836
Net realized gain (loss) on investments (85,235) 92,958 (76,785) 2,842
Net unrealized appreciation (depreciation)
of investments (827,572) 282,896 (115,009) 55,810
---------- ---------- ------------ ------------
Net increase (decrease) in net assets resulting
from operations (492,184) 766,748 (105,272) 106,488
---------- ---------- ------------ ------------
Distributions to Shareholders:
From net investment income (426,080) (397,017) (85,819) (48,214)
From net realized gain from security transactions -- (92,847) -- (2,763)
In excess of realized gain from security
transactions -- -- -- --
---------- ---------- ------------ ------------
Total distributions (426,080) (489,864) (85,819) (50,977)
---------- ---------- ------------ ------------
Share Transactions--Class A (a)
Issued 782,210 1,928,446 452,897 1,095,731
Issued on reinvestments 312,864 378,101 61,785 38,773
Redeemed (920,314) (447,738) (252,327) (125,174)
---------- ---------- ------------ ------------
Net increase (decrease) from share transactions 174,760 1,858,809 262,355 1,009,330
---------- ---------- ------------ ------------
Total increase (decrease) (743,504) 2,135,693 71,264 1,064,841

Net Assets
Beginning of year 8,118,220 5,982,527 1,539,894 475,053
---------- ---------- ------------ ------------
End of year+ $7,374,716 $8,118,220 $1,611,158 $1,539,894
========== ========== ============ ============
+Includes undistributed net investment income of $ 1,947 $ 7,404 $ 1,037 $ 334
========== ========== ============ ============
(a) Shares issued and redeemed--Class A (Note 2)
Issued 70,506 165,941 38,682 89,074
Issued on reinvestments 28,719 32,336 5,356 3,161

61
<PAGE>

Redeemed (85,260) (38,094) (22,393) (10,136)
---------- ---------- ------------ ------------
Net increase (decrease) in shares 13,965 160,183 21,645 82,099
========== ========== ============ ============

TABLE CONTINUED BELOW

<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
FIRST INVESTORS MULTI-STATE INSURED TAX FREE FUND
- ------------------------------------------------------------------------------------------------------------------------------
OHIO OREGON
---------------------------- ------------------------------
Year Ended December 31 1994 1993 1994 1993
---------- ---------- ------------ ------------
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets from
Operations
Net investment income $ 1,000,909 $ 911,444 $ 226,913 $ 105,632
Net realized gain (loss) on investments (147,400) 150,398 (212,062) (2,345)
Net unrealized appreciation (depreciation)
of investments (2,064,948) 1,050,507 (289,223) 128,793
---------- ---------- ------------ ------------
Net increase (decrease) in net assets resulting
from operations (1,211,439) 2,112,349 (274,372) 232,080
---------- ---------- ------------ ------------
Distributions to Shareholders:
From net investment income (1,012,934) (906,030) (228,557) (104,643)
From net realized gain from security transactions -- (144,826) -- --
In excess of realized gain from security
transactions -- (19,400) -- --
---------- ---------- ------------ ------------
Total distributions (1,012,934) (1,070,256) (228,557) (104,643)
---------- ---------- ------------ ------------
Share Transactions--Class A (a)
Issued 2,394,093 6,848,149 1,814,006 2,741,021
Issued on reinvestments 701,544 764,575 180,991 86,108
Redeemed (3,068,271) (2,158,269) (542,460) (138,566)
---------- ---------- ------------ ------------
Net increase (decrease) from share transactions 27,366 5,454,455 1,452,537 2,688,563
---------- ---------- ------------ ------------
Total increase (decrease) (2,197,007) 6,496,548 949,608 2,816,000

Net Assets
Beginning of year 20,365,813 13,869,265 3,746,610 930,610
---------- ---------- ------------ ------------
End of year+ $18,168,806 $20,365,813 $4,696,218 $3,746,610
========== ========== ============ ============
+Includes undistributed net investment income of $ 6,641 $ 18,666 $ 951 $ 2,595
========== ========== ============ ============
(a) Shares issued and redeemed--Class A (Note 2)
Issued 200,153 551,418 159,521 227,725
Issued on reinvestments 59,779 61,218 16,104 7,157
Redeemed (261,699) (172,305) (48,313) (11,617)
---------- ---------- ------------ ------------
Net increase (decrease) in shares (1,767) 440,331 127,312 223,265

<PAGE>

========== ========== ============ ============

See notes to financial statements

</TABLE>

Notes to Financial Statements

First Investors Multi-State Insured Tax Free Fund
Arizona, California, Colorado, Michigan, Minnesota,
Missouri, Ohio and Oregon Series

1. Significant Accounting Policies-- First Investors Multi-State Insured Tax
Free Fund ("Multi-State Insured") is registered under the Investment Company
Act of 1940 (the "1940 Act") as a diversified, open- end management
investment company. Multi-State Insured consists of seventeen separate
investment series. This report relates to the eight series of Multi-State
Insured listed above (collectively, "Series"). Multi-State Insured operates
as a series fund, issuing shares of beneficial interest in each Series and
accounts separately for the assets, liabilities and operations of each
Series.

A. Security Valuation--The municipal securities in which the Series invest
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 Trustees. 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 Series as of the date the securities are
purchased.

The municipal bonds held by the Series 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 Series 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 Series may invest up to
20% of their assets in portfolio securities not covered by the insurance
feature.

B. Federal Income Taxes--It is the policy of each Series to continue to
qualify as a regulated investment company, which can distribute tax exempt
dividends, by complying with the provisions available to certain investment
companies, as defined in the Internal Revenue Code. The Series make
distributions of income and net realized capital gains sufficient to relieve
them from all, or substantially all, federal income taxes. At December 31,
1994, the Series had the following capital loss carryovers, all expiring in
the year 2002:

MULTI-STATE INSURED

63
<PAGE>

- ------------------------
<S> <C>
ARIZONA Series $127,581
CALIFORNIA Series 8,549
COLORADO Series 74,872
MICHIGAN Series 173,162
MINNESOTA Series 79,931
MISSOURI Series 65,036
OHIO Series 102,285
OREGON Series 200,817
</TABLE>

C. Distributions to Shareholders-- Dividends from net investment income are
declared daily and are paid monthly. Dividends from net realized capital
gain are normally declared and paid annually. To the extent that net
realized capital gain can be offset by capital loss carryovers, it is the
policy of the Series not to distribute such gain.

Income dividends and capital gain distributions are determined in accordance
with tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
capital loss carryforwards, deferral of wash sales and post October losses.

D. Expense Allocation--Direct expenses attributable to a Series are charged
to and paid from the assets of that Series. Indirect or general expenses are
allocated among and charged to the assets of each Series on a fair and
equitable basis, which may be based on the relative assets of each Series or
the nature of the services performed and relative applicability to each
Series.

E. 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.

2. Fund Shares--The Declaration of Trust of Multi-State Insured permits the
Fund to issue an unlimited number of shares of beneficial interest in each
Series. On September 22, 1994, the Board of Trustees established an
unlimited number of Class A and an unlimited number of Class B shares of
beneficial interest. As of December 31, 1994, only Class A shares have been
issued by the Series.

3. Security Transactions--For the year ended December 31, 1994, purchases
and sales of municipal securities were as follows:

<TABLE>
<CAPTION>
Cost Proceeds
of of
Purchases Sales
---------- ------------
<S> <C> <C>
MULTI-STATE INSURED
64
<PAGE>

- -------------------
ARIZONA Series $ 7,094,621 $ 5,275,515
CALIFORNIA Series 13,016,728 12,843,410
COLORADO Series 3,694,561 3,106,341
MICHIGAN Series 21,677,319 16,945,595
MINNESOTA Series 3,042,509 2,579,940
MISSOURI Series 1,758,520 1,458,756
OHIO Series 10,922,708 10,535,710
OREGON Series 6,462,781 5,190,269
</TABLE>

At December 31, 1994, aggregate cost and net unrealized appreciation
(depreciation) of securities for federal income tax purposes were as
follows:

<TABLE>
<CAPTION>
Net
Gross Gross Unrealized
Aggregate Unrealized Unrealized Appreciation
Cost Appreciation Depreciation (Depreciation)
---------------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
MULTI-STATE INSURED
- -------------------
ARIZONA Series $ 8,662,388 $121,855 $191,680 $ (69,825)
CALIFORNIA Series 15,148,422 310,954 350,007 (39,053)
COLORADO Series 3,119,108 5,374 102,920 (97,546)
MICHIGAN Series 30,063,881 762,098 753,429 8,669
MINNESOTA Series 7,389,283 152,699 387,957 (235,258)
MISSOURI Series 1,616,691 6,533 56,086 (49,553)
OHIO Series 18,086,080 416,388 513,487 (97,099)
OREGON Series 4,586,674 9,800 161,528 (151,728)
</TABLE>

4. Advisory Fee and Other Transactions With Affiliates (Also see Note
5)--Certain officers and trustees of the Series are officers and directors
of the Series' investment adviser, First Investors Management Company, Inc.
("FIMCO"), their underwriter, First Investors Corporation ("FIC"), and/or
their transfer agent, Administrative Data Management Corp. ("ADM"). Officers
and trustees of the Series received no remuneration from the Series for
serving in such capacities. Their remuneration (together with certain other
expenses of the Series) is paid by FIMCO or FIC.

The Investment Advisory Agreements provide as compensation to FIMCO an
annual fee, payable monthly, at the rate of .75% on the first $250 million
of the average daily net assets of each Series, 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, 1994, advisory fees amounted to
$684,117, of which $345,872 was waived; other expenses in the amount of
$51,246 were assumed by FIMCO.

For the year ended December 31, 1994, FIC, as underwriter, received $458,660
in commissions on sales of shares after allowing $310,963 to other dealers.
Shareholder servicing costs consisted of $86,322 in transfer agent fees and
out of pocket expenses accrued to ADM. Transfer agent fees and out of pocket
expenses attributable to the Arizona, Colorado, Missouri and Oregon Series,

65
<PAGE>

in the amount of $26,535, were waived by the transfer agent for the year
ended December 31, 1994.

5. Distribution Plan--Pursuant to a Distribution Plan adopted under Rule
12b-1 of the 1940 Act, each Series is authorized to pay a fee up to .30% of
their respective average annual net assets, on an annualized basis each
fiscal 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 that Series. Under the Plan, FIC, as underwriter,
received $182,432 for the year ended December 31, 1994 from the eight
Series.

6. Concentration of Credit Risk-- The Series invest in debt instruments of
municipal issuers whose ability to meet their obligations may be affected by
economic developments in a State, industry or region.

66
<PAGE>

Independent Auditor's Report

To the Shareholders and Trustees of
First Investors Multi-State Insured Tax Free Fund
Arizona, California, Colorado, Michigan, Minnesota,
Missouri, Ohio and Oregon Series

We have audited the accompanying statement of assets and liabilities,
including the portfolios of investments, of the eight series of First
Investors Multi-State Insured Tax Free Fund listed above as of December 31,
1994, 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 the periods indicated thereon.
These financial statements and financial highlights are the responsibility
of the Funds' 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 audits 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, 1994, 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
each of the eight series of First Investors Multi-State Insured Tax Free
Fund listed above as of December 31, 1994, and the results of their
operations, changes in their net assets and financial highlights for each of
the respective periods presented, in conformity with generally accepted
accounting principles.

Tait, Weller & Baker
Philadelphia, Pennsylvania
January 31, 1995

<PAGE>

PART C

OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) Financial Statements:

Financial Statements are set forth in Part B, Statement of Additional
Information.

(b) Exhibits:

(1)(11) Amended and Restated Declaration of Trust

(2)(2) By-laws

(3) Not Applicable

(4)(1,4,5,7)
Specimen Certificates

(5)(11) Investment Advisory Agreement between Registrant and First
Investors Management Company, Inc.

(6)(10) Underwriting Agreement between Registrant and First
Investors Corporation.

(7) Not Applicable

(8)a.(1) Custodian Agreement between Registrant and Irving Trust
Company

b.(5) Supplement to Custodian Agreement

(9)(1) Administration Agreement between Registrant, First Investors
Management Company, Inc., First Investors Corporation and
Administrative Data Management Corp.

(10)a.(9) Opinion of Counsel

b. Consent of Arizona tax counsel
c. Consent of California tax counsel
d. Consent of Colorado and Georgia tax counsel
e. Opinion and Consent of Connecticut tax counsel
f. Opinion and Consent of Florida tax counsel
g. Consent of Maryland tax counsel
h. Consent of Massachusetts tax counsel
i. Consent of Michigan tax counsel

C-1
<PAGE>

j. Consent of Minnesota tax counsel
k. Consent of Missouri tax counsel
l. Opinion and Consent of New Jersey tax counsel
m. Consent of North Carolina tax counsel
n. Consent of Ohio tax counsel
o. Consent of Oregon tax counsel
p. Consent of Virginia tax counsel

(11)a. Consent of independent accountants

b.(8) Powers of Attorney

(12) Not applicable

(13)(2,4,5,6)
Undertakings of the Co-Underwriters

(14) Not Applicable

(15)a.(11)Amended and Restated Class A Distribution Plan

b.(11)Class B Distribution Plan

(16) Performance Calculations

- ------------------
1 Incorporated by reference from Registrant's Registration Statement (File
No. 33-4077).
2 Incorporated by reference from Pre-Effective Amendment No. 2 to
Registrant's Registration Statement (File No. 4077).
3 Incorporated by reference from Post-Effective Amendment No. 7 to
Registrant's Registration Statement (File No. 33-4077) filed on February
28, 1990.
4 Incorporated by reference from Post-Effective Amendment No. 9 to
Registrant's Registration Statement (File No. 33-4077) filed on August 3,
1990.
5 Incorporated by reference from Post-Effective Amendment No. 11 to
Registrant's Registration Statement (File No. 33-4077) filed on April 9,
1991.
6 Incorporated by reference from Post-Effective Amendment No. 12 to
Registrant's Registration Statement (File No. 33-4077) filed on March 3,
1992.
7 Incorporated by reference from Post-Effective Amendment No. 13 to
Registrant's Registration Statement (File No. 33-4077) filed on October 22,
1992.
8 Incorporated by reference from Post-Effective Amendment No. 14 to
Registrant's Registration Statement (File No. 33-4077) filed on April 30,
1993.

9 Incorporated by reference from Registrant's Rule 24f-2 Notice for its
fiscal year ending December 31, 1994 filed on February 21, 1995.

C-2
<PAGE>

10 Incorporated by reference from Post-Effective Amendment No. 15 to
Registrant's Registration Statement (File No. 33-4077) filed on April 28,
1994.
11 Incorporated by reference from Post-Effective Amendment No. 16 to
Registrant's Registration Statement (File No. 33-4077) filed on October 18,
1994.

Item 25. Persons Controlled by or under common control with Registrant

There are no persons controlled by or under common control with the
Registrant.

Item 26. Number of Holders of Securities

Number of Record
Holders as of
Title of Class February 28, 1995
-------------- -----------------
Class A Class B
<S> <C> <C>
Arizona Series 430 1
California Series 486 2
Colorado Series 284 3
Connecticut Series 738 4
Florida Series 721 2
Georgia Series 145 2
Maryland Series 430 2
Massachusetts Series 936 4
Michigan Series 1,243 2
Minnesota Series 392 1
Missouri Series 122 1
North Carolina 233 7
Ohio Series 925 4
New Jersey Series 1,842 2
Oregon Series 404 1
Pennsylvania Series 1,208 1
Virginia Series 1,063 9
</TABLE>

Item 27. Indemnification

Article XI, Section 1 of Registrant's Declaration of Trust provides as
follows:

Section 1.

Provided they have exercised reasonable care and have acted under the
reasonable belief that their actions are in the best interest of the Trust, the
Trustees shall not be responsible for or liable in any event for neglect or
wrongdoing of them or any officer, agent, employee or investment adviser of the
Trust, but

C-3
<PAGE>

nothing contained herein shall protect any Trustee against any liability to
which he would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
his office.

Article XI, Section 2 of Registrant's Declaration of Trust provides as
follows:

Section 2.

(a) Subject to the exceptions and limitations contained in Section (b)
below:

(i) every person who is, or has been, a Trustee or officer of the Trust (a
"Covered Person") shall be indemnified by the Trust to the fullest extent
permitted by law against liability and against expenses reasonably incurred or
paid by him in connection with any claim, action, suit or proceeding which he
becomes involved as a party or otherwise by virtue of his being or having been a
Trustee or officer and against amounts paid or incurred by him in the settlement
thereof;

(ii) the words "claim," "action," "suit," or "proceeding" shall apply to
all claims, actions, suits or proceedings (civil, criminal or other, including
appeals), actual or threatened, and the words "liability" and "expenses" shall
include, without limitation, attorneys' fees, costs, judgments, amounts paid in
settlement, fines, penalties and other liabilities.

(b) No indemnification shall be provided hereunder to a Covered Person:

(i) Who shall have been adjudicated by a court or body before which the
proceeding was brought (A) to be liable to the Trust or its Shareholders by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his office or (B) not to have acted in
good faith in the reasonable belief that his action was in the best interest of
the Trust; or

(ii) in the event of a settlement, unless there has been a determination
that such Trustee or officer did not engage in willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
his office,

(A) by the court or other body approving the settlement; or
(B) by at least a majority or those Trustees who are neither
interested persons of the Trust nor are parties to the matter
based upon a review

C-4
<PAGE>

of readily available facts (as opposed to a full trial-type
inquiry); or
(C) by written opinion of independent legal counsel based upon a
review of readily available facts (as opposed to a full trial-
type inquiry); provided, however, that any Shareholder may, by
appropriate legal proceedings, challenge any such determination
by the Trustees, or by independent counsel.

(c) The rights of indemnification herein provided may be insured against
by policies maintained by the Trust, shall be severable, shall not be exclusive
of or affect any other rights to which any Covered Person may now or hereafter
be entitled, shall continue as to a person who has ceased to be such Trustee or
officer and shall inure to the benefit of the heirs, executors and
administrators of such a person. Nothing contained herein shall affect any
rights to indemnification to which Trust personnel, other than Trustees and
officers, and other persons may be entitled by contract or otherwise under the
law.

(d) Expenses in connection with the preparation and presentation of a
defense to any claim, action, suit or proceeding of the character described in
paragraph (a) of this Section 2 may be paid by the Trust from time to time prior
to final disposition thereof upon receipt of an undertaking by or on behalf of
such Covered Person that such amount will be paid over by him to the Trust if it
is ultimately determined that he is not entitled to indemnification under this
Section 2; provided, however, that either (a) such Covered Person shall have
provided appropriate security for such undertaking, (b) the Trust is insured
against losses arising out of any such advance payments or (c) either a majority
of the Trustees who are neither interested persons of the Trust nor are parties
to the matter, or independent legal counsel in a written opinion, shall have
determined, based upon a review of readily available facts (as opposed to a full
trial-type inquiry), that there is a reason to believe that such Covered Person
will be found entitled to indemnification under this Section 2.

The general effect of this Indemnification will be to indemnify the
officers and Trustees of the Registrant from costs and expenses arising from any
action, suit or proceeding to which they may be made a party by reason of their
being or having been a Trustee or officer of the Registrant, except where such
action is determined to have arisen out of the willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
the Trustee's or officer's office.

The Registrant's Investment Advisory Agreement provides as follows:

C-5
<PAGE>

The Manager shall not be liable for any error of judgment or mistake of law
or for any loss suffered by the Company or any Series in connection with the
matters to which this Agreement relate except a loss resulting from the willful
misfeasance, bad faith or gross negligence on its part in the performance of its
duties or from reckless disregard by it of its obligations and duties under this
Agreement. Any person, even though also an officer, partner, employee, or agent
of the Manager, who may be or become an officer, Board member, employee or agent
of the Company shall be deemed, when rendering services to the Company or acting
in any business of the Company, to be rendering such services to or acting
solely for the Company and not as an officer, partner, employee, or agent or one
under the control or direction of the Manager even though paid by it.

The Registrant's Underwriting Agreement provides as follows:

The Underwriter agrees to use its best efforts in effecting the sale and
public distribution of the shares of the Fund through dealers and to perform its
duties in redeeming and repurchasing the shares of the Fund, but nothing
contained in this Agreement shall make the Underwriter or any of its officers
and directors or shareholders liable for any loss sustained by the Fund or any
of its officers, trustees, or shareholders, or by any other person on account of
any act done or omitted to be done by the Underwriter under this Agreement
provided that nothing herein contained shall protect the Underwriter against any
liability to the Fund or to any of its shareholders to which the Underwriter
would otherwise be subject by reason of willful misfeasance, bad faith, or gross
negligence in the performance of its duties as Underwriter or by reason of its
reckless disregard of its obligations or duties as Underwriter under this
Agreement. Nothing in this Agreement shall protect the Underwriter from any
liabilities which they may have under the Securities Act of 1933 or the
Investment Company Act of 1940.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to trustees, officers or persons controlling the
Registrant pursuant to the foregoing provisions, the Registrant has been
informed that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable. See Item 32 herein.

C-6
<PAGE>

Item 28. Business and Other Connections of Investment Adviser

First Investors Management Company, Inc., the Registrant's Investment
Adviser, also serves as Investment Adviser to:

First Investors Cash Management Fund, Inc.
First Investors Series Fund
First Investors Series Fund II, Inc.
First Investors Fund For Income, Inc.
First Investors Government Fund, Inc.
First Investors High Yield Fund, Inc.
First Investors Insured Tax Exempt Fund, Inc.
First Investors Global Fund, Inc.
First Investors Life Series Fund
First Investors New York Insured Tax Free Fund, Inc.
First Investors Special Bond Fund, Inc.
First Investors Tax-Exempt Money Market Fund, Inc.
First Investors U.S. Government Plus Fund

Affiliations of the officers and directors of the Investment Adviser are
set forth in Part B, Statement of Additional Information, under "Directors or
Trustees and Officers."

Item 29. Principal Underwriters

(a) First Investors Corporation, Underwriter of the Registrant, is also
underwriter for:

First Investors Cash Management Fund, Inc.
First Investors Series Fund
First Investors Series Fund II, Inc.
First Investors Fund For Income, Inc.
First Investors Government Fund, Inc.
First Investors High Yield Fund, Inc.
First Investors Insured Tax Exempt Fund, Inc.
First Investors Global Fund, Inc.
First Investors New York Insured Tax Free Fund, Inc.
First Investors Tax-Exempt Money Market Fund, Inc.
First Investors U.S. Government Plus Fund

(b) The following persons are the officers and directors of the
Underwriter:

C-7
<PAGE>

Position and Position and
Name and Principal Office with First Office with
Business Address Investors Corporation Registrant
- ------------------ --------------------- -------------
Glenn O. Head Chairman and Director President
95 Wall Street and Trustee
New York, NY 10005

John T. Sullivan Director Chairman of the
95 Wall Street Board of
New York, NY 10005 Trustees

Roger L. Grayson Director Trustee
95 Wall Street
New York, NY 10005

Joseph I. Benedek Treasurer Treasurer
10 Woodbridge Center
Drive
Woodbridge, NJ 07095

Concetta Durso Assistant Vice Vice President
95 Wall Street President and and Secretary
New York, NY 10005 Assistant Secretary

Lawrence A. Fauci Senior Vice President None
95 Wall Street and Director
New York, NY 10005

Kathryn S. Head Vice President, Trustee
10 Woodbridge Center Chief Financial
Drive Officer and Director
Woodbridge, NJ 07095

Louis Rinaldi Senior Vice None
10 Woodbridge Center President
Drive
Woodbridge, NJ 07095

Frederick Miller Vice President None
10 Woodbridge Center
Drive
Woodbridge, NJ 07095

Larry R. Lavoie Secretary and None
95 Wall Street General Counsel
New York, NY 10005

C-8
<PAGE>
Position and Position and
Name and Principal Office with First Office with
Business Address Investors Corporation Registrant
- ------------------ --------------------- -------------
Carol Lerner Brown Assistant Secretary Assistant
95 Wall Street Secretary
New York, NY 10005

Marvin M. Hecker President None
95 Wall Street
New York, NY 10005

Matthew Smith Vice President None
10 Woodbridge Center
Drive
Woodbridge, NJ 07095

Howard M. Factor Vice President None
95 Wall Street
New York, NY 10005

Jeremiah J. Lyons Director None
56 Weston Avenue
Chatham, NJ 07928

Jane W. Kruzan Director None
15 Norwood Avenue
Summit, NJ 07901-0493

Kellen M. Carson Vice President None
95 Wall Street
New York, NY 10005

Anne Condon Vice President None
10 Woodbridge Center
Drive
Woodbridge, NJ 07095

Item 30. Location of Accounts and Records

Physical possession of the books, accounts and records of the
Registrant are held by First Investors Management Company, Inc. and its
affiliated companies, First Investors Corporation and Administrative Data
Management Corp., at their corporate headquarters, 95 Wall Street, New York, NY
10005 and administrative offices, 10 Woodbridge Center Drive, Woodbridge, NJ

C-9
<PAGE>

07095, except for those maintained by the Registrant's Custodian, The Bank of
New York, 48 Wall Street, New York, NY 10286.

Item 31. Management Services

Inapplicable

Item 32. Undertakings

The Registrant undertakes to carry out all indemnification provisions
of its Declaration of Trust, Advisory Agreement and Underwriting Agreement in
accordance with Investment Company Act Release No. 11330 (September 4, 1980) and
successor releases.

Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to trustees, officers and controlling persons of
the Registrant pursuant to the provisions under Item 27 herein, 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 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 trustee, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, 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 Act and will
be governed by the final adjudication of such issue.

The Registrant hereby undertakes to furnish a copy of its latest
annual report to shareholders, upon request and without charge, to each person
to whom a prospectus is delivered.

C-10
<PAGE>

INDEX TO EXHIBITS

Exhibit
Number Description
- ------- -----------
10(b) Consent of Arizona tax counsel
10(c) Consent of California tax counsel
10(d) Consent of Colorado and Georgia counsel
10(e) Opinion and Consent of Connecticut tax counsel
10(f) Opinion and Consent of Florida tax counsel
10(g) Consent of Maryland tax counsel
10(h) Consent of Massachusetts tax counsel
10(i) Consent of Michigan tax counsel
10(j) Consent of Minnesota tax counsel
10(k) Consent of Missouri tax counsel
10(l) Opinion and Consent of New Jersey tax counsel
10(m) Consent of North Carolina tax counsel
10(n) Consent of Ohio tax counsel
10(o) Consent of Oregon tax counsel
10(p) Consent of Virginia tax counsel
11(a) Consent of accountants
11(b) Power of Attorney
16 Performance Calculations

C-11
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant represents that this Amendment
meets all the requirements for effectiveness pursuant to Rule 485(b) under the
Securities Act of 1933, and has duly caused this Post-Effective Amendment to
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York, State of New York, on the
17th day of April, 1995.

FIRST INVESTORS MULTI-STATE
INSURED TAX FREE FUND
(Registrant)

By: /s/ Glenn O. Head
---------------------------
Glenn O. Head
President and Trustee

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, this Amendment to this Registration Statement
has been signed below by the following persons in the capacities and on the
dates indicated.

/s/ Glenn O. Head Principal Executive April 17, 1995
- ---------------------
Glenn O. Head Officer and Trustee

/s/ Joseph I. Benedek Principal Financial April 17, 1995
- ---------------------
Joseph I. Benedek and Accounting Officer

/s/ Kathryn S. Head Trustee April 17, 1995
- ---------------------
Kathryn S. Head

/s/ James J. Coy Trustee April 17, 1995
- ---------------------
James J. Coy

/s/ F. William Ortman Trustee April 17, 1995
- ---------------------
F. William Ortman, Jr.

<PAGE>

/s/ Roger L. Grayson Trustee April 17, 1995
- ---------------------
Roger L. Grayson

/s/ Herbert Rubinstein Trustee April 17, 1995
- ----------------------
Herbert Rubinstein

/s/ James M. Srygley Trustee April 17, 1995
- ---------------------
James M. Srygley

/s/ John T. Sullivan Trustee April 17, 1995
- ---------------------
John T. Sullivan

/s/ Rex R. Reed Trustee April 17, 1995
- ---------------------
Rex R. Reed

/s/ Robert F. Wentworth Trustee April 17, 1995
- -----------------------
Robert F. Wentworth

*By: /s/ Larry R. Lavoie
-------------------------
Larry R. Lavoie
Attorney-in-fact

<PAGE>

LAW OFFICES
RUDNICK & WOLFE
A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS
SUITE 2000
101 EAST KENNEDY BLVD.
TAMPA, FLORIDA 33602-5133
TELEPHONE (813) 229-2111
TELECOPIER (813) 229-1447
DAVID A. BEYER

February 16, 1995

VIA FEDERAL EXPRESS
- -------------------

First Investors Multi-State
Insured Tax Free Fund
95 Wall Street
New York, New York 10005

Re: FIRST INVESTORS FLORIDA INSURED
TAX FREE SERIES/FLORIDA TAXATION
--------------------------------

Gentlemen:

We have acted as special Florida counsel to First Investors Multi-State
Insured Tax Free Fund (the "FUND") in connection with the issuance by First
Investors Florida Insured Tax Free Series (the "FLORIDA SERIES"), a separate
designated series of the Fund, of Class A and Class B shares of beneficial
interest in the Florida Series (the "SHARES"). In that connection, you have
requested our opinion as to the application of Florida state and local taxes to
the Florida Series and to investors who purchase Shares.

You have authorized us to assume that the proposed offer and sale of the
Shares will be carried out in the same manner and upon the same terms and
conditions as those described in the prospectus and Statement of Additional
Information dated January 12, 1995 which you have provided to us relating to the
Florida Series(1). In addition, you have authorized us to assume and we have
assumed that:

1. The Fund is a Massachusetts business trust organized under a trust
agreement in which a board of trustees is responsible for its
administration and

- ---------------
1 We have not been furnished with a copy of the registration statement
relating to the issuance of the Shares by the Florida Series.

1
<PAGE>

and management. The Fund is a diversified open-end management investment
company, commonly called a mutual fund, registered under the Investment
Company Act of 1940, as amended.

2. The Shares will be purchased by various investors ("SHAREHOLDERS")
who may be individuals or corporations.

3. Each Share is an undivided beneficial interest of the Florida Series,
with equal dividend, voting, liquidation and redemption rights. By
purchasing a Share, an investor participates in the investment performance
of the investments held by the Florida Series.

4. The Florida Series has qualified for treatment as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986,
as amended (the "CODE") so that it will not be liable for federal income
taxes, and will be qualified to pay so-called "exempt-interest dividends."

5. The Florida Series will not be subject to federal income tax on net
capital gains and other taxable income distributed by it to Shareholders.
In addition, interest received from Municipal Instruments (defined below)
will not be subject to federal income taxes when distributed by the Florida
Series to Shareholders or reinvested on behalf of Shareholders.

6. For federal income tax purposes, each item of Fund income will have
the same character for each Shareholder as it has for the Fund.
Accordingly, to the extent that the income of the Fund consists of interest
excludable from federal gross income under Section 103 of the Code, such
income will be excludable from federal gross income of the Shareholders.

7. For federal income tax purposes, each Shareholder will have a taxable
event when, upon redemption or sale of his Shares, he receives cash or
other property. Gain or loss will be measured by comparing the proceeds of
such a redemption or sale with the shareholder's adjusted basis for the
Share. Distributions of income from the Florida Series relating to any
taxable obligations and net short-term capital gains, if any, are taxable
to Shareholders as ordinary income whether received in cash or reinvested
in additional shares of the Florida Series. Distributions of capital gains
realized by the Florida Series, when designated as such, are taxable to
Shareholders as long-term capital gains whether or not reinvested and
regardless of the length of time that the Shareholders have owned their
Shares.

8. Each series will be administered as a distinct entity with separate
certificates, investments, expenses, books and records.

2
<PAGE>

9. The assets of the Florida Series will consist solely of
interest-bearing obligations issued by or on behalf of the state of
Florida, its political subdivisions, and authorities, by the United States
and its agencies, or by the commonwealths of Puerto Rico, Guam, the Virgin
Islands, American Samoa, or the Northern Mariana Islands (the "MUNICIPAL
INSTRUMENTS"). Municipal Instruments include municipal bonds ("general
obligation" and "revenue" bonds), industrial development bonds, municipal
notes and municipal commercial paper. Some of the Municipal Instruments may
be acquired under repurchase agreements. While the objective of the Florida
Series is to invest as much as possible in Municipal Instruments consistent
with the preservation of capital, we note that the Florida Series is
authorized in its prospectus to invest up to 20% of its assets in fixed
income obligations subject to federal or state income tax. However, you
have told us that there is no present intention for the Florida Series to
invest in assets other than the Municipal Instruments.

10. The interest on the Municipal Instruments held by the Florida Series
will be exempt from federal income tax.

11. The Municipal Instruments have been issued in full compliance with
all requirements of Florida, federal or territorial law.

For the purposes of this letter, the following terms when capitalized have
the following meanings:

i. "FLORIDA CODE" means the Florida Income Tax Code, Chapter
220, Florida Statutes (1993), as amended. In the Florida Code,
the Florida legislature has adopted the Internal Revenue Code of
1986, as in effect on January 1, 1994, as the Internal Revenue
Code under which a Corporate shareholder must compute its income
for purposes of Florida corporate income taxation.

ii. "CODE" means the Internal Revenue Code of 1986, as
amended and in effect on January 1, 1995.

iii. "INDIVIDUAL SHAREHOLDER" means a Shareholder who is an
individual not subject to the income tax on corporations imposed
by the Florida Code.

iv. "CORPORATE SHAREHOLDER" means a Shareholder that is a
corporation subject to the income tax on corporations imposed by
the Florida Code.

3
<PAGE>

v. "NONBUSINESS INCOME" (as defined in the Florida Code) means
rents and royalties from real or tangible personal property,
capital gains, interest, dividends, and patent and copyright
royalties to the extent that they do not arise from transactions
and activities in the regular course of a corporate shareholder's
trade or business. The term Nonbusiness Income does not include
income from tangible and intangible property if the acquisition,
management and disposition of the property constitute integral
parts of a Corporate shareholder's regular trade or business
operations, or any amounts which could be included in
apportionable income without violating the due process clause of
the United States Constitution. For purposes of this definition,
"INCOME" means gross receipts plus all expenses directly or
indirectly attributable thereto.

vi. "COMMERCIAL DOMICILE" means the place that a corporation
maintains its principal place of business. The term "Commercial
Domicile" is not specifically defined in Florida law for Florida
corporate income tax purposes; however, the term is defined for
Florida's intangible personal property tax. According to the
recent statute, a corporation is considered to acquire a
commercial domicile in Florida "when it maintains its chief or
principal office in ... [Florida] where executive or management
functions are performed or where the course of business
operations is determined." Fla. Stat. { 199.175(1)(b) (1993).
Similarly, the Florida Supreme Court has attributed meaning to
the term on at least 2 occasions. In DEPT. OF REVENUE V. AMREP
CORP., 358 So.2d 1343, 1350 (Fla. 1978), the court implied that a
corporation's commercial domicile is its principal place of
business. In another, case, the court stated that a particular
corporation's domicile was where its head office was located and
the location from which its executive officers exercise control,
authority and direction of its activities. GAY V. BESSEMER
PROPERTIES, INC., 32 So.2d 587, 591 (Fla. 1947).

The opinion set forth below is qualified as stated therein and is
qualified further by all of the following:

(a) This opinion is based upon existing laws, ordinances and
regulations in effect as of the date hereof and as they presently
apply.

4
<PAGE>

(b) We express no opinion as to the effect of the laws of any state
or jurisdiction other than the state of Florida upon the
transaction as described herein.

(c) In rendering the opinion set forth below, we have relied, to
the extent we believe appropriate, as to matters of fact upon
representations and warranties that you have provided to us and
have made no independent investigation or verification of such
facts. No opinion is being expressed as to the effect of any
event, fact or circumstances of which we have no actual
knowledge.

Based on the foregoing, and in reliance thereon, but subject to the
assumptions, limitations and qualifications expressed herein, we are of the
opinion that:

(1) For Florida state income tax purposes, the Florida
Series will not be subject to the income tax imposed by the
Florida Code so long as it has no income subject to federal
income taxation.

(2) Because Florida does not impose an income tax on
individuals, Individual Shareholders will not be subject to
any Florida income tax on income realized by the Florida
Series. Each Corporate Shareholder will be subject to
Florida income taxation on its share of the income realized
by the Florida Series notwithstanding the tax exempt status
of the interest received from any Municipal Instruments
under Section 103(a) of the Code or any other federal law,
unless the interest income constitutes Nonbusiness Income.
Nevertheless, any Corporate Shareholder that has its
Commercial Domicile in Florida will be taxable under the
Florida Code on its share of the Florida Series income which
constitutes Nonbusiness Income.

(3) An Individual Shareholder will not be subject to
Florida income taxation with respect to gain realized when
securities held in the Florida Series are sold, redeemed, or
paid at maturity. A Corporate Shareholder will be subject to
Florida income taxation with respect to gain realized on
such a sale, redemption, or payment at maturity of
securities held by the Florida Series, except to the extent
that the gain realized therefrom constitutes

5
<PAGE>

Nonbusiness Income. Nevertheless, to the extent that gains
realized by a Corporate Shareholder arising from a sale,
redemption, or payment at maturity constitute Nonbusiness
Income, such gain will be taxable under the Florida Code if
the Corporate Shareholder's Commercial Domicile is in
Florida.

(4) Any gain realized by an Individual Shareholder from the
redemption, sale, or other disposition of a Share will not
be subject to Florida income tax. Any gain realized by a
Corporate Shareholder from the redemption, sale, or other
disposition of a Share will be subject to Florida income
tax, except to the extent that the gain realized therefrom
constitutes Nonbusiness Income. Nevertheless, to the extent
that gain realized by a Corporate Shareholder arising from a
sale, redemption, or other disposition of a Share
constitutes Nonbusiness Income, such gain will be taxable
under the Florida Code if the Corporate Shareholder's
Commercial Domicile is in Florida.

(5) An Individual Shareholder will not be subject to
Florida income taxation with respect to amounts paid under
the AMBAC Indemnity Corporation ("AMBAC") insurance policies
representing interest on defaulted obligations held by the
Florida Series. A Corporate Shareholder will be subject to
Florida income taxation on its Share of amounts paid under
the AMBAC insurance policies representing maturing interest
on defaulted obligations held by the Florida Series, except
to the extent that such payments constitute Nonbusiness
Income as defined in the Florida Code. Nevertheless, any
Corporate shareholder that has its Commercial Domicile in
Florida will be taxable under the Florida Code on its Share
of amounts paid under the AMBAC insurance policies
representing maturing interest on defaulted obligations held
by the Florida Series even if such payments constitute
Nonbusiness Income.

(6) An Individual Shareholder will not be subject to
Florida income taxation with respect to gain realized with
respect to amounts paid under the AMBAC insurance policies
representing principal on defaulted obligations

6
<PAGE>

held by the Florida Series. A Corporate Shareholder will
be subject to Florida income taxation with respect to gain
realized on its Share of amounts paid under the AMBAC
insurance policies representing principal on defaulted
obligations held by the Florida Series except to the extent
that the gain realized constitutes Nonbusiness Income.
Nevertheless, gain realized, by any Corporate shareholder
that has its Commercial Domicile in Florida, on such
payments representing principal on defaulted obligations
held by the Florida Series, will be taxable under the
Florida Code even if such payments constitute Nonbusiness
Income.

(7) Even if interest on indebtedness incurred to purchase
or carry Shares by a Shareholder is not deductible for
Federal income tax purposes under Code Section 265(a)(2) or
any other law, it will be deductible, in effect, by
Corporate Shareholders for Florida income tax purposes if
interest earned on the Shares is other than Nonbusiness
Income. Nevertheless, if interest earned on the Shares is
Nonbusiness Income, any Corporate shareholder that has its
Commercial Domicile in Florida may reduce the amount of
interest included as Nonbusiness Income by the amount of
expenses directly or indirectly attributable thereto.

(8) Shares of the Florida Series will be subject to Florida
estate tax only if owned by Florida residents, certain
natural persons not domiciled in Florida,(2) or

- ------------------
(2) Shares owned by natural persons who are residents of the United States but
are not residents of Florida ("FLORIDA NONRESIDENTS") at the time of death
may be subject to Florida estate tax only if the Shares have a "business
situs" in Florida. "Business situs" is not defined in Florida case law,
statutory law, or regulations for Florida estate tax purposes. However
"taxable situs" (which includes "business situs") is defined in Florida law
for intangible personal property tax purposes. Intangible personal property
has a "taxable situs" in Florida when it is owned, managed, or controlled
by any person domiciled in Florida. For this purpose, a natural person that
is a legal resident of Florida or any person, including a TRUST who has
established a Commercial Domicile in Florida is considered domiciled in
Florida. (Accordingly, the taxability of intangible personal property held
in TRUST is determined by the trust's Commercial Domicile.) In addition,
intangible personal property has a "taxable

7
<PAGE>

certain natural persons not residents of the United States.
(3) However, the Florida estate tax is limited to the amount
of the credit allowable under the applicable Federal Revenue
Act (currently Section 2011 [and in some cases Section 2102]
of the Code) for death taxes actually paid to the several
states.

- ----------------------
situs" in Florida when it is deemed to have a "business situs" in Florida
and it is owned, managed, or controlled by a person transacting business in
Florida, even though the owner claims a domicile elsewhere. Intangible
personal property is deemed to have a Florida "business situs" when the
intangible receives the benefit and protection of Florida's laws and courts
and is derived from, arises out of, or is issued in connection with
business transacted in Florida with a customer in Florida. For purposes, of
the foregoing determination, business is transacted in Florida when any
occupation, profession, or commercial activity, including financing,
leasing, selling, or servicing activities, is regularly conducted with
customers in Florida from any office, plant, home, or any other business
location in Florida, or by or through agents, employees, or representatives
of any kind in Florida, whether or not such persons are vested with
discretionary authority.

Based on the foregoing, as of the date of this letter, it is unlikely that
in any instance a Share owned by a Florida nonresident would have a taxable
situs in Florida. However, we cannot offer any assurance or guaranty that a
Florida state or local taxing authority or a Florida court might not differ
with this conclusion.

The Florida estate tax on Shares owned by a Florida nonresident would be a
sum equal to such proportion of the amount of the credit allowable under
the applicable Federal Revenue Act (currently, Section 2011 of the Internal
Revenue Code of 1986, as amended) for death taxes actually paid to the
several states, as the value of the Shares taxable in Florida bears to the
value of the entire gross estate of the decedent wherever situated.

(3) Shares owned by natural persons who are not residents of the United
States (the 50 states and the District of Columbia) ("NONRESIDENT ALIENS")
are subject to Florida estate tax only if such Shares are physically
present in Florida at the time of the owner's death. The Florida estate tax
on Shares owned by a non-resident alien would be a sum equal to such
proportion of the amount of the credit allowable under the applicable
Federal Revenue Act (currently Section 2102 of the Code) for state death
taxes actually paid to the several states, as the value of the Shares
taxable in Florida bears to the value of the estate taxable by the United
States wherever situated.

8
<PAGE>

(9) Neither the securities held by the Florida Series
nor the Shares will be subject to the Florida ad valorem tax
or Florida sales or use tax.

(10) The portion of the net asset value of the Florida
Series, measured on the last business day of each calendar
year, which will be exempt from Florida intangible personal
property tax ("INTANGIBLE TAX"), is as follows:

(a) The portion of the net asset value of the
Florida Series' portfolio that is attributable to
direct obligations of the United States government (and
its agencies, and the Commonwealths of Puerto Rico,
Guam, the Virgin Islands, American Samoa, and the
Northern Mariana Islands) (collectively the "EXEMPT
INSTRUMENTS") will be exempt from Intangible Tax.

(b) If the remaining portion of the net asset value of
the Florida Series' portfolio, after removing the
portion representing Exempt Instruments, represents
assets which are themselves exempt from the Intangible
Tax, then this portion will also be exempt from the
Intangible Tax.

(c) If the remaining portion of the net asset
value of the Florida Series' portfolio, after removing
the portion attributable to Exempt Instruments,
represents any asset which is subject to the Intangible
Tax under Florida law, then this portion will be
subject to the Intangible Tax.

The Shareholders will be exempt from the Intangible Tax on their shares to
the extent that the net asset value of the Florida Series' portfolio is exempt.
(The FLORIDA SERIES has no present intention of investing in assets which will
be subject to the Intangible Tax.)

(11) To the extent that the Florida Series holds "repurchase
agreements" based on obligations which would themselves be
exempt from Florida intangible personal property tax but the
Florida Series does not have the risks or rights associated
with ownership of the underlying obligations, the
proportional interest of a

9
<PAGE>

Shareholder in the portion of the securities held by the
Florida Series represented by the repurchase agreements will
NOT be exempt from Florida intangible personal property
tax.4 To the extent that the Florida Series does have the
risks or rights associated with ownership of the underlying
obligations, then the proportional interest of a Shareholder
in the portion of the securities held by the Florida Series
represented by the repurchase agreements may be exempt from
Florida intangible personal property tax.

(12) The sale, redemption, or other disposition of the
Municipal Instruments by the Florida Series will not subject
either the Florida Series or the Shareholders to Florida
documentary stamp tax.
- -------------------
(4) Recently, in DEPT. OF REVENUE V. PAGE, 541 So.2d 1270 (Fla. 5th DCA 1989),
the court held that certain repurchase agreements, whereby a business
investment trust mutual fund purchased federal government securities for
cash and the seller agreed to repurchase the securities at the original
price plus an agreed upon amount of interest at a specified date in the
future, did not constitute the purchase and sale of federal government
securities and would not be exempt from the Florida intangible personal
property tax. The court based its analysis on a determination of whether
the fund actually owned the underlying securities or whether the underlying
securities served as mere collateral and therefore the transaction had more
of the characteristics of a loan than a purchase of a security. In PAGE,
the repurchase agreements provided that the fund had to return the same
securities to the issuer, it could neither resell nor re-register the
securities, it was protected from falling prices, its income derived from a
separate interest rate unrelated to the underlying securities, the fund had
to return to the seller any excess proceeds it received upon sale of the
underlying securities upon default, and there was a specific date set for
repurchase. Thus, given such characteristics, the court characterized the
repurchase agreements as more in the nature of a loan transaction than the
purchase of the underlying securities since the fund did not possess the
rights or risks associated with ownership. The court distinguished prior
cases in other jurisdictions where there were no restrictions on the
purchaser's right to transfer or encumber the underlying securities.
Accordingly, it is possible that some repurchase agreements based on
Florida or federal obligations, in which the Florida Series possesses the
risks or rights associated with ownership, may be exempt from Florida
intangible personal property tax; but repurchase agreements in which the
Florida Series does not bear the risks or rights associated with ownership,
will be subject to Florida intangible personal property tax.

10
<PAGE>

(13) The issuance and sale of the Shares by the Florida
Series will not subject either the Florida Series or the
Shareholders to Florida documentary stamp tax.

(14) The transfer of Shares by a Shareholder will not
be subject to Florida documentary stamp tax.

This letter is not to be construed as a prediction of a favorable outcome
with respect to any issue for which no favorable prediction is made herein, or
as a guaranty of any tax result, or as offering an assurance or guaranty that a
Florida state or local taxing authority might not differ with our conclusions,
or raise other questions or issues upon audit, or that such action may not be
judicially sustained.

We have not examined any of the securities to be acquired by the Florida
Series, and we express no opinion as to whether the interest on any such
securities would, in fact, be tax-exempt if directly received by a shareholder;
nor have we made any review of the proceedings relating to the issuance of the
obligations.

We hereby consent to the filing of this opinion as an exhibit to
posteffective amendment no. 18 to the Fund's Registration Statement (File No.
33-4077) and to the reference to our firm in such Registration Statement and the
Prospectus included therein. In giving such consent, we do not thereby admit
that we are within the category of persons whose consent is required by Section
7 of the Securities Act of 1933, as amended, and the rules and regulations
thereunder.

Sincerely yours,

RUDNICK & WOLFE

By: /S/ David A. Beyer
------------------------
David A. Beyer

DAB/K_W/sh
11
<PAGE>

LAW OFFICES
RUDNICK & WOLFE

A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS

SUITE 2000
101 EAST KENNEDY BLVD.
TAMPA, FLORIDA 33602-5133
TELEPHONE (813) 229-2111
TELECOPIER (813) 229-1447

DAVID A. BEYER

April 7, 1995

Ms. Dale Kaplan
Fund Administrator
First Investors Management Company, Inc.
95 Wall Street
New York, New York 10005-4297

RE: FIRST INVESTORS MULTI-STATE INSURED TAX FREE FUND

Gentlemen:

We hereby consent to the use of our name and the reference of
our firm in Post-Effective Amendment No. 18 to the Registration Statement on
Form N-1A of the First Investors Multi-State Insured Tax Free Fund and the
related Prospectus.

Very truly yours,

RUDNICK & WOLFE

/s/ David A. Beyer
David A. Beyer

<PAGE>

KELLEY DRYE & WARREN
A PARTNERSHIP INCLUDING PROFESSIONAL ASSOCIATIONS
TWO STAMFORD PLAZA
281 TRESSER BOULEVARD
STAMFORD, CT 06901-3229

(203) 324-1400

April 13, 1995

First Investors Multi-State
Insured Tax Free Fund
120 Wall Street
New York, New York 10005

Re: First Investors Multi-State Insured
Tax Free Fund Connecticut Series
-----------------------------------

Gentlemen:

You have requested our opinion regarding the taxability of certain
distributions from the First Investors Connecticut Insured Tax Free Series (the
"Connecticut Series"), a separate, designated series of First Investors
Multi-State Insured Tax Free Fund (the "Fund"), for purposes of the Connecticut
personal income tax in the case of individual investors and the corporation
business tax in the case of corporate investors.

You have advised us that the Connecticut Series will invest primarily
in tax-exempt obligations issued by or on behalf of the State of Connecticut,
its municipal governments and public authorities ("Connecticut Obligations"),
and tax-exempt obligations issued by territories and possessions of the United
States or of other states, their municipal governments and public authorities,
the interest of which is exempt from Federal income taxes ("Other Exempt
Obligations").

The Fund is an open-end management company organized as a business
trust under the laws of the Commonwealth of Massachusetts. You have advised us
that the Connecticut Series intends to qualify and thereafter continue to
qualify as a regulated investment company as defined in Section 851 of the
Internal Revenue Code of 1986, as amended (the "Code"), and be eligible to pay
"exempt-interest dividends" as provided in Section 852(b)(5) of the Code.

<PAGE>

First Investors Multi-State
Insured Tax Free Fund
April 13,1995
Page 2

In furnishing this opinion, we have reviewed such provisions of
Connecticut law as we deemed appropriate. In addition, we have reviewed the
Fund's Amended and Restated Declaration of Trust, dated September 22, 1994, and
the Connecticut Series Prospectus dated January 12, 1995 and the Statement of
Additional Information dated January 12, 1995.

We have assumed for purposes of this opinion that the Connecticut
Series will qualify for treatment as a regulated investment company under
Subchapter M of the Code.

Based upon the foregoing, we are of the opinion that under existing
law applicable to shareholders of the Connecticut Series:

1. Shareholders of the Connecticut Series who are otherwise subject
to the Connecticut personal income tax imposed on individuals will not be
subject to such tax on distributions with respect to shares of the Connecticut
Series to the extent that such distributions qualify as either (a)
"exempt-interest dividends" (as defined in Section 852(b)(5) of the Code)
attributable to interest on Connecticut Obligations or (b) "exempt dividends"
for Connecticut income tax purposes.

2. Shareholders of the Connecticut Series who are otherwise subject
to the Connecticut personal income tax will be subject to such tax on
distributions with respect to shares of the Connecticut Series to the extent
that such distributions are other than (i) distributions that are "exempt
interest dividends" for federal income tax purposes attributable to interest on
Connecticut Obligations or (ii) "exempt dividends" for Connecticut income tax
purposes.

3. Shareholders of the Connecticut Series that are otherwise subject
to the Connecticut corporation business tax computed on the net income basis
must include in income distributions with respect to shares of the Connecticut
Series and gains resulting from the redemption or sale of shares of the
Connecticut Series. However, such shareholders may deduct in computing net
income (i) the portion, if any, of such distributions that are exempt interest
dividends attributable to state or local bonds issued prior to January 1, 1992
and (ii) 70 percent (100 percent in the case of such shareholders who own 20
percent or more of the vote or value of the outstanding shares of the
Connecticut Series) of such distributions with respect to their shares of the
Connecticut Series that qualify as dividends under Section 316 of the Code.

We have not examined any of the obligations to be acquired by the
Connecticut Series and express no opinion as to whether such obligations,
interest thereon, or gain from the

<PAGE>
First Investors Multi-State
Insured Tax Free Fund
April 13,1995
Page 3

sale or other disposition thereof are in fact exempt from any Federal or
Connecticut taxes. Moreover, we express no opinion as to whether distributions
with respect to the Connecticut Series that are attributable to interest on
Other Exempt Obligations, the taxation of which is prohibited by federal law,
are subject to the Connecticut personal income tax.

We consent to the inclusion of this opinion as an exhibit to the
Post-Effective Amendment No. 18 to the Fund's Registration Statement filed with
the Securities and Exchange Commission and the applications and registration
statements filed in accordance with the securities laws of the several states in
which shares of the Connecticut Series are to be offered, and we further consent
to the reference in the Prospectus to the fact that this opinion has been
rendered.

Very truly yours,

/s/ Kelley Drye & Warren

<PAGE>

HAWKINS, DELAFIELD & WOOD
67 WALL STREET, NEW YORK 10005

April 3, 1995

Members of the Board of
First Investors Multi-State Insured Tax Free Fund
(New Jersey Series)

Gentlemen:

We have acted as Special Counsel to First Investors Multi-State
Insured Tax Free Fund (New Jersey Series) in connection with the filing of Post-
Effective Amendment Number 18 to the Registration Statement with the United
States Securities and Exchange Commission. Based upon our review of applicable
provisions of New Jersey income tax law, we are of the opinion that:

1) Shareholders of the New Jersey Series who are New Jersey resident
individuals, estates and trusts will not be subject to the New Jersey Gross
Income Tax on distributions of interest and capital gains made by the New Jersey
Series to the extent that such distributions are from municipal bonds, private
activity bonds, municipal notes and municipal commercial paper issued by the
State of New Jersey, or its counties, municipalities, authorities, or other
political subdivisions which are within the scope of N.J.S.A. 54A:6-14; and

2) Such shareholders will not be subject to the New Jersey Gross
Income Tax on gains resulting from the redemption or sale of shares of the New
Jersey Series.

The foregoing will apply, however, only if in the year in which the
distribution is paid, the New Jersey Series qualifies as a regulated investment
company under the Internal Revenue Code of 1986, as amended, and the investments
of the New Jersey Series are limited to interest-bearing obligations,
obligations issued at a discount, and cash and cash items, including receivables
and financial options, futures, forward contracts, or other similar financial
instruments related to interest-bearing obligations, obligations issued at a
discount or bond indexes related thereto, and not less than 80% of the aggregate
principal amount of its

<PAGE>

Page 2.

investments (excluding financial options, futures, forward contracts, or other
similar financial instruments related to interest-bearing obligations,
obligations issued at a discount or bond indexes related thereto to the extent
such instruments are authorized by section 851(b) of the federal Internal
Revenue Code of 1986, as amended, cash and cash items, which cash items shall
include receivables) are comprised of obligations described in N.J.S.A. 54A:6-
14.

We are further of the opinion that a corporate shareholder of the New
Jersey Series subject to tax in New Jersey will be required to include in its
corporate tax base, distributions of interest and capital gains made by the New
Jersey Series for purposes of calculating its New Jersey Corporate Business Tax
or its New Jersey Corporate Income Tax. In addition, such corporate shareholder
will be required to include in its corporate tax base, gains resulting from the
redemption or sale of shares of the New Jersey Series for purposes of
calculating its New Jersey Business Tax or its New Jersey Corporate Income Tax.

We hereby consent to the inclusion of this opinion as an Exhibit to
Post-Effective Amendment Number 18 to the Registration Statement filed on behalf
of the Fund with the United States Securities and Exchange Commission and the
applications and registration statements filed in accordance with the securities
laws of the several states in which shares of the New Jersey Series are to be
offered. We further consent to the references in the Prospectus to our firm and
the fact that this opinion has been rendered.

Very truly yours,

/s/Hawkins, Delafield & Wood

<PAGE>

Consent of Independent Certified Public Accountants

First Investors Multi-State Insured Tax Free Fund
95 Wall Street
New York, New York 10005

We consent to the use in Post-Effective Amendment No. 18 to the
Registration Statement on Form N-1A (File No. 33-4077) of our report dated
January 31, 1995 relating to the December 31, 1994 financial statements of First
Investors Multi-State Insured Tax Free Fund, which are included in said
Registration Statement.

/s/ Tait, Weller & Baker

TAIT, WELLER & BAKER

Philadelphia, Pennsylvania
April 11, 1995

<PAGE>

O'CONNOR CAVANAGH
The Law Offices of
O'Connor, Cavanagh, Anderson, Westover, Killingsworth & Beshears
A Professional Association

April 10, 1995

First Investors Management Company
95 Wall Street
New York, New York 10005-4297

Re: First Investors Multi-State Insured Tax-Free Fund

Gentlemen:

We hereby consent to the use of our name and the reference of our firm in
Post-Effective Amendment No. 18 to the Registration Statement on Form N-1A of
the First Investors Multi-State Insured Tax Free Fund and the related
Prospectus.

Yours very truly,

/s/ O'Connor, Cavanagh, Anderson, Westover,
Killingsworth & Beshears P.A.

<PAGE>

PARKER, MILLIKEN, CLARK, O'HARA & SAMUELIAN
A PROFESSIONAL CORPORATION
ATTORNEYS AT LAW
333 SOUTH HOPE STREET, 27TH FLOOR
LOS ANGELES, CALIFORNIA 90071-1488
TELEPHONE (213) 683-6500

April 10, 1995

First Investors Management
Company, Inc.
95 Wall Street
New York, New York 10005

Re: First Investors Multi-State Insured Tax Free Fund
-------------------------------------------------

Gentlemen:

We hereby consent to the use of our name and the reference of our firm in
Post Effective Amendment No. 18 to the Registration Statement on Form N-1A of
First Investors Multi-State Insured Tax Free Fund and the related Prospectus.

Very truly yours,

/s/ Parker, Milliken, Clark, O'Hara & Samuelian

A Professional Corporation

<PAGE>

KUTAK ROCK
A PARTNERSHIP
INCLUDING PROFESSIONAL CORPORATIONS
SUITE 2900
717 SEVENTEENTH STREET
DENVER, COLORADO 80202-3329

303-297-2400
FACSIMILE 303-292-7799

April 7, 1995

First Investors
Management Company, Inc.
95 Wall Street
New York, NY 10005

Re: First Investors Multi-State Insured Tax Free Fund

Gentlemen:

Very truly yours,

/s/ William C. Gorham

William C. Gorham

<PAGE>

KUTAK ROCK
A PARTNERSHIP
INCLUDING PROFESSIONAL CORPORATIONS
4400 GEORGIA - PACIFIC CENTER
133 PEACHTREE STREET, N.E.
ATLANTA, GEORGIA 30303-1808

404-222-4600
FACSIMILE 404-222-4654

April 7, 1995

First Investors Management Company, Inc.
95 Wall Street
New York, NY 10005

Re: First Investors Multi-State Insured Tax Free Fund-Georgia Series

Ladies and Gentlemen:

We hereby consent to the use of our name and the reference of our firm in
Post-Effective Amendment No. 18 to the Registration Statement on Form N-1A of
First Investors Multi-State Insured Tax Free Fund and the related Prospectus.

Sincerely,

/s/ Kutak Rock
KUTAK ROCK

<PAGE>

VENABLE, BAETJER AND HOWARD, LLP
Including professional corporations

1800 Mercantile Bank & Trust Building
Two Hopkins Plaza
Baltimore, Maryland 21201-2978

March 30, 1995

First Investors Management Company, Inc.
95 Wall Street
New York, New York 10005

RE: First Investors Multi-State Insured Tax Free Fund
-------------------------------------------------

Gentlemen:

We hereby consent to the use of our name and the reference to our firm in
Post-Effective Amendment No. 18 to the Registration Statement on Form N-1A of
First Investors Multi-State Insured Tax Free Fund and the related prospectus.
In giving such consent, we do not thereby admit that we are within the category
of persons whose consent is required by Section 7 of the Securities Act of 1933,
as amended, and the rules and regulations thereunder.

Very truly yours,

/s/ Venable, Baetjer and Howard, LLP

<PAGE>

PALMER & DODGE
One Beacon Street
Boston, Massachusetts 02108

April 7, 1995

First Investors Management Company, Inc.
95 Wall Street
New York, New York 10005-4297

Re: First Investors Multi-State Insured Tax Free Fund

Gentlemen:

Very truly yours,

/s/ Palmer & Dodge

<PAGE>

DICKINSON, WRIGHT, MOON, VAN DUSEN & FREEMAN
COUNSELLORS AT LAW
525 NORTH WOODWARD AVENUE
P.O. BOX 509
BLOOMFIELD HILLS, MICHIGAN 48303-0509

TELEPHONE (810) 646-4300
FACSIMILE (810) 433-7274

April 10, 1995

First Investors Management Company, Inc.
95 Wall Street
New York, New York 10005-4297

Re: First Investors Multi-State Insured Tax Free Fund

Gentlemen:

We hereby consent to the use of our Firm name and the reference to our Firm
in Post-Effective Amendment No. 18 to the Registration Statement on Form N-1A of
First Investors Multi-State Insured Tax Free Fund and in the related Prospectus.

Very truly yours,

/s/ Dickinson, Wright, Moon, Van Dusen & Freeman

DICKINSON, WRIGHT, MOON, VAN DUSEN & FREEMAN

<PAGE>

FAEGRE & BENSON
PROFESSIONAL LIMITED LIABILITY PARTNERSHIP

2200 NORWEST CENTER, 90 SOUTH SEVENTH STREET
MINNEAPOLIS, MINNESOTA 55402-3901
TELEPHONE 612-336-3000
FACSIMILE 612-336-3026

April 6, 1995

First Investors Management
Company, Inc.
95 Wall Street
New York, New York 10005

Re: First Investors Multi-State
Insured Tax Free Fund

Gentlemen:

We hereby consent to the reference to us under the heading "Minnesota" that
deals with Minnesota taxes in the Prospectus to be filed as part of Post-
Effective Amendment No. 18 to the Registration Statement of First Investors
Multi-State Insured Tax Free Fund. In giving such consent, we do not thereby
admit that we are in the category of persons whose consent is required under
section 7 of the Securities Act of 1933, as amended.

Very truly yours,

/s/ Faegre & Benson

FAEGRE & BENSON
PROFESSIONAL LIMITED
LIABILITY PARTNERSHIP

<PAGE>

LAW OFFICES
SHOOK, HARDY & BACON P.C.
ONE KANSAS CITY PLACE
1200 MAINE STREET
KANSAS CITY, MISSOURI 64105-2118
TELEPHONE (816) 474-6550 - FACSIMILE (816) 421-5547

April 13, 1995

First Investors Management Company, Inc.
95 Wall Street
New York, New York 10005-4297

Re: First Investors Multi-State Insured Tax Free Fund

Gentlemen:

By this consent, we confirm that the provisions of our opinion letter dated
April 8, 1993, dealing with assumptions and limitations remain in full force and
effect.

Very truly yours,

/s/ Shook, Hardy & Bacon P.C.

SHOOK, HARDY & BACON P.C.

<PAGE>

LAW OFFICES
SANDS ANDERSON
MARKS & MILLER
A PROFESSIONAL CORPORATION

April 13, 1995

First Investors Management Company, Inc.
95 Wall Street
New York, NY 10005-4297

RE: First Investors Multi-State Insured Tax Free Fund

Gentlemen:

Very truly yours,

SANDS, ANDERSON, MARKS & MILLER
a Professional Corporation

By: /s/ Daniel M. Seigel
-------------------------
Vice President

<PAGE>

WYRICK, ROBBINS, YATES & PONTON L.L.P.
ATTORNEYS AT LAW
THE SUMMIT
4101 LAKE BOONE TRAIL, SUITE 300
RALEIGH, NORTH CAROLINA 27607-7506

MAILING ADDRESS
POST OFFICE DRAWER 17803
RALEIGH, NORTH CAROLINA 27619

TELECOPIER
(919) 781-4865

TELEPHONE
(919) 781-4000

April 11, 1995

First Investors Management Company, Inc.
95 Wall Street
New York, New York 10005

Re: First Investors Multi-State Insured Tax Free Fund
-------------------------------------------------

Gentlemen:

Very truly yours,

/s/ Wyrick, Robbins, Yates & Ponton L.L.P.

<PAGE>

Squire, Sanders & Dempsey
Counsellors at Law
4900 Society Center
127 Public Square
Cleveland, Ohio 44114-1304
April 10, 1995

First Investors Management Company, Inc.
95 Wall Street
New York, New York 10005

Re: First Investors Multi-State Insured Tax-Free Fund
-------------------------------------------------

Gentlemen:

We hereby consent to the use of our name and the reference of our firm
in Post-Effective Amendment No. 18 to the Registration Statement on Form N-1A of
First Investors Multi-State Insured Tax-Free Fund and the related Prospectus.

Very truly yours,

/s/ Squire, Sanders & Dempsey

<PAGE>

WEISS, JENSEN, ELLIS & HOWARD
A PROFESSIONAL CORPORATION
ATTORNEYS AT LAW

2300 U.S. BANCORP TOWER
111 S.W. FIFTH AVENUE
PORTLAND, OREGON 97204

TELEPHONE (503) 243-2300
(800) 736-2301
FACSIMILE (503) 241-8014

April 7, 1995

First Investors Management Company, Inc.
95 Wall Street
New York, New York 10005-4297

Re: First Investors Multi-State Insured Tax Free Fund
-------------------------------------------------

Gentlemen:

Very truly yours,

/s/ Weiss, Jensen, Ellis & Howard

WEISS, JENSEN, ELLIS & HOWARD

<PAGE>

First Investors Multi-State Insured Tax Free Fund

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS that the undersigned officer and/or trustee
of First Investors Multi-State Insured Tax Free Fund hereby appoints Larry R.
Lavoie or Glenn O. Head, and each of them, his true and lawful attorney to
execute in his name, place and stead and on his behalf a Registration Statement
on Form N-1A for the registration pursuant to the Securities Act of 1933 and the
Investment Company Act of 1940 of shares of beneficial interest of said
Massachusetts business trust, and any and all amendments to said Registration
Statement (including post-effective amendments), and all instruments necessary
or incidental in connection therewith and to file the same with the Securities
and Exchange Commission. Said attorney shall have full power and authority to
do and perform in the name and on behalf of the undersigned every act whatsoever
requisite or desirable to be done in the premises, as fully and to all intents
and purposes as the undersigned might or could do, the undersigned hereby
ratifying and approving all such acts of said attorney.

IN WITNESS WHEREOF, the undersigned has executed this instrument this 19th
day of January, 1995.

/s/James M. Srygley
---------------------------------
James M. Srygley

<PAGE>
SEC Standardized Total Returns

Average Annual Total Return and Total Return for First Investors
Funds are calculated using the following standardized formula:

Average Annual
Total Return = ((ERV DIVIDED BY P)) - 1

Total Return = ((ERV - P) DIVIDED BY P)

WHERE: ERV = Ending redeemable value of a hypothetical
$1,000 investment made at the beginning of
1, 5, or 10 year periods (or fractional
period there of.)

P = a hypothetical initial investment of $1,000

N = number of years

The following table lists the information used to calculate the standardized
average annual total return and total return for First Investors Insured
Multi-State Fund Inc. as of December 31, 1994.

AVE. ANNUAL TOTAL
ERV P N TOTAL RETURN RETURN
--- - - ------------ ------
<S> <C> <C> <C> <C> <C>
Arizona Series
--------------
1 year: $884.90 $1,000.00 1.00 (11.51%) (11.51%)

Life of Fund: $1,230.00 $1,000.00 4.17 5.09% 23.00%

California Series
-----------------
1 year: $880.20 $1,000.00 1.00 (11.98%) (11.98%)

5 years: $1,300.00 $1,000.00 5.00 5.39% 30.00%

Life of Fund: $1,512.70 $1,000.00 7.86 5.41% 51.27%

Colorado Series
---------------
1 year: $883.50 $1,000.00 1.00 (11.65%) (11.65%)

Life of Fund: $1,077.30 $1,000.00 2.67 2.83% 7.73%

Connecticut Series
------------------
1 year: $874.30 $1,000.00 1.00 (12.57%) (12.57%)

Life of Fund: $1,203.00 $1,000.00 4.23 4.46% 20.30%

Florida Series
--------------
1 year: $886.70 $1,000.00 1.00 (11.33%) (11.33%)

Life of Fund: $1,245.20 $1,000.00 4.24 5.31% 24.52%

Georgia Series
--------------
1 year: $893.60 $1,000.00 1.00 (10.64%) (10.64%)

Life of Fund: $1,076.20 $1,000.00 2.67 2.79% 7.62%

Maryland Series
---------------
1 year: $884.80 $1,000.00 1.00 (11.52%) (11.52%)

Life of Fund: $1,227.70 $1,000.00 4.23 4.97% 22.77%

<PAGE>

Massachusetts Series
--------------------
1 year: $887.90 $1,000.00 1.00 (11.21%) (11.21%)

5 years: $1,300.20 $1,000.00 5.00 5.39% 30.02%

Life of Fund: $1,540.40 $1,000.00 7.98 5.56% 54.04%

Michigan Series
---------------
1 year: $877.90 $1,000.00 1.00 (12.21%) (12.21%)

5 years: $1,320.10 $1,000.00 5.00 5.71% 32.01%

Life of Fund: $1,588.80 $1,000.00 7.98 5.97% 58.88%

Minnesota Series
----------------
1 year: $882.20 $1,000.00 1.00 (11.78%) (11.78%)

5 years: $1,267.70 $1,000.00 5.00 4.86% 26.77%

Life of Fund: $1,473.30 $1,000.00 7.98 4.98% 47.33%

Missouri Series
---------------
1 year: $879.70 $1,000.00 1.00 (12.03%) (12.03%)

Life of Fund: $1,062.70 $1,000.00 2.67 2.30% 6.27%

New Jersey Series
-----------------
1 year: $881.40 $1,000.00 1.00 (11.86%) (11.86%)

5 years: $1,306.30 $1,000.00 5.00 5.49% 30.63%

Life of Fund: $1,470.90 $1,000.00 6.30 6.32% 47.09%

North Carolina Series
---------------------
1 year: $876.90 $1,000.00 1.00 (12.31%) (12.31%)

Life of Fund: $1,041.30 $1,000.00 2.67 1.53% 4.13%

Ohio Series
-----------
1 year: $882.30 $1,000.00 1.00 (11.77%) (11.77%)

5 years: $1,310.30 $1,000.00 5.00 5.55% 31.03%

Life of Fund: $1,576.00 $1,000.00 7.98 5.87% 57.60%

Oregon Series
-------------
1 year: $875.10 $1,000.00 1.00 (12.49%) (12.49%)

Life of Fund: $1,034.30 $1,000.00 2.67 1.27% 3.43%

Pennsylvania Series
-------------------
1 year: $878.20 $1,000.00 1.00 (12.18%) (12.18%)

Life of Fund: $1,271.80 $1,000.00 4.67 5.28% 27.18%

Virginia Series
---------------
1 year: $881.80 $1,000.00 1.00 (11.82%) (11.82%)

Life of Fund: $1,266.20 $1,000.00 4.67 5.18% 26.62%
</TABLE>

<PAGE>

Distribution yields for First Investor's Funds are calculated using the
following formula:

Yield = (a/b)

Where:

a = dividends declared during the last 12 months.

b = Net asset value per share on the last day of the period.

The following is a list of the information used to calculate the distribution
yield for the First Investors Multi-State Insured Tax Free Fund as of
December 31, 1994.

Distribution
a b Yield
- - -----
<S> <C> <C> <C>
Arizona Series $.676 $11.71 5.77%
California Series $.620 $10.77 5.76%
Colorado Series $.640 $11.24 5.69%
Connecticut Series $.609 $11.57 5.26%
Florida Series $.646 $11.79 5.48%
Georgia Series $.579 $11.33 5.11%
Maryland Series $.651 $11.77 5.53%
Massachusetts Series $.630 $11.01 5.72%
Michigan Series $.609 $11.47 5.31%
Minnesota Series $.600 $10.48 5.73%
Missouri Series $.613 $11.12 5.51%
New Jersey Series $.661 $12.05 5.49%
North Carolina Series $.594 $10.90 5.45%
Ohio Series $.620 $11.30 5.49%
Oregon Series $.610 $10.87 5.61%
Pennsylvania Series $.630 $11.71 5.38%
Virginia Series $.608 $11.68 5.21%
</TABLE>

<PAGE>

Yields for First Investor's Funds are calculated using the following formula:

2(((((a - b) + ((cd) - e)) -1) - ) - 1)

Where:

a = dividends and interest earned during the 30 day period.

b = expenses accrued for the period (net of reimbursements).

c = the average daily number of shares outstanding during the
period that were entitled to receive dividends.

d = the maximum offering price per share on the last day of the period.

e = undeclared earned income.

The following is a list of the information used to calculate the SEC Yield for
First Investors Insured Multi-State Fund, Inc. as of December 31, 1994.

<TABLE>
<CAPTION>
*Tax
Equivalent
a b c d e Yield Yield
- - - - - ----- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Arizona Series $45,569 $3,524 750,420 $12.49 $.00 5.44% 9.14%
California Series $85,109 $6,805 1,421,185 $11.49 $.00 5.82% 10.22%
Colorado Series $16,485 $497 275,669 $11.99 $.00 5.88% 9.67%
Connecticut Series $78,264 $8,030 1,286,700 $12.34 $.00 5.37% 8.79%
Florida Series $102,658 $12,639 1,669,164 $12.58 $.00 5.20% 8.13%
Georgia Series $9,918 $309 171,129 $12.09 $.00 5.64% 9.38%
Maryland Series $35,747 $2,463 584,872 $12.55 $.00 5.55% 9.23%
Massachusetts Series $114,116 $14,319 1,886,624 $11.74 $.00 5.47% 9.71%
Michigan Series $162,791 $21,521 2,645,451 $12.23 $.00 5.30% 8.68%
Minnesota Series $39,070 $3,858 705,625 $11.18 $.00 5.42% 9.26%
Missouri Series $8,470 $259 145,395 $11.86 $.00 5.78% 9.61%
New Jersey Series $303,989 $43,965 4,583,548 $12.85 $.00 5.36% 8.97%
North Carolina Series $20,173 $629 359,840 $11.63 $.00 5.67% 9.60%
Ohio Series $98,000 $11,192 1,619,030 $12.05 $.00 5.40% 9.12%
Oregon Series $23,696 $741 425,893 $11.59 $.00 5.65% 9.70%
Pennsylvania Series $179,546 $19,230 2,869,348 $12.49 $.00 5.43% 8.73%
Virginia Series $117,090 $12,270 1,902,040 $12.46 $.00 5.37% 8.90%
</TABLE>

* Tax Equivalent Yields were computed assuming a maximum federal tax rate of 36%
as well as the maximum rate for the appropriate state. The formula and
maximum state rates are listed below.

Tax Equivalent Yield = Yield / ((1 - Maximum Federal Rate - Maximum State Rate)
+ (Maximum Federal Rate X Maximum State Rate))

Maximum State Maximum State
Tax Rate Tax Rate
------------- -------------
<S> <C> <C> <C>
Arizona Series 7.00% Minnesota Series 8.50%
California Series 11.00% Missouri Series 6.00%
Colorado Series 5.00% New Jersey Series 7.00%
Connecticut Series 4.50% North Carolina Series 7.75%
Florida Series .00% Ohio Series 6.90%
Georgia Series 6.00% Oregon Series 9.00%
Maryland Series 6.00% Pennsylvania Series 2.80%
Massachusetts Series 12.00% Virginia Series 5.75%
Michigan Series 4.60%
</TABLE>

<PAGE>

NAV Only Total Returns

Average Annual Total Return and Total Return for First Investors Funds are
calculated using the following standardized formula:

Average Annual
Total Return = ((ERV DIVIDED BY P) ) - 1

Total Return = ((ERV - P) DIVIDED BY P)

WHERE: ERV = Ending redeemable value of a hypothetical $1,000 investment
made at the beginning of 1, 5, or 10 year periods (or
fractional period there of.)

P = a hypothetical initial investment of $1,000

N = number of years

The following table lists the information used to calculate the average
annual total return and total return for First Investors Insured Multi-State
Fund Inc. as of December 31, 1994.

AVE. ANNUAL TOTAL
ERV P N TOTAL RETURN RETURN
--- - - ------------ ------
<S> <C> <C> <C> <C> <C>
Arizona Series
--------------
1 year: $943.60 $1,000.00 1.00 (5.64%) (5.64%)

Life of Fund: $1,311.50 $1,000.00 4.17 6.72% 31.15%

California Series
-----------------
1 year: $935.90 $1,000.00 1.00 (6.10%) (6.10%)

5 years: $1,386.40 $1,000.00 5.00 6.75% 38.64%

Life of Fund: $1,613.20 $1,000.00 7.86 6.27% 61.32%

Colorado Series
---------------
1 year: $942.40 $1,000.00 1.00 (5.76%) (5.76%)

Life of Fund: $1,148.60 $1,000.00 2.67 5.33% 14.86%

Connecticut Series
------------------
1 year: $932.60 $1,000.00 1.00 (6.74%) (6.74%)

Life of Fund: $1,282.70 $1,000.00 4.23 6.06% 28.27%

Florida Series
--------------
1 year: $946.10 $1,000.00 1.00 (5.39%) (5.39%)

Life of Fund: $1,327.70 $1,000.00 4.24 6.91% 32.77%

Georgia Series
--------------
1 year: $953.00 $1,000.00 1.00 (4.70%) (4.70%)

Life of Fund: $1,147.20 $1,000.00 2.67 5.28% 14.72%

Maryland Series
---------------
1 year: $944.10 $1,000.00 1.00 (5.59%) (5.59%)

Life of Fund: $1,309.10 $1,000.00 4.23 6.57% 30.91%

<PAGE>

Massachusetts Series
--------------------
1 year: $947.20 $1,000.00 1.00 (5.28%) (5.28%)

5 years: $1,387.40 $1,000.00 5.00 6.77% 38.74%

Life of Fund: $1,642.80 $1,000.00 7.98 6.42% 64.28%

Michigan Series
---------------
1 year: $936.50 $1,000.00 1.00 (6.35%) (6.35%)

5 years: $1,407.80 $1,000.00 5.00 7.08% 40.78%

Life of Fund: $1,694.40 $1,000.00 7.98 6.83% 69.44%

Minnesota Series
----------------
1 year: $940.70 $1,000.00 1.00 (5.93%) (5.93%)

5 years: $1,352.40 $1,000.00 5.00 6.22% 35.24%

Life of Fund: $1,571.30 $1,000.00 7.98 5.83% 57.13%

Missouri Series
---------------
1 year: $938.10 $1,000.00 1.00 (6.19%) (6.19%)

Life of Fund: $1,132.90 $1,000.00 2.67 4.79% 13.29%

New Jersey Series
-----------------
1 year: $940.10 $1,000.00 1.00 (5.99%) (5.99%)

5 years: $1,393.20 $1,000.00 5.00 6.86% 39.32%

Life of Fund: $1,568.70 $1,000.00 6.30 7.41% 56.87%

North Carolina Series
---------------------
1 year: $935.40 $1,000.00 1.00 (6.46%) (6.46%)

Life of Fund: $1,040.10 $1,000.00 2.67 4.01% 11.07%

Ohio Series
-----------
1 year: $940.90 $1,000.00 1.00 (5.91%) (5.91%)

5 years: $1,397.60 $1,000.00 5.00 6.92% 39.76%

Life of Fund: $1,680.80 $1,000.00 7.98 6.73% 68.08%

Oregon Series
-------------
1 year: $933.50 $1,000.00 1.00 (6.65%) (6.65%)

Life of Fund: $1,102.90 $1,000.00 2.67 3.74% 10.29%

Pennsylvania Series
-------------------
1 year: $936.90 $1,000.00 1.00 (6.31%) (6.31%)

Life of Fund: $1,356.00 $1,000.00 4.67 6.73% 35.60%

Virginia Series
---------------
1 year: $940.50 $1,000.00 1.00 (5.95%) (5.95%)

Life of Fund: $1,350.10 $1,000.00 4.67 6.63% 35.01%
</TABLE>

<PAGE>

Distribution yields for First Investor's Funds are calculated using the
following formula:

Yield = (a/b)

Where:

a = dividends declared during the last 12 months.

b = Maximum offering price per share on the last day of the period.

The following is a list of the information used to calculate the distribution
yield for First Investors Multi-State Insured Tax Free Fund as of
December 31, 1994.

Distribution
a b Yield
- - -----
<S> <C> <C> <C>
Arizona Series $.676 $12.49 5.41%
California Series $.620 $11.49 5.40%
Colorado Series $.640 $11.99 5.34%
Connecticut Series $.609 $12.34 4.94%
Florida Series $.646 $12.58 5.14%
Georgia Series $.579 $12.09 4.79%
Maryland Series $.651 $12.55 5.19%
Massachusetts Series $.630 $11.74 5.37%
Michigan Series $.609 $12.23 4.98%
Minnesota Series $.600 $11.18 5.37%
Missouri Series $.613 $11.86 5.17%
New Jersey Series $.661 $12.85 5.14%
North Carolina Series $.594 $11.63 5.11%
Ohio Series $.620 $12.05 5.15%
Oregon Series $.610 $11.59 5.26%
Pennsylvania Series $.630 $12.49 5.04%
Virginia Series $.608 $12.46 4.88%
</TABLE>

<PAGE>
<ARTICLE> 6
<CIK> 0000810371
<NAME> FIRST INVESTORS MULTI-STATE INSURED TAX FREE
<SERIES>
<NUMBER> 9
<NAME> ARIZONA
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-1-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 8662
<INVESTMENTS-AT-VALUE> 8592
<RECEIVABLES> 216
<ASSETS-OTHER> 254
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 9062
<PAYABLE-FOR-SECURITIES> 230
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 29
<TOTAL-LIABILITIES> 259
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 9094
<SHARES-COMMON-STOCK> 752
<SHARES-COMMON-PRIOR> 629
<ACCUMULATED-NII-CURRENT> 8
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (229)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (70)
<NET-ASSETS> 8803
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 507
<OTHER-INCOME> 0
<EXPENSES-NET> (26)
<NET-INVESTMENT-INCOME> 481
<REALIZED-GAINS-CURRENT> (228)
<APPREC-INCREASE-CURRENT> (793)
<NET-CHANGE-FROM-OPS> (540)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (487)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 276
<NUMBER-OF-SHARES-REDEEMED> 175
<SHARES-REINVESTED> 22
<NET-CHANGE-IN-ASSETS> 556
<ACCUMULATED-NII-PRIOR> 15
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 1
<GROSS-ADVISORY-FEES> 66
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 108
<AVERAGE-NET-ASSETS> 8791
<PER-SHARE-NAV-BEGIN> 13.12
<PER-SHARE-NII> .663
<PER-SHARE-GAIN-APPREC> (1.397)
<PER-SHARE-DIVIDEND> .676
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.71
<EXPENSE-RATIO> .3
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<CIK> 0000810371
<NAME> FIRST INVESTORS MULTI-STATE INSURED TAX FREE
<SERIES>
<NUMBER> 5
<NAME> CALIFORNIA
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-1-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 15148
<INVESTMENTS-AT-VALUE> 15109
<RECEIVABLES> 291
<ASSETS-OTHER> 3
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 15403
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 68
<TOTAL-LIABILITIES> 68
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 15367
<SHARES-COMMON-STOCK> 1424
<SHARES-COMMON-PRIOR> 1454
<ACCUMULATED-NII-CURRENT> 16
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (9)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (39)
<NET-ASSETS> 15335
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1017
<OTHER-INCOME> 0
<EXPENSES-NET> (157)
<NET-INVESTMENT-INCOME> 860
<REALIZED-GAINS-CURRENT> (9)
<APPREC-INCREASE-CURRENT> (1905)
<NET-CHANGE-FROM-OPS> (1054)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (892)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 200
<NUMBER-OF-SHARES-REDEEMED> 275
<SHARES-REINVESTED> 45
<NET-CHANGE-IN-ASSETS> (2298)
<ACCUMULATED-NII-PRIOR> 48
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 122
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 198
<AVERAGE-NET-ASSETS> 16295
<PER-SHARE-NAV-BEGIN> 12.12
<PER-SHARE-NII> .598
<PER-SHARE-GAIN-APPREC> (1.328)
<PER-SHARE-DIVIDEND> .62
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.77
<EXPENSE-RATIO> .97
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<CIK> 0000810371
<NAME> FIRST INVESTORS MULTI-STATE INSURED TAX FRE
<SERIES>
<NUMBER> 13
<NAME> COLORADO
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-1-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 3119
<INVESTMENTS-AT-VALUE> 3022
<RECEIVABLES> 44
<ASSETS-OTHER> 51
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3117
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 7
<TOTAL-LIABILITIES> 7
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 3284
<SHARES-COMMON-STOCK> 277
<SHARES-COMMON-PRIOR> 229
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (77)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (97)
<NET-ASSETS> 3110
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 166
<OTHER-INCOME> 0
<EXPENSES-NET> (6)
<NET-INVESTMENT-INCOME> 160
<REALIZED-GAINS-CURRENT> (77)
<APPREC-INCREASE-CURRENT> (260)
<NET-CHANGE-FROM-OPS> (177)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (162)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 88
<NUMBER-OF-SHARES-REDEEMED> 51
<SHARES-REINVESTED> 10
<NET-CHANGE-IN-ASSETS> 223
<ACCUMULATED-NII-PRIOR> 2
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 22
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 42
<AVERAGE-NET-ASSETS> 2968
<PER-SHARE-NAV-BEGIN> 12.6
<PER-SHARE-NII> .631
<PER-SHARE-GAIN-APPREC> (1.351)
<PER-SHARE-DIVIDEND> .64
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.24
<EXPENSE-RATIO> .2
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<CIK> 0000810371
<NAME> FIRST INVESTORS MULTI-STATE INSURED TAX FREE
<SERIES>
<NUMBER> 10
<NAME> CONNECTICUT
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-1-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 14558
<INVESTMENTS-AT-VALUE> 14405
<RECEIVABLES> 408
<ASSETS-OTHER> 67
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 14880
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 32
<TOTAL-LIABILITIES> 32
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 15351
<SHARES-COMMON-STOCK> 1283
<SHARES-COMMON-PRIOR> 1318
<ACCUMULATED-NII-CURRENT> 5
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (355)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (153)
<NET-ASSETS> 14848
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 941
<OTHER-INCOME> 0
<EXPENSES-NET> (139)
<NET-INVESTMENT-INCOME> 802
<REALIZED-GAINS-CURRENT> (314)
<APPREC-INCREASE-CURRENT> (1640)
<NET-CHANGE-FROM-OPS> (1152)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (802)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 203
<NUMBER-OF-SHARES-REDEEMED> 289
<SHARES-REINVESTED> 51
<NET-CHANGE-IN-ASSETS> (2354)
<ACCUMULATED-NII-PRIOR> 6
<ACCUMULATED-GAINS-PRIOR> (41)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 120
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 195
<AVERAGE-NET-ASSETS> 15999
<PER-SHARE-NAV-BEGIN> 13.05
<PER-SHARE-NII> .609
<PER-SHARE-GAIN-APPREC> (1.48)
<PER-SHARE-DIVIDEND> .609
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.57
<EXPENSE-RATIO> .87
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<CIK> 0000810371
<NAME> FIRST INVESTORS MULTI-STATE INSURED TAX FREE
<SERIES>
<NUMBER> 11
<NAME> FLORIDA
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-1-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 19632
<INVESTMENTS-AT-VALUE> 19345
<RECEIVABLES> 532
<ASSETS-OTHER> 13
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 19890
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 125
<TOTAL-LIABILITIES> 125
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 20301
<SHARES-COMMON-STOCK> 1676
<SHARES-COMMON-PRIOR> 1629
<ACCUMULATED-NII-CURRENT> 16
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (265)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (287)
<NET-ASSETS> 19765
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1226
<OTHER-INCOME> 0
<EXPENSES-NET> (129)
<NET-INVESTMENT-INCOME> 1097
<REALIZED-GAINS-CURRENT> (265)
<APPREC-INCREASE-CURRENT> (2040)
<NET-CHANGE-FROM-OPS> (1208)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1103)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 337
<NUMBER-OF-SHARES-REDEEMED> 333
<SHARES-REINVESTED> 42
<NET-CHANGE-IN-ASSETS> (1632)
<ACCUMULATED-NII-PRIOR> 21
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 157
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 248
<AVERAGE-NET-ASSETS> 20950
<PER-SHARE-NAV-BEGIN> 13.14
<PER-SHARE-NII> .642
<PER-SHARE-GAIN-APPREC> (1.346)
<PER-SHARE-DIVIDEND> .646
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.79
<EXPENSE-RATIO> .62
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<CIK> 0000810371
<NAME> FIRST INVESTORS MULTI-STATE INSURED TAX FREE
<SERIES>
<NUMBER> 14
<NAME> GEORGIA
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-1-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 2049
<INVESTMENTS-AT-VALUE> 2014
<RECEIVABLES> 132
<ASSETS-OTHER> 47
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2193
<PAYABLE-FOR-SECURITIES> 97
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 31
<TOTAL-LIABILITIES> 128
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2140
<SHARES-COMMON-STOCK> 182
<SHARES-COMMON-PRIOR> 118
<ACCUMULATED-NII-CURRENT> 1
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (41)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (35)
<NET-ASSETS> 2065
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 84
<OTHER-INCOME> 0
<EXPENSES-NET> (3)
<NET-INVESTMENT-INCOME> 81
<REALIZED-GAINS-CURRENT> (41)
<APPREC-INCREASE-CURRENT> (110)
<NET-CHANGE-FROM-OPS> (70)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (80)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 80
<NUMBER-OF-SHARES-REDEEMED> 22
<SHARES-REINVESTED> 6
<NET-CHANGE-IN-ASSETS> 596
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 12
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 31
<AVERAGE-NET-ASSETS> 1616
<PER-SHARE-NAV-BEGIN> 12.49
<PER-SHARE-NII> .584
<PER-SHARE-GAIN-APPREC> (1.165)
<PER-SHARE-DIVIDEND> .579
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.33
<EXPENSE-RATIO> .2
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<CIK> 0000810371
<NAME> FIRST INVESTORS MULTI-STATE INSURED TAX FREE
<SERIES>
<NUMBER> 12
<NAME> MARYLAND
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-1-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 6768
<INVESTMENTS-AT-VALUE> 6669
<RECEIVABLES> 167
<ASSETS-OTHER> 96
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 6932
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 29
<TOTAL-LIABILITIES> 29
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 7132
<SHARES-COMMON-STOCK> 587
<SHARES-COMMON-PRIOR> 505
<ACCUMULATED-NII-CURRENT> 2
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (132)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (99)
<NET-ASSETS> 6903
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 390
<OTHER-INCOME> 0
<EXPENSES-NET> (31)
<NET-INVESTMENT-INCOME> 359
<REALIZED-GAINS-CURRENT> (115)
<APPREC-INCREASE-CURRENT> (640)
<NET-CHANGE-FROM-OPS> (396)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (392)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 157
<NUMBER-OF-SHARES-REDEEMED> 96
<SHARES-REINVESTED> 21
<NET-CHANGE-IN-ASSETS> 261
<ACCUMULATED-NII-PRIOR> 5
<ACCUMULATED-GAINS-PRIOR> (16)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 51
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 92
<AVERAGE-NET-ASSETS> 6820
<PER-SHARE-NAV-BEGIN> 13.15
<PER-SHARE-NII> .644
<PER-SHARE-GAIN-APPREC> (1.373)
<PER-SHARE-DIVIDEND> .651
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.77
<EXPENSE-RATIO> .45
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<CIK> 0000810371
<NAME> FIRST INVESTORS MULTI-STATE INSURED TAX FREE
<SERIES>
<NUMBER> 1
<NAME> MASSACHUSETTS
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-1-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 19987
<INVESTMENTS-AT-VALUE> 20354
<RECEIVABLES> 488
<ASSETS-OTHER> 77
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 20919
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 81
<TOTAL-LIABILITIES> 81
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 20796
<SHARES-COMMON-STOCK> 1892
<SHARES-COMMON-PRIOR> 1926
<ACCUMULATED-NII-CURRENT> 4
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (329)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (367)
<NET-ASSETS> 20838
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1407
<OTHER-INCOME> 0
<EXPENSES-NET> (209)
<NET-INVESTMENT-INCOME> 1198
<REALIZED-GAINS-CURRENT> (329)
<APPREC-INCREASE-CURRENT> (2098)
<NET-CHANGE-FROM-OPS> (1229)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1204)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 214
<NUMBER-OF-SHARES-REDEEMED> 330
<SHARES-REINVESTED> 82
<NET-CHANGE-IN-ASSETS> (2815)
<ACCUMULATED-NII-PRIOR> 10
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 165
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 264
<AVERAGE-NET-ASSETS> 22001
<PER-SHARE-NAV-BEGIN> 12.28
<PER-SHARE-NII> .627
<PER-SHARE-GAIN-APPREC> (1.267)
<PER-SHARE-DIVIDEND> .63
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.01
<EXPENSE-RATIO> .95
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<CIK> 0000810371
<NAME> FIRST INVESTORS MULTI-STATE INSURED TAX FREE
<SERIES>
<NUMBER> 2
<NAME> MICHIGAN
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-1-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 30064
<INVESTMENTS-AT-VALUE> 30073
<RECEIVABLES> 381
<ASSETS-OTHER> 59
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 30513
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 151
<TOTAL-LIABILITIES> 151
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 30560
<SHARES-COMMON-STOCK> 2648
<SHARES-COMMON-PRIOR> 2350
<ACCUMULATED-NII-CURRENT> 11
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (218)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 9
<NET-ASSETS> 30362
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1829
<OTHER-INCOME> 0
<EXPENSES-NET> (283)
<NET-INVESTMENT-INCOME> 1547
<REALIZED-GAINS-CURRENT> (218)
<APPREC-INCREASE-CURRENT> (3293)
<NET-CHANGE-FROM-OPS> (1964)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1539)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 543
<NUMBER-OF-SHARES-REDEEMED> 326
<SHARES-REINVESTED> 81
<NET-CHANGE-IN-ASSETS> 81
<ACCUMULATED-NII-PRIOR> 4
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 227
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 358
<AVERAGE-NET-ASSETS> 30240
<PER-SHARE-NAV-BEGIN> 12.89
<PER-SHARE-NII> .612
<PER-SHARE-GAIN-APPREC> (1.423)
<PER-SHARE-DIVIDEND> .609
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.47
<EXPENSE-RATIO> .93
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<CIK> 0000810371
<NAME> FIRST INVESTORS MULTI-STATE INSURED TAX FREE
<SERIES>
<NUMBER> 3
<NAME> MINNESOTA
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-1-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 7389
<INVESTMENTS-AT-VALUE> 7154
<RECEIVABLES> 202
<ASSETS-OTHER> 37
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 7393
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 18
<TOTAL-LIABILITIES> 18
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 7693
<SHARES-COMMON-STOCK> 704
<SHARES-COMMON-PRIOR> 690
<ACCUMULATED-NII-CURRENT> 2
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (85)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (235)
<NET-ASSETS> 7375
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 471
<OTHER-INCOME> 0
<EXPENSES-NET> (51)
<NET-INVESTMENT-INCOME> 421
<REALIZED-GAINS-CURRENT> (85)
<APPREC-INCREASE-CURRENT> (828)
<NET-CHANGE-FROM-OPS> (492)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (426)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 71
<NUMBER-OF-SHARES-REDEEMED> 85
<SHARES-REINVESTED> 29
<NET-CHANGE-IN-ASSETS> (744)
<ACCUMULATED-NII-PRIOR> 7
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 58
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 100
<AVERAGE-NET-ASSETS> 7793
<PER-SHARE-NAV-BEGIN> 11.77
<PER-SHARE-NII> .592
<PER-SHARE-GAIN-APPREC> (1.282)
<PER-SHARE-DIVIDEND> .6
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.48
<EXPENSE-RATIO> .65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<CIK> 0000810371
<NAME> FIRST INVESTORS MULTI-STATE INSURED TAX FREE
<SERIES>
<NUMBER> 15
<NAME> MISSOURI
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-1-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 1617
<INVESTMENTS-AT-VALUE> 1567
<RECEIVABLES> 29
<ASSETS-OTHER> 19
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1615
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4
<TOTAL-LIABILITIES> 4
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1737
<SHARES-COMMON-STOCK> 145
<SHARES-COMMON-PRIOR> 123
<ACCUMULATED-NII-CURRENT> 1
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (77)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (50)
<NET-ASSETS> 1611
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 90
<OTHER-INCOME> 0
<EXPENSES-NET> (3)
<NET-INVESTMENT-INCOME> 87
<REALIZED-GAINS-CURRENT> (77)
<APPREC-INCREASE-CURRENT> (115)
<NET-CHANGE-FROM-OPS> (105)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (86)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 39
<NUMBER-OF-SHARES-REDEEMED> 22
<SHARES-REINVESTED> 5
<NET-CHANGE-IN-ASSETS> 71
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 12
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 25
<AVERAGE-NET-ASSETS> 1588
<PER-SHARE-NAV-BEGIN> 12.5
<PER-SHARE-NII> .617
<PER-SHARE-GAIN-APPREC> (1.384)
<PER-SHARE-DIVIDEND> .613
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.12
<EXPENSE-RATIO> .2
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<CIK> 0000810371
<NAME> FIRST INVESTORS MULTI-STATE INSURED TAX FREE
<SERIES>
<NUMBER> 16
<NAME> NORTH CAROLINA
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-1-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 4021
<INVESTMENTS-AT-VALUE> 3763
<RECEIVABLES> 88
<ASSETS-OTHER> 88
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3939
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 67
<TOTAL-LIABILITIES> 67
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 4213
<SHARES-COMMON-STOCK> 355
<SHARES-COMMON-PRIOR> 316
<ACCUMULATED-NII-CURRENT> 1
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (84)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (258)
<NET-ASSETS> 3872
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 236
<OTHER-INCOME> 0
<EXPENSES-NET> (9)
<NET-INVESTMENT-INCOME> 227
<REALIZED-GAINS-CURRENT> (84)
<APPREC-INCREASE-CURRENT> (437)
<NET-CHANGE-FROM-OPS> (294)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (227)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 121
<NUMBER-OF-SHARES-REDEEMED> 94
<SHARES-REINVESTED> 11
<NET-CHANGE-IN-ASSETS> (11)
<ACCUMULATED-NII-PRIOR> 1
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 32
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 62
<AVERAGE-NET-ASSETS> 4343
<PER-SHARE-NAV-BEGIN> 12.28
<PER-SHARE-NII> .594
<PER-SHARE-GAIN-APPREC> (1.38)
<PER-SHARE-DIVIDEND> .594
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.9
<EXPENSE-RATIO> .2
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<CIK> 0000810371
<NAME> FIRST INVESTORS MULTI-STATE INSURED TAX FREE
<SERIES>
<NUMBER> 6
<NAME> NEW JERSEY
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 54113
<INVESTMENTS-AT-VALUE> 54667
<RECEIVABLES> 1942
<ASSETS-OTHER> 471
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 57080
<PAYABLE-FOR-SECURITIES> 1459
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 242
<TOTAL-LIABILITIES> 1701
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 55029
<SHARES-COMMON-STOCK> 4594
<SHARES-COMMON-PRIOR> 4778
<ACCUMULATED-NII-CURRENT> 22
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (226)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 554
<NET-ASSETS> 55379
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 3732
<OTHER-INCOME> 0
<EXPENSES-NET> (595)
<NET-INVESTMENT-INCOME> 3138
<REALIZED-GAINS-CURRENT> (226)
<APPREC-INCREASE-CURRENT> (6767)
<NET-CHANGE-FROM-OPS> (3855)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (3146)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 601
<NUMBER-OF-SHARES-REDEEMED> 951
<SHARES-REINVESTED> 166
<NET-CHANGE-IN-ASSETS> (9179)
<ACCUMULATED-NII-PRIOR> 31
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 451
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 685
<AVERAGE-NET-ASSETS> 60169
<PER-SHARE-NAV-BEGIN> 13.51
<PER-SHARE-NII> .659
<PER-SHARE-GAIN-APPREC> (1.448)
<PER-SHARE-DIVIDEND> .661
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.06
<EXPENSE-RATIO> .99
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<CIK> 0000810371
<NAME> FIRST INVESTORS MULTI-STATE INSURED TAX FREE
<SERIES>
<NUMBER> 4
<NAME> OHIO
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-1-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 18086
<INVESTMENTS-AT-VALUE> 17989
<RECEIVABLES> 248
<ASSETS-OTHER> 15
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 18252
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 83
<TOTAL-LIABILITIES> 83
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 18426
<SHARES-COMMON-STOCK> 1607
<SHARES-COMMON-PRIOR> 1609
<ACCUMULATED-NII-CURRENT> 7
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (167)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (97)
<NET-ASSETS> 18169
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1165
<OTHER-INCOME> 0
<EXPENSES-NET> (164)
<NET-INVESTMENT-INCOME> 1001
<REALIZED-GAINS-CURRENT> (147)
<APPREC-INCREASE-CURRENT> (2065)
<NET-CHANGE-FROM-OPS> (1211)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1013)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 200
<NUMBER-OF-SHARES-REDEEMED> 262
<SHARES-REINVESTED> 60
<NET-CHANGE-IN-ASSETS> (2197)
<ACCUMULATED-NII-PRIOR> 19
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 145
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 232
<AVERAGE-NET-ASSETS> 19308
<PER-SHARE-NAV-BEGIN> 12.66
<PER-SHARE-NII> .613
<PER-SHARE-GAIN-APPREC> (1.353)
<PER-SHARE-DIVIDEND> .62
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.3
<EXPENSE-RATIO> .85
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<CIK> 0000810371
<NAME> FIRST INVESTORS MULTI-STATE INSURED TAX FREE
<SERIES>
<NUMBER> 17
<NAME> OREGON
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-1-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 4584
<INVESTMENTS-AT-VALUE> 4435
<RECEIVABLES> 77
<ASSETS-OTHER> 193
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 4705
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 9
<TOTAL-LIABILITIES> 9
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5060
<SHARES-COMMON-STOCK> 432
<SHARES-COMMON-PRIOR> 305
<ACCUMULATED-NII-CURRENT> 1
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (215)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (150)
<NET-ASSETS> 4696
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 235
<OTHER-INCOME> 0
<EXPENSES-NET> (8)
<NET-INVESTMENT-INCOME> 227
<REALIZED-GAINS-CURRENT> (212)
<APPREC-INCREASE-CURRENT> (289)
<NET-CHANGE-FROM-OPS> (274)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (230)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 160
<NUMBER-OF-SHARES-REDEEMED> 48
<SHARES-REINVESTED> 16
<NET-CHANGE-IN-ASSETS> 950
<ACCUMULATED-NII-PRIOR> 3
<ACCUMULATED-GAINS-PRIOR> (3)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 32
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 59
<AVERAGE-NET-ASSETS> 4232
<PER-SHARE-NAV-BEGIN> 12.29
<PER-SHARE-NII> .529
<PER-SHARE-GAIN-APPREC> (1.339)
<PER-SHARE-DIVIDEND> .610
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.87
<EXPENSE-RATIO> .2
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<CIK> 0000810371
<NAME> FIRST INVESTORS MULTI-STATE INSURED TAX FREE
<SERIES>
<NUMBER> 7
<NAME> PENNSYLVANIA
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-1-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 33500
<INVESTMENTS-AT-VALUE> 32803
<RECEIVABLES> 1662
<ASSETS-OTHER> 75
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 34540
<PAYABLE-FOR-SECURITIES> 672
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 326
<TOTAL-LIABILITIES> 998
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 34302
<SHARES-COMMON-STOCK> 2864
<SHARES-COMMON-PRIOR> 2699
<ACCUMULATED-NII-CURRENT> 9
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (72)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (697)
<NET-ASSETS> 33542
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 2075
<OTHER-INCOME> 0
<EXPENSES-NET> (304)
<NET-INVESTMENT-INCOME> 1771
<REALIZED-GAINS-CURRENT> (72)
<APPREC-INCREASE-CURRENT> (3989)
<NET-CHANGE-FROM-OPS> (2290)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1777)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 458
<NUMBER-OF-SHARES-REDEEMED> 378
<SHARES-REINVESTED> 85
<NET-CHANGE-IN-ASSETS> (1972)
<ACCUMULATED-NII-PRIOR> 16
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 260
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 391
<AVERAGE-NET-ASSETS> 34625
<PER-SHARE-NAV-BEGIN> 13.16
<PER-SHARE-NII> .627
<PER-SHARE-GAIN-APPREC> (1.447)
<PER-SHARE-DIVIDEND> .63
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.71
<EXPENSE-RATIO> .88
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<CIK> 0000810371
<NAME> FIRST INVESTORS MULTI-STATE INSURED TAX FREE
<SERIES>
<NUMBER> 8
<NAME> VIRGINIA
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-1-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 22646
<INVESTMENTS-AT-VALUE> 22164
<RECEIVABLES> 656
<ASSETS-OTHER> 253
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 23073
<PAYABLE-FOR-SECURITIES> 689
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 59
<TOTAL-LIABILITIES> 748
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 22859
<SHARES-COMMON-STOCK> 1911
<SHARES-COMMON-PRIOR> 1890
<ACCUMULATED-NII-CURRENT> 11
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (62)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (483)
<NET-ASSETS> 22325
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1380
<OTHER-INCOME> 0
<EXPENSES-NET> (199)
<NET-INVESTMENT-INCOME> 1181
<REALIZED-GAINS-CURRENT> (62)
<APPREC-INCREASE-CURRENT> (2611)
<NET-CHANGE-FROM-OPS> (1492)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1175)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 266
<NUMBER-OF-SHARES-REDEEMED> 305
<SHARES-REINVESTED> 60
<NET-CHANGE-IN-ASSETS> (2359)
<ACCUMULATED-NII-PRIOR> 6
<ACCUMULATED-GAINS-PRIOR> (1)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 177
<INTEREST-EXPENSE> 1
<GROSS-EXPENSE> 282
<AVERAGE-NET-ASSETS> 23550
<PER-SHARE-NAV-BEGIN> 13.06
<PER-SHARE-NII> .611
<PER-SHARE-GAIN-APPREC> (1.383)
<PER-SHARE-DIVIDEND> .608
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.68
<EXPENSE-RATIO> .85
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>