MUNIYIELD
NEW YORK
INSURED
FUND, INC.
STRATEGIC
Performance
[GRAPHIC OMITTED]
Annual Report
October 31, 2000
<PAGE>
MUNIYIELD NEW YORK INSURED FUND, INC.
The Benefits and Risks of Leveraging
MuniYield New York Insured Fund, Inc. utilizes leveraging to seek to enhance the
yield and net asset value of its Common Stock. However, these objectives cannot
be achieved in all interest rate environments. To leverage, the Fund issues
Preferred Stock, which pays dividends at prevailing short-term interest rates
and invests the proceeds in long-term municipal bonds. The interest earned on
these investments is paid to Common Stock shareholders in the form of dividends,
and the value of these portfolio holdings is reflected in the per share net
asset value of the Fund's Common Stock. However, in order to benefit Common
Stock shareholders, the yield curve must be positively sloped; that is,
short-term interest rates must be lower than long-term interest rates. At the
same time, a period of generally declining interest rates will benefit Common
Stock shareholders. If either of these conditions change, then the risks of
leveraging will begin to outweigh the benefits.
To illustrate these concepts, assume a fund's Common Stock capitalization of
$100 million and the issuance of Preferred Stock for an additional $50 million,
creating a total value of $150 million available for investment in long-term
municipal bonds. If prevailing short-term interest rates are approximately 3%
and long-term interest rates are approximately 6%, the yield curve has a
strongly positive slope. The fund pays dividends on the $50 million of
Preferred Stock based on the lower short-term interest rates. At the same time,
the fund's total portfolio of $150 million earns the income based on long-term
interest rates. Of course, increases in short-term interest rates would reduce
(and even eliminate) the dividends on the Common Stock.
In this case, the dividends paid to Preferred Stock shareholders are
significantly lower than the income earned on the fund's long-term investments,
and therefore the Common Stock shareholders are the beneficiaries of the
incremental yield. However, if short-term interest rates rise, narrowing the
differential between short-term and long-term interest rates, the incremental
yield pickup on the Common Stock will be reduced or eliminated completely. At
the same time, the market value of the fund's Common Stock (that is, its price
as listed on the New York Stock Exchange) may, as a result, decline.
Furthermore, if long-term interest rates rise, the Common Stock's net asset
value will reflect the full decline in the price of the portfolio's investments,
since the value of the fund's Preferred Stock does not fluctuate. In addition to
the decline in net asset value, the market value of the fund's Common Stock may
also decline.
As a part of its investment strategy, the Fund may invest in certain securities
whose potential income return is inversely related to changes in a floating
interest rate ("inverse floaters"). In general, income on inverse floaters will
decrease when short-term interest rates increase and increase when short-term
interest rates decrease. Investments in inverse floaters may be characterized as
derivative securities and may subject the Fund to the risks of reduced or
eliminated interest payments and losses of invested principal. In addition,
inverse floaters have the effect of providing investment leverage and, as a
result, the market value of such securities will generally be more volatile than
that of fixed-rate, tax-exempt securities. To the extent the Fund invests in
inverse floaters, the market value of the Fund's portfolio and the net asset
value of the Fund's shares may also be more volatile than if the Fund did not
invest in these securities.
<PAGE>
MuniYield New York Insured Fund, Inc., October 31, 2000
DEAR SHAREHOLDER
For the year ended October 31, 2000, the Common Stock of MuniYield New York
Insured Fund, Inc. earned $0.773 per share income dividends, which included
earned and unpaid dividends of $0.065. This represents a net annualized yield of
5.62%, based on a month-end per share net asset value of $13.76. Over the same
period, the total investment return on the Fund's Common Stock was +12.79%,
based on a change in per share net asset value from $13.02 to $13.76 and
assuming reinvestment of $0.780 per share income dividends.
For the six-month period ended October 31, 2000, the total investment return on
the Fund's Common Stock was +8.59%, based on a change in per share net asset
value from $13.08 to $13.76, and assuming reinvestment of $0.380 per share
income dividends.
For the six-month period ended October 31, 2000, the Fund's Auction Market
Preferred Stock had average yields as follows: Series A, 4.41%; Series B, 3.88%;
Series C, 4.02%; Series D, 3.98%; and Series E, 4.54%.
The Municipal Market Environment
During the six months ended October 31, 2000, long-term US Treasury bond yields
generally drifted lower. A number of economic indicators, particularly
employment, new home sales and consumer spending, have suggested that US
economic growth, while still strong, has moderated from 1999's robust levels.
Preliminary estimates for third-quarter 2000 US gross domestic product growth
were recently released at 2.7%, well below the first-quarter 2000 rate of 4.8%
and the second-quarter 2000 rate of 5.6%. This decline in economic growth
suggests to some analysts that the Federal Reserve Board has finished raising
interest rates for its current interest rate cycle. The Federal Reserve Board
increased short-term interest rates at its May meeting and has since kept
monetary policy steady at its subsequent meetings. Given the potential for
stable short-term interest rates in the coming months, investor emphasis focused
on the continuing US Treasury debt reduction program and forecasts of sizeable
Federal budgetary surpluses going forward. Many investors have concluded that
there will be a significant future shortage of longer-dated maturity US Treasury
securities. By late August, US Treasury bond yields declined 30 basis points
(0.30%) to 5.66%, their lowest level in more than a year.
However, for the remainder of the period, bond yields were unable to maintain
their earlier gains. Rising oil prices were the major focus behind the decline
in bond prices, as many investors feared that higher oil prices would result in
increased inflationary pressures. Additionally, US corporations issued large
amounts of taxable debt in order to take advantage of the current low interest
rate environment. During the last three months, US corporations issued more than
$100 billion in investment-grade securities, offering yields in the 7.25%-9%
range. Many investors found these taxable issues an attractive and more
plentiful alternative to US Treasury bonds. As the demand for US Treasury issues
weakened, US bond yields rose. Although US Treasury bond yields rose to 5.78% by
the end of October 2000, overall they declined almost 20 basis points during the
last six months.
The six-month period ended October 31, 2000 was one of the few periods in recent
years in which the tax-exempt bond market outperformed its taxable counterpart,
the US Treasury bond market. While municipal bond yields followed the similar
seesaw pattern of Treasury bond yields, tax-exempt bond price volatility was
significantly reduced. Municipal bond yields traded in a relatively narrow range
during much of October 2000. Overall investor demand for municipal bonds
remained strong, allowing tax-exempt bond yields, as measured by the Bond Buyer
Revenue Bond Index, to decline 30 basis points to end the period at 5.75%.
In the past three months, new long-term municipal bond issuance has continued to
decline, albeit at a slower rate than earlier this year. Over this period, more
than $53 billion in new long-term municipal bonds was issued, a decline of 3%
compared to the same three-month period in 1999. During the last six months,
more than $105 billion in tax-exempt bonds was underwritten, a decline of 8%
compared to the same six-month period in 1999. Just under $200 billion in new
municipal securities was marketed during the past year, a decline of more than
16% compared to the same 12-month period in 1999.
The demand for municipal bonds came from a number of non-traditional and
conventional sources. Derivative/arbitrage programs and insurance companies
remained the dominant institutional buyers, while individual retail purchases
also remained strong. Traditional, open-end tax-exempt mutual funds have
continued to see significant disintermediation. It was recently reported that
thus far during the 2000 calendar year, long-term municipal bond mutual funds
experienced net cash outflows of more than $15 billion. Fortunately, the
combination of reduced new bond issuance and ongoing demand from non-traditional
sources has been able to more than offset the decline in demand from tax-exempt
mutual funds. This favorable balance has fostered a significant decline in
municipal bond yields in recent months.
Currently, there is no reason to expect that the positive technical position of
the municipal bond market will significantly deteriorate. The steeply positive
yield curve and the relatively high credit quality that the tax-exempt bond
market offers should continue to attract different classes of institutional
buyers. Strong state and local governmental financial conditions also suggest
that issuance should remain manageable into next year.
However, the results of the presidential election may affect the tax-exempt bond
market. Various tax and spending programs proposed by both candidates have
obvious implications for state and local governments as well as corporate and
individual taxpayers. Political history has shown that the enactment of campaign
promises, both Republican and Democratic, has very often been a long, laborious
process. This suggests that over the next few months US economic factors will
most likely have a greater effect on bond yields than political considerations.
Portfolio Strategy
During the six-month period ended October 31, 2000, we managed the Fund with the
intent of sustaining an appealing level of tax-exempt income. At the end of May,
we believed that the municipal market was approaching a high in yields. In our
opinion, investors had fully discounted any further increases in short-term
interest rates, and we believed that any other increases would serve to slow
economic growth and keep inflation manageable.
The months leading to October brought extreme volatility to the municipal
market. Tax-exempt yields dropped about 40 basis points from the end of May to
the end of October although the average yield change from month to month was
about 13 basis points. This volatility occurred because most investors could not
decide if the Federal Reserve Board was ahead or behind the curve in taming
inflation.
As a result of this volatility, we restructured the Fund with higher coupons
that were not available in a lower interest rate environment. The coupons
increased the income of the Fund and produced a generous yield for shareholders.
It also provided us the opportunity to be in a trading range in which we sought
to enhance the Fund's total return. We focused on maintaining and/or increasing
the amount of earned tax-exempt income, in part to offset the heightened level
of short-term interest rates experienced by our leveraged portfolio. Despite the
Fund's increased cost of borrowing, the leveraging of the portfolio remains an
important income-generating vehicle for the Fund. (For a complete explanation of
the benefits and risks of leveraging, see page 1 of this report to
shareholders.)
Going forward, we will seek to take advantage of any backup in interest rates to
invest the Fund's cash to increase its tax-exempt income and extend its
duration. This should position the Fund to take advantage of anticipated lower
interest rates in the future, as the result of an impending economic slowdown
and a potential easing in the Federal Funds rate.
In Conclusion
We appreciate your ongoing interest in MuniYield New York Insured Fund, Inc.,
and we look forward to serving your investment needs in the months and years
ahead.
Sincerely,
/s/ Terry K. Glenn
Terry K. Glenn
President and Director
/s/ Vincent R. Giordano
Vincent R. Giordano
Senior Vice President
/s/ Roberto Roffo
Roberto Roffo
Vice President and Portfolio Manager
December 4, 2000
2 & 3
<PAGE>
MuniYield New York Insured Fund, Inc., October 31, 2000
SCHEDULE OF INVESTMENTS (in Thousands)
<TABLE>
<CAPTION>
S&P Moody's Face
Ratings Ratings Amount Issue Value
====================================================================================================================================
<S> <C> <C> <C> <C>
STATE
New York--98.5%
NR* Aaa $11,895 Albany County, New York, Airport Authority, Airport Revenue Bonds, Trust Receipts,
AMT, Class R, Series 8, 7.252% due 12/15/2023 (d)(e) $ 12,600
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 8,200 Buffalo and Fort Erie, New York, Public Bridge Authority, Toll Bridge System Revenue
Bonds, 5.75% due 1/01/2025 (b) 8,250
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 1,995 Buffalo, New York, Municipal Water Finance Authority, Water System Revenue Refunding Bonds,
Series B, 5% due 7/01/2026 (f) 1,825
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 4,300 Buffalo, New York, Sewer Authority, Revenue Refunding Bonds, Series F, 6% due 7/01/2013 (f) 4,717
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 1,700 Dutchess County, New York, Resource Recovery Agency Revenue Bonds (Solid Waste
System--Forward), Series A, 5.40% due 1/01/2013 (b) 1,742
------------------------------------------------------------------------------------------------------------------------------------
Huntington, New York, GO, Refunding (a):
NR* Aaa 715 5.50% due 4/15/2010 755
NR* Aaa 485 5.50% due 4/15/2011 511
NR* Aaa 460 5.50% due 4/15/2012 483
NR* Aaa 455 5.50% due 4/15/2013 477
NR* Aaa 450 5.50% due 4/15/2014 470
NR* Aaa 450 5.50% due 4/15/2015 468
------------------------------------------------------------------------------------------------------------------------------------
A1+ VMIG1@ 500 Long Island Power Authority, New York, Electric System Revenue Bonds, VRDN,
Sub-Series 5, 4.55% due 5/01/2033 (c) 500
------------------------------------------------------------------------------------------------------------------------------------
Long Island Power Authority, New York, Electric System Revenue Refunding Bonds, Series A:
AAA Aaa 4,675 5% due 12/01/2015 (e) 4,549
AAA Aaa 16,845 5% due 12/01/2018 (e) 15,887
AAA Aaa 5,000 5.125% due 12/01/2022 (e) 4,713
AAA Aaa 7,500 5.50% due 12/01/2023 (b) 7,375
AAA Aaa 2,350 5.50% due 12/01/2029 (b) 2,287
------------------------------------------------------------------------------------------------------------------------------------
Metropolitan Transportation Authority, New York, Commuter Facilities Revenue Bonds,
Series A:
AAA NR* 7,945 5.50% due 7/01/2014 (f) 8,154
AAA Aaa 2,000 5.75% due 7/01/2021 (b) 2,028
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 17,540 Metropolitan Transportation Authority, New York, Commuter Facilities Revenue
Refunding Bonds, Series B, 4.875% due 7/01/2018 (f) 16,124
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 3,000 Metropolitan Transportation Authority, New York, Dedicated Tax Fund Revenue Bonds,
Series A, 4.75% due 4/01/2028 (f) 2,602
------------------------------------------------------------------------------------------------------------------------------------
Metropolitan Transportation Authority, New York, Transit Facilities Revenue Bonds:
AAA Aaa 2,400 Series A, 6.10% due 7/01/2006 (e)(g) 2,624
AAA Aaa 5,605 Series A, 5.75% due 7/01/2021 (b) 5,696
AAA Aaa 2,500 Series C-1, 5.50% due 7/01/2022 (f) 2,481
------------------------------------------------------------------------------------------------------------------------------------
Metropolitan Transportation Authority, New York, Transit Facilities Revenue Refunding
Bonds:
AAA Aaa 5,000 Series A, 4.75% due 7/01/2024 (b) 4,381
AAA Aaa 350 Series B, 4.75% due 7/01/2026 (f) 305
AAA Aaa 2,500 Series C, 5.125% due 7/01/2013 (e) 2,510
------------------------------------------------------------------------------------------------------------------------------------
Monroe County, New York, IDA Revenue Bonds (Southview Towers Project), AMT:
NR* Aa1 1,400 6.125% due 2/01/2020 1,428
NR* Aa1 1,125 6.25% due 2/01/2031 1,154
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 1,205 Nassau County, New York, GO, Series B, 5.25% due 6/01/2024 (a) 1,149
------------------------------------------------------------------------------------------------------------------------------------
A1+ NR* 3,600 Nassau County, New York, IDA, Civic Facility Revenue Refunding and Improvement Bonds
(Cold Spring Harbor), VRDN, 4.45% due 1/01/2034 (c) 3,600
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 1,630 Nassau Health Care Corporation, New York, Health System Revenue Bonds, 5.75% due
8/01/2029 (e) 1,643
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 2,400 New York City, New York, City Health and Hospital Corporation, Health System Revenue
Refunding Bonds, Series A, 5% due 2/15/2020 (a) 2,226
------------------------------------------------------------------------------------------------------------------------------------
NR* Aaa 5,750 New York City, New York, City IDA, Civic Facility Revenue Bonds (USTA National Tennis
Center), RIB, Series 206, 8.11% due 11/15/2014 (d)(e) 6,571
------------------------------------------------------------------------------------------------------------------------------------
New York City, New York, City Municipal Water Finance Authority, Water and Sewer System
Revenue Bonds:
AAA Aaa 1,050 Series A, 5% due 6/15/2027 (f) 959
AAA Aaa 12,100 Series B, 5.75% due 6/15/2026 (b) 12,198
AAA Aaa 17,200 Series B, 5.75% due 6/15/2029 (b) 17,336
A1+ VMIG1@ 100 VRDN, Series C, 4.55% due 6/15/2023 (c)(f) 100
------------------------------------------------------------------------------------------------------------------------------------
New York City, New York, City Municipal Water Finance Authority, Water and Sewer System
Revenue Refunding Bonds:
AAA Aaa 13,000 Series A, 5.125% due 6/15/2022 (a) 12,215
AAA Aaa 15,000 Series B, 6.50% due 6/15/2031 (b) 16,558
AAA Aaa 1,750 Series D, 4.75% due 6/15/2025 (b) 1,531
AAA Aaa 10,700 Series D, 4.75% due 6/15/2025 (f) 9,363
A1+ VMIG1@ 2,400 VRDN, Series G, 4.55% due 6/15/2024 (c)(f) 2,400
------------------------------------------------------------------------------------------------------------------------------------
New York City, New York, City Transit Authority, Metropolitan Transportation Authority,
Triborough, COP, Series A (a):
AAA Aaa 4,260 5.625% due 1/01/2010 4,521
AAA Aaa 2,020 5.625% due 1/01/2012 2,129
------------------------------------------------------------------------------------------------------------------------------------
New York City, New York, City Transitional Finance Authority Revenue Bonds:
AAA Aaa 5,000 Future Tax Secured, Series C, 5.50% due 5/01/2025 (f) 4,940
NR* Aa2 7,500 RIB, Series 304, 7.89% due 11/15/2017 (d) 8,717
------------------------------------------------------------------------------------------------------------------------------------
New York City, New York, GO:
AAA Aaa 2,500 Series B, 5.75% due 8/01/2013 (b) 2,650
AAA Aaa 3,000 Series E, 5.75% due 5/15/2024 (f) 3,043
A1c VMIG1@ 2,900 VRDN, Series B, Sub-Series B-6, 4.55% due 8/15/2005 (b)(c) 2,900
NR* VMIG1@ 3,000 VRDN, Series B-2, Sub-Series B-5, 4.55% due 8/15/2011 (b)(c) 3,000
A1+ VMIG1@ 6,700 VRDN, Sub-Series A-4, 4.55% due 8/01/2021 (c) 6,700
A1+ VMIG1@ 3,050 VRDN, Sub-Series A-7, 4.70% due 8/01/2020 (c) 3,050
A1+ VMIG1@ 1,500 VRDN, Sub-Series A-10, 4.75% due 8/01/2017 (c) 1,500
A1+ VMIG1@ 1,090 VRDN, Sub-Series B-2, 4.25% due 8/15/2019 (c) 1,090
------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
</TABLE>
Portfolio Abbreviations
To simplify the listings of MuniYield New York Insured Fund, Inc.'s portfolio
holdings in the Schedule of Investments, we have abbreviated the names of many
of the securities according to the list below and at right.
AMT Alternative Minimum Tax (subject to)
COP Certificates of Participation
GO General Obligation Bonds
HFA Housing Finance Agency
IDA Industrial Development Authority
M/F Multi-Family
PCR Pollution Control Revenue Bonds
RIB Residual Interest Bonds
RITR Residual Interest Trust Receipts
VRDN Variable Rate Demand Notes
4 & 5
<PAGE>
MuniYield New York Insured Fund, Inc., October 31, 2000
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<TABLE>
<CAPTION>
S&P Moody's Face
Ratings Ratings Amount Issue Value
====================================================================================================================================
<S> <C> <C> <C> <C>
STATE
New York
(continued)
New York City, New York, GO, Refunding:
AAA Aaa $ 1,000 Series A, 6.375% due 5/15/2013 (f) $ 1,111
AAA NR* 380 Series B, 7% due 2/01/2002 (a)(g) 398
AAA Aaa 2,000 Series B, 7% due 2/01/2017 (a) 2,083
AAA NR* 1,620 Series B, 7% due 2/01/2018 (a) 1,688
AAA Aaa 8,000 Series H, 5.375% due 8/01/2027 (e) 7,745
A1+ VMIG1@ 1,200 VRDN, Sub-Series E-4, 4.70% due 8/01/2022 (c) 1,200
A1+ VMIG1@ 800 VRDN, Sub-Series E-5, 4.70% due 8/01/2009 (c) 800
------------------------------------------------------------------------------------------------------------------------------------
A1+ NR* 4,000 New York City, New York, Housing Development Corporation, M/F Rental Housing
Revenue Bonds (Carnegie Park), VRDN, Series A, 4.20% due 11/15/2019 (c) 4,000
------------------------------------------------------------------------------------------------------------------------------------
A1+ NR* 6,950 New York City, New York, Housing Development Corporation, Residential Mortgage
Revenue Bonds (East 17th Street), VRDN, Series A, 4.55% due 1/01/2023 (c) 6,950
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 14,970 New York City, New York, IDA, Special Facilities Revenue Bonds (Terminal One Group),
AMT, 6.125% due 1/01/2024 (b) 15,452
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 9,660 New York State Dormitory Authority, Hospital Revenue Refunding Bonds
(Montefiore Medical Center), 5.50% due 8/01/2038 (a)(h) 9,375
------------------------------------------------------------------------------------------------------------------------------------
New York State Dormitory Authority, Lease Revenue Bonds (Municipal Health Facilities
Improvement Program):
AAA Aaa 8,500 Series 1, 5% due 1/15/2023 (e) 7,815
AAA Aaa 1,900 Series 1, 4.75% due 1/15/2029 (e) 1,636
AAA Aaa 2,000 Series A, 4.75% due 5/15/2024 (a) 1,753
------------------------------------------------------------------------------------------------------------------------------------
New York State Dormitory Authority Revenue Bonds:
NR* Aaa 1,000 (Brooklyn Hospital Center), 5.10% due 2/01/2019 (a)(h) 944
AAA NR* 2,460 (Champlain Valley Physicians), 5% due 7/01/2017 (i) 2,327
AAA NR* 1,000 (City University System), Consolidated Third Generation, Series 1, 5.75% due
7/01/2013 (e) 1,059
AAA Aaa 4,250 (Eger Health Care and Rehabilitation Center), 6.10% due 8/01/2037 (h) 4,417
AAA Aaa 2,000 (Ithaca College), 5.25% due 7/01/2026 (a) 1,897
A A3 2,340 (Mental Health Services Facilities Improvement), Series B, 6% due 8/15/2016 2,503
AAA Aaa 4,350 (Mental Health Services Facilities Improvement), Series F, 4.50% due 8/15/2028 (a) 3,581
AAA Aaa 1,000 (Mental Health Services), Series B, 6.50% due 2/15/2011 (b) 1,135
A NR* 2,430 (Miriam Osborn Memorial Home), Series B, 6.875% due 7/01/2019 2,687
A NR* 6,110 (Miriam Osborn Memorial Home), Series B, 6.875% due 7/01/2025 6,756
AAA Aaa 4,000 (Mount Sinai School of Medicine), Series A, 5.15% due 7/01/2024 (b) 3,770
AAA Aaa 2,000 (New School Social Research), 5.75% due 7/01/2026 (b) 2,020
AAA Aaa 2,560 (State University Adult Facilities), Series B, 5.75% due 5/15/2016 (e) 2,674
AAA Aaa 1,000 (State University Adult Facilities), Series B, 5.75% due 5/15/2017 (e) 1,038
AAA Aaa 2,000 (State University Educational Facilities), Series B, 5.75% due 5/15/2004 (f)(g) 2,088
AAA Aaa 710 (Upstate Community Colleges), Series A, 6% due 7/01/2015 (e) 762
AAA Aaa 1,070 (Upstate Community Colleges), Series A, 6% due 7/01/2016 (e) 1,143
------------------------------------------------------------------------------------------------------------------------------------
New York State Dormitory Authority, Revenue Refunding Bonds:
AAA Aaa 13,230 (City University System), Consolidated Second Generation, Series A, 6.125% due
7/01/2012 (a) 14,572
AAA NR* 3,250 (City University System--Consolidated), Series A, 5.625% due 7/01/2016 (e) 3,411
AAA Aaa 4,400 (City University System), Series C, 7.50% due 7/01/2010 (f) 5,122
AAA Aaa 1,850 (Fordham University), 5% due 7/01/2028 (b) 1,684
AAA Aaa 2,875 (Hamilton College), 4.75% due 7/01/2018 (b) 2,597
AAA NR* 4,250 (Hospital Mortgage--United Health Services Hospitals), 5.375% due 8/01/2027 (a)(h) 4,097
AAA Aaa 4,405 (Mental Health Services), Series A, 5.75% due 2/15/2027 (b) 4,436
BBB+ Baa1 10,000 (Mount Sinai Health), Series A, 6% due 7/01/2014 10,224
BBB+ Baa1 15,000 (Mount Sinai Health), Series A, 6.625% due 7/01/2018 15,869
AAA Aaa 4,340 (New York and Presbyterian Hospitals), 4.75% due 8/01/2027 (a)(h) 3,758
AAA Aaa 12,145 RITR, Class R, Series 2, 7.52% due 7/01/2011 (a)(d) 14,622
AAA Aaa 8,870 (Saint John's University), 5.25% due 7/01/2025 (b) 8,468
AAA Aaa 2,750 (Saint John's University), 4.75% due 7/01/2028 (b) 2,376
AAA Aaa 5,850 (Saint Joseph's Hospital Health Center), 5.25% due 7/01/2018 (b) 5,666
AAA Aaa 6,000 (Siena College), 5.75% due 7/01/2026 (b) 6,061
AAA Aaa 1,500 (State University Educational Facilities), Series A, 5% due 5/15/2018 (b) 1,416
AAA Aaa 2,000 (State University Educational Facilities), Series A, 4.75% due 5/15/2025 (b) 1,746
------------------------------------------------------------------------------------------------------------------------------------
New York State Energy Research and Development Authority, Facilities Revenue
Refunding Bonds:
AAA Aaa 4,155 (Consolidated Edison Co. of New York), Series A, 6.10% due 8/15/2020 (a) 4,330
NR* Aaa 4,300 Trust Receipts, Class R, Series 12, 7.469% due 8/15/2020 (a)(d) 4,662
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 5,000 New York State Energy Research and Development Authority, Gas Facilities Revenue
Bonds (Brooklyn Union Gas Company), AMT, Series B, 6.75% due 2/01/2024 (b) 5,215
------------------------------------------------------------------------------------------------------------------------------------
A1+ NR* 300 New York State Energy Research and Development Authority, PCR (Niagara Mohawk
Power Corporation Project), AMT, VRDN, Series B, 4.70% due 7/01/2027 (c) 300
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 3,500 New York State Energy Research and Development Authority, PCR, Refunding
(Central Hudson Gas and Electric), Series A, 5.45% due 8/01/2027 (a) 3,424
------------------------------------------------------------------------------------------------------------------------------------
NR* Aa1 5,050 New York State Environmental Facilities Corporation, PCR, Refunding, Trust Receipts,
Class R, Series 9, 6.992% due 6/15/2014 (d) 5,453
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 3,500 New York State Environmental Facilities Corporation, Special Obligation Revenue
Refunding Bonds (Riverbank State Park), 6.25% due 4/01/2012 (a) 3,909
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 2,745 New York State, HFA, Revenue Refunding Bonds, Housing Mortgage Project, Series A,
6.10% due 11/01/2015 (e) 2,828
------------------------------------------------------------------------------------------------------------------------------------
A1+ VMIG1@ 10,000 New York State Local Government Assistance Corporation, VRDN, Series F,
4.05% due 4/01/2025 (c) 10,000
------------------------------------------------------------------------------------------------------------------------------------
New York State Medical Care Facilities Finance Agency Revenue Bonds:
AAA Aaa 2,485 (Brookdale Hospital Medical Center), Series A, 6.85% due 2/15/2005 (g) 2,756
AAA Aaa 5,375 (Health Center Project--Second Mortgage), Series A, 6.375% due 11/15/2019 (a) 5,717
AAA Aaa 1,475 (Mental Health Services), Series A, 6% due 2/15/2005 (b)(g) 1,587
AAA Aaa 25 (Mental Health Services), Series A, 6% due 2/15/2025 (b) 26
AAA Aaa 2,945 (Mental Health Services), Series E, 6.50% due 8/15/2004 (e)(g) 3,205
AAA Aaa 55 (Mental Health Services), Series E, 6.50% due 8/15/2015 (e) 59
------------------------------------------------------------------------------------------------------------------------------------
New York State Medical Care Facilities Finance Agency, Revenue Refunding Bonds
(Hospital & Nursing Homes) (h):
AAA NR* 2,000 Series B, 6.25% due 2/15/2025 2,134
AAA Aaa 15,200 Series C, 6.375% due 8/15/2029 (b) 16,220
------------------------------------------------------------------------------------------------------------------------------------
AAA NR* 20,000 New York State Mortgage Agency, Homeowner Mortgage Revenue Bonds, AMT, Series 90,
6.35% due 10/01/2030 (b) 20,767
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 18,085 New York State Mortgage Agency, Homeowner Mortgage Revenue Refunding Bonds, AMT,
Series 67, 5.80% due 10/01/2028 (b) 18,158
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
6 & 7
<PAGE>
MuniYield New York Insured Fund, Inc., October 31, 2000
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
<TABLE>
<CAPTION>
S&P Moody's Face
Ratings Ratings Amount Issue Value
====================================================================================================================================
<S> <C> <C> <C> <C>
STATE
New York
(concluded)
NR* Aaa $ 5,700 New York State Mortgage Agency Revenue Bonds, AMT, 27th Series, 5.875% due 4/01/2030 $ 5,695
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 11,500 New York State Thruway Authority, General Revenue Refunding Bonds, Series E,
5% due 1/01/2025 (f) 10,549
------------------------------------------------------------------------------------------------------------------------------------
New York State Thruway Authority, Highway and Bridge Trust Fund Revenue Bonds:
AAA Aaa 2,000 Series A, 6.25% due 4/01/2011 (e) 2,222
AAA Aaa 2,800 Series A, 5.125% due 4/01/2016 (f) 2,742
AAA Aaa 5,000 Series B-1, 5.75% due 4/01/2012 (f) 5,335
------------------------------------------------------------------------------------------------------------------------------------
New York State Thruway Authority, Highway and Bridge Trust Fund Revenue
Refunding Bonds, Series B (f):
AAA Aaa 5,660 5% due 4/01/2017 5,409
AAA Aaa 8,840 5% due 4/01/2019 8,312
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 3,500 New York State Thruway Authority, Local Highway and Bridge Service Contract
Revenue Refunding Bonds, 6% due 4/01/2012 (b) 3,761
------------------------------------------------------------------------------------------------------------------------------------
New York State Thruway Authority, Service Contract Revenue Bonds
(Local Highway and Bridges Project):
AAA Aaa 10,000 5.625% due 4/01/2012 (b) 10,533
AAA Aaa 3,000 5.75% due 4/01/2013 (a) 3,181
AAA Aaa 5,000 5.75% due 4/01/2014 (a) 5,272
AAA Aaa 5,000 5.75% due 4/01/2015 (a) 5,243
AAA Aaa 2,000 Series A-2, 5.375% due 4/01/2016 (b) 2,007
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 2,500 New York State Thruway Authority, Service Contract Revenue Refunding Bonds
(Local Highway and Bridges Project), 6% due 4/01/2011 (b) 2,694
------------------------------------------------------------------------------------------------------------------------------------
New York State Urban Development Corporation Revenue Bonds
(Correctional Facilities Service Contract):
AAA NR* 4,000 Series A, 5% due 1/01/2028 (e) 3,646
AAA Aaa 6,520 Series B, 4.75% due 1/01/2018 (a) 5,907
AAA Aaa 5,000 Series B, 4.75% due 1/01/2028 (a) 4,341
------------------------------------------------------------------------------------------------------------------------------------
New York State Urban Development Corporation, Revenue Refunding Bonds
(Correctional Capital Facilities):
AAA Aaa 12,845 5% due 1/01/2020 (b) 12,017
AAA Aaa 4,595 Series A, 6.50% due 1/01/2010 (e) 5,158
AAA Aaa 3,190 Series A, 6.50% due 1/01/2011 (e) 3,616
AAA Aaa 6,500 Series A, 5.25% due 1/01/2021 (e) 6,219
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 5,500 New York State Urban Development Corporation, Revenue Refunding Bonds
(Correctional Facilities Service Contract), 5% due 1/01/2019 (e) 5,174
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 1,000 Niagara Falls, New York, GO (Water Treatment Plant), AMT, 7.25% due 11/01/2010 (b) 1,177
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 2,705 Niagara, New York, Frontier Authority, Airport Revenue Bonds (Buffalo Niagara
International Airport), Series B, 5.50% due 4/01/2019 (b) 2,707
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 1,260 North Country, New York, Development Authority, Solid Waste Management System
Revenue Refunding Bonds, 6% due 5/15/2015 (e) 1,367
------------------------------------------------------------------------------------------------------------------------------------
North Hempstead, New York, GO, Refunding, Series B (f):
AAA Aaa 1,745 6.40% due 4/01/2013 1,979
AAA Aaa 555 6.40% due 4/01/2017 626
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 1,080 Oneida County, New York, GO, Refunding, 5.50% due 3/15/2009 (f) 1,134
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 1,665 Oneida County, New York, IDA, Civic Facilities Revenue Bonds (Mohawk Valley),
Series A, 5.20% due 2/01/2013 (e) 1,674
------------------------------------------------------------------------------------------------------------------------------------
Port Authority of New York and New Jersey, Consolidated Revenue Bonds (f):
AAA Aaa 11,285 116th Series, 4.50% due 10/01/2018 9,898
AAA Aaa 2,180 AMT, 97th Series, 6.50% due 7/15/2019 2,292
AAA Aaa 4,740 AMT, 117th Series, Second Installment, 4.75% due 11/15/2016 4,381
AAA Aaa 5,000 AMT, 119th Series, 5.50% due 9/15/2016 5,022
------------------------------------------------------------------------------------------------------------------------------------
NR* Aaa 4,075 Port Authority of New York and New Jersey, Revenue Bonds, Trust Receipts, AMT, Class R,
Series 10, 7.02% due 1/15/2017 (d)(e) 4,334
------------------------------------------------------------------------------------------------------------------------------------
Port Authority of New York and New Jersey, Special Obligation Revenue Bonds, AMT (b):
NR* Aaa 1,000 (JFK International Air Terminal LLC), RIB, Series 157, 6.89% due 12/01/2022 (d) 1,028
AAA Aaa 3,500 (JFK International Air Terminal Project), Series 6, 5.75% due 12/01/2025 3,534
NR* Aaa 16,865 RIB, Series 243, 7.89% due 12/01/2010 (d) 20,596
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 1,255 Rensselaer County, New York, IDA, Civic Facility Revenue Bonds (Polytech Institute),
Series B, 5.50% due 8/01/2022 (a) 1,245
------------------------------------------------------------------------------------------------------------------------------------
AAAr Aaa 12,085 Suffolk County, New York, IDA, Solid Waste Disposal Facility Revenue Refunding Bonds,
RITR, AMT, Class R, Series 1, 7.54% due 10/01/2010 (a)(d) 14,481
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 5,000 Suffolk County, New York, Water Authority, Waterworks Revenue Bonds, Series A,
5% due 6/01/2022 (a) 4,609
------------------------------------------------------------------------------------------------------------------------------------
NR* Aaa 2,850 Syracuse, New York, COP, Revenue Bonds, RIB, AMT, Series 207, 8.29% due 1/01/2017 (d)(f) 3,049
------------------------------------------------------------------------------------------------------------------------------------
A Baa1 4,000 Triborough Bridge and Tunnel Authority, New York, Revenue Refunding Bonds
(Convention Center Project), Series E, 7.25% due 1/01/2010 4,498
------------------------------------------------------------------------------------------------------------------------------------
Triborough Bridge and Tunnel Authority, New York, Special Obligation Revenue
Refunding Bonds, Series A (b):
AAA Aaa 2,265 5.125% due 1/01/2011 2,305
AAA Aaa 8,555 4.75% due 1/01/2024 7,506
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 2,010 Yonkers, New York, GO, Series A, 5.75% due 10/01/2017 (f) 2,076
====================================================================================================================================
Puerto Rico--0.6%
NR* Aaa 1,250 Puerto Rico Commonwealth, Highway and Transportation Authority, Transportation
Revenue Bonds, Trust Receipts, Class R, Series B, 7.57% due 7/01/2035 (b)(d) 1,351
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 4,000 Puerto Rico Electric Power Authority, Power Revenue Refunding Bonds, Series EE,
4.75% due 7/01/2024 (b) 3,618
====================================================================================================================================
Total Investments (Cost--$773,470)--99.1% 794,387
Other Assets Less Liabilities--0.9% 7,322
--------
Net Assets--100.0% $801,709
========
====================================================================================================================================
</TABLE>
(a) AMBAC Insured.
(b) MBIA Insured.
(c) The interest rate is subject to change periodically based upon prevailing
market rates. The interest rate shown is the rate in effect at October 31,
2000.
(d) The interest rate is subject to change periodically and inversely based
upon prevailing market rates. The interest rate shown is the rate in
effect at October 31, 2000.
(e) FSA Insured.
(f) FGIC Insured.
(g) Prerefunded.
(h) FHA Insured.
(i) Connie Lee Insured.
@ Highest short-term rating by Moody's Investors Service, Inc.
* Not Rated.
Ratings of issues shown have not been audited by Deloitte & Touche LLP.
See Notes to Financial Statements.
8 & 9
<PAGE>
MuniYield New York Insured Fund, Inc., October 31, 2000
STATEMENT OF ASSETS, LIABILITIES AND CAPITAL
<TABLE>
<CAPTION>
As of October 31, 2000
====================================================================================================================
<S> <C> <C> <C>
Assets: Investments, at value (identified cost--$773,469,602) ................... $794,387,031
Cash .................................................................... 99,692
Interest receivable ..................................................... 13,176,403
Prepaid expenses and other assets ....................................... 63,645
------------
Total assets ............................................................ 807,726,771
------------
====================================================================================================================
Liabilities: Payables:
Securities purchased .................................................. $ 4,982,175
Dividends to shareholders ............................................. 461,128
Investment adviser .................................................... 326,410 5,769,713
----------
Accrued expenses and other liabilities .................................. 248,011
------------
Total liabilities ....................................................... 6,017,724
------------
====================================================================================================================
Net Assets: Net assets .............................................................. $801,709,047
============
====================================================================================================================
Capital: Capital Stock (200,000,000 shares authorized):
Preferred Stock, par value $.05 per share (10,360 shares of AMPS*
issued and outstanding at $25,000 per share liquidation preference) ... $259,000,000
Common Stock, par value $.10 per share (39,445,962 shares issued
and outstanding) ...................................................... $ 3,944,596
Paid-in capital in excess of par ........................................ 557,669,466
Undistributed investment income--net .................................... 3,424,381
Accumulated realized capital losses on investments--net ................. (40,408,937)
Accumulated distributions in excess of realized capital gains on
investments--net ........................................................ (2,837,888)
Unrealized appreciation on investments--net ............................. 20,917,429
-----------
Total--Equivalent to $13.76 net asset value per share of Common Stock
(market price--$12.25) .................................................. 542,709,047
------------
Total capital ........................................................... $801,709,047
============
====================================================================================================================
</TABLE>
* Auction Market Preferred Stock.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For the Year Ended October 31, 2000
===========================================================================================================================
<S> <C> <C> <C>
Investment Interest and amortization of premium and discount earned ............. $ 33,814,677
Income:
===========================================================================================================================
Expenses: Investment advisory fees ............................................. $3,005,920
Reorganization expenses .............................................. 601,505
Commission fees ...................................................... 516,146
Transfer agent fees .................................................. 162,271
Accounting services .................................................. 105,008
Professional fees .................................................... 88,806
Directors' fees and expenses ......................................... 47,207
Custodian fees ....................................................... 43,105
Printing and shareholder reports ..................................... 39,868
Listing fees ......................................................... 31,201
Pricing fees ......................................................... 21,091
Other ................................................................ 29,263
----------
Total expenses ....................................................... 4,691,391
----------
Investment income--net ............................................... 29,123,286
----------
===========================================================================================================================
Realized & Realized loss on investments--net .................................... (8,164,684)
Unrealized Gain (Loss) Change in unrealized appreciation/depreciation on investments--net ... 42,515,741
On Investments--Net: ----------
Net Increase in Net Assets Resulting from Operations ................. 63,474,343
==========
===========================================================================================================================
</TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Year Ended
October 31,
------------------------------
Increase (Decrease) in Net Assets: 2000 1999
===================================================================================================================================
<S> <C> <C> <C>
Operations: Investment income--net ...................................................... $ 29,123,286 $ 13,036,798
Realized loss on investments--net ........................................... (8,164,684) (833,436)
Change in unrealized appreciation/depreciation on investments--net .......... 42,515,741 (30,444,256)
------------- -------------
Net increase (decrease) in net assets resulting from operations ............. 63,474,343 (18,240,894)
------------- -------------
===================================================================================================================================
Dividends & Investment income--net:
Distributions to Common Stock .............................................................. (21,433,382) (11,176,190)
Shareholders: Preferred Stock ........................................................... (7,796,516) (1,953,727)
Realized gain on investments--net:
Common Stock .............................................................. -- (5,553,634)
Preferred Stock ........................................................... -- (866,775)
In excess of realized gain on investments--net:
Common Stock .............................................................. -- (2,454,828)
Preferred Stock ........................................................... -- (383,133)
------------- -------------
Net decrease in net assets resulting from dividends and distributions
to shareholders ............................................................. (29,229,898) (22,388,287)
------------- -------------
===================================================================================================================================
Capital Stock Proceeds from issuance of Common Stock resulting from reorganization ........ 344,448,084 --
Transactions: Proceeds from issuance of Preferred Stock resulting from reorganization ..... 174,000,000 --
Value of shares issued to Common Stock shareholders in reinvestment
of dividends and distributions .............................................. 209,815 4,853,434
------------- -------------
Net increase in net assets derived from capital stock transactions .......... 518,657,899 4,853,434
------------- -------------
===================================================================================================================================
Net Assets: Total increase (decrease) in net assets ..................................... 552,902,344 (35,775,747)
Beginning of year ........................................................... 248,806,703 284,582,450
------------- -------------
End of year* ................................................................ $ 801,709,047 $ 248,806,703
============= =============
===================================================================================================================================
*Undistributed investment income--net ........................................ $ 3,424,381 $ 2,929,488
============= =============
===================================================================================================================================
</TABLE>
See Notes to Financial Statements.
10 & 11
<PAGE>
MuniYield New York Insured Fund, Inc., October 31, 2000
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
The following per share data and ratios have been derived
from information provided in the financial statements. For the Year Ended October 31,
-------------------------------------------------
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 1996
=================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of year ..................... $ 13.02 $ 16.26 $ 15.89 $ 15.49 $ 15.64
Operating -------- -------- -------- -------- --------
Performance: Investment income--net ................................. .87 1.03 1.12 1.15 1.15
Realized and unrealized gain (loss) on investments--net .90 (2.47) .61 .48 (.03)
-------- -------- -------- -------- --------
Total from investment operations ....................... 1.77 (1.44) 1.73 1.63 1.12
-------- -------- -------- -------- --------
Less dividends and distributions to Common Stock
shareholders:
Investment income--net ................................ (.78) (.89) (.90) (.91) (.91)
Realized gain on investments--net ..................... -- (.45) (.19) (.07) --
In excess of realized gain on investments--net ........ -- (.20) -- -- (.10)
-------- -------- -------- -------- --------
Total dividends and distributions to Common Stock
shareholders ........................................... (.78) (1.54) (1.09) (.98) (1.01)
-------- -------- -------- -------- --------
Effect of Preferred Stock activity:
Dividends and distributions to Preferred Stock
shareholders:
Investment income--net .............................. (.25) (.16) (.19) (.23) (.23)
Realized gain on investments--net ................... -- (.07) (.08) (.02) --
In excess of realized gain on investments--net ...... -- (.03) -- -- (.03)
-------- -------- -------- -------- --------
Total effect of Preferred Stock activity ............... (.25) (.26) (.27) (.25) (.26)
-------- -------- -------- -------- --------
Net asset value, end of year ........................... $ 13.76 $ 13.02 $ 16.26 $ 15.89 $ 15.49
======== ======== ======== ======== ========
Market price per share, end of year .................... $ 12.25 $12.4375 $16.3125 $ 15.875 $ 14.875
======== ======== ======== ======== ========
=================================================================================================================================
Total Investment Based on market price per share ........................ 5.11% (15.63%) 9.99% 13.79% 10.79%
Return:* ======== ======== ======== ======== ========
Based on net asset value per share ..................... 12.79% (11.40%) 9.53% 9.37% 6.04%
======== ======== ======== ======== ========
=================================================================================================================================
Ratios Based on Total expenses, excluding reorganization expenses** .... 1.01% 1.02% .98% 1.02% 1.02%
Average Net Assets ======== ======== ======== ======== ========
Of Common Stock: Total expenses** ....................................... 1.16% 1.02% .98% 1.02% 1.02%
======== ======== ======== ======== ========
Total investment income--net** ......................... 7.21% 6.96% 7.07% 7.45% 7.46%
======== ======== ======== ======== ========
Amount of dividends to Preferred Stock shareholders .... 1.93% 1.04% 1.21% 1.51% 1.49%
======== ======== ======== ======== ========
Investment income--net, to Common Stock shareholders ... 5.28% 5.92% 5.86% 5.94% 5.97%
======== ======== ======== ======== ========
=================================================================================================================================
Ratios Based on Total expenses, excluding reorganization expenses ...... .68% .71% .68% .70% .70%
Total Average Net ======== ======== ======== ======== ========
Assets:**+ Total expenses ......................................... .78% .71% .68% .70% .70%
======== ======== ======== ======== ========
Total investment income--net ........................... 4.82% 4.79% 4.91% 5.09% 5.11%
======== ======== ======== ======== ========
=================================================================================================================================
Ratios Based on Dividends to Preferred Stock shareholders .............. 3.91% 2.30% 2.77% 3.33% 3.25%
Average Net Assets ======== ======== ======== ======== ========
Of Preferred Stock:
=================================================================================================================================
Supplemental Net assets, net of Preferred Stock, end of year
Data: (in thousands) ......................................... $542,709 $163,807 $199,582 $192,107 $186,611
======== ======== ======== ======== ========
Preferred Stock outstanding, end of year (in thousands) $259,000 $ 85,000 $ 85,000 $ 85,000 $ 85,000
======== ======== ======== ======== ========
Portfolio turnover ..................................... 148.51% 99.71% 89.76% 81.73% 80.59%
======== ======== ======== ======== ========
=================================================================================================================================
Leverage: Asset coverage per $1,000 .............................. $ 3,095 $ 2,927 $ 3,348 $ 3,260 $ 3,195
======== ======== ======== ======== ========
=================================================================================================================================
Dividends Per Share Series A--Investment income--net ....................... $ 980 $ 566 $ 695 $ 826 $ 819
On Preferred Stock ======== ======== ======== ======== ========
Outstanding:++ Series B--Investment income--net ....................... $ 941 $ 583 $ 689 $ 837 $ 807
======== ======== ======== ======== ========
Series C--Investment income--net ....................... $ 661 -- -- -- --
======== ======== ======== ======== ========
Series D--Investment income--net ....................... $ 634 -- -- -- --
======== ======== ======== ======== ========
Series E--Investment income--net ....................... $ 653 -- -- -- --
======== ======== ======== ======== ========
=================================================================================================================================
</TABLE>
* Total investment returns based on market value, which can be significantly
greater or lesser than the net asset value, may result in substantially
different returns. Total investment returns exclude the effects of sales
charges.
** Do not reflect the effect of dividends to Preferred Stock shareholders.
+ Includes Common and Preferred Stock average net assets.
++ The Fund's Preferred Stock was issued on September 16, 1992 (Series A and
Series B) and March 6, 2000 (Series C, Series D and Series E).
See Notes to Financial Statements.
12 & 13
<PAGE>
MuniYield New York Insured Fund, Inc., October 31, 2000
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
MuniYield New York Insured Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940 as a non-diversified, closed-end management
investment company. The Fund's financial statements are prepared in conformity
with accounting principles generally accepted in the United States of America,
which may require the use of management accruals and estimates. The Fund
determines and makes available for publication the net asset value of its Common
Stock on a weekly basis. The Fund's Common Stock is listed on the New York Stock
Exchange under the symbol MYN. The following is a summary of significant
accounting policies followed by the Fund.
(a) Valuation of investments -- Municipal bonds are traded primarily in the
over-the-counter markets and are valued at the most recent bid price or yield
equivalent as obtained by the Fund's pricing service from dealers that make
markets in such securities. Financial futures contracts and options thereon,
which are traded on exchanges, are valued at their closing prices as of the
close of such exchanges. Options written or purchased are valued at the last
sale price in the case of exchange-traded options. In the case of options traded
in the over-the-counter market, valuation is the last asked price (options
written) or the last bid price (options purchased). Securities with remaining
maturities of sixty days or less are valued at amortized cost, which
approximates market value. Securities and assets for which market quotations are
not readily available are valued at their fair value as determined in good faith
by or under the direction of the Board of Directors of the Fund, including
valuations furnished by a pricing service retained by the Fund, which may
utilize a matrix system for valuations. The procedures of the pricing service
and its valuations are reviewed by the officers of the Fund under the general
supervision of the Board of Directors.
(b) Derivative financial instruments -- The Fund may engage in various portfolio
investment strategies to increase or decrease the level of risk to which the
Fund is exposed more quickly and efficiently than transactions in other types of
instruments. Losses may arise due to changes in the value of the contract or if
the counterparty does not perform under the contract.
o Financial futures contracts -- The Fund may purchase or sell financial futures
contracts and options on such futures contracts for the purpose of hedging the
market risk on existing securities or the intended purchase of securities.
Futures contracts are contracts for delayed delivery of securities at a specific
future date and at a specific price or yield. Upon entering into a contract, the
Fund deposits and maintains as collateral such initial margin as required by the
exchange on which the transaction is effected. Pursuant to the contract, the
Fund agrees to receive from or pay to the broker an amount of cash equal to the
daily fluctuation in value of the contract. Such receipts or payments are known
as variation margin and are recorded by the Fund as unrealized gains or losses.
When the contract is closed, the Fund records a realized gain or loss equal to
the difference between the value of the contract at the time it was opened and
the value at the time it was closed.
o Options -- The Fund is authorized to write covered call options and purchase
put options. When the Fund writes an option, an amount equal to the premium
received by the Fund is reflected as an asset and an equivalent liability. The
amount of the liability is subsequently marked to market to reflect the current
market value of the option written.
When a security is purchased or sold through an exercise of an option, the
related premium paid (or received) is added to (or deducted from) the basis of
the security acquired or deducted from (or added to) the proceeds of the
security sold. When an option expires (or the Fund enters into a closing
transaction), the Fund realizes a gain or loss on the option to the extent of
the premiums received or paid (or gain or loss to the extent the cost of the
closing transaction exceeds the premium paid or received).
Written and purchased options are non-income producing investments.
(c) Income taxes -- It is the Fund's policy to comply with the requirements of
the Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to its shareholders.
Therefore, no Federal income tax provision is required.
(d) Security transactions and investment income -- Security transactions are
recorded on the dates the transactions are entered into (the trade dates).
Interest income is recognized on the accrual basis. Discounts and market
premiums are amortized into interest income. Realized gains and losses on
security transactions are determined on the identified cost basis.
(e) Dividends and distributions -- Dividends from net investment income are
declared and paid monthly. Distributions of capital gains are recorded on the
ex-dividend dates. Distributions in excess of realized capital gains are due
primarily to differing tax treatments for futures transactions and post-October
losses.
(f) Reclassification -- Accounting principles generally accepted in the United
States of America require that certain components of net assets be adjusted to
reflect permanent differences between financial and tax reporting. Accordingly,
the current year's permanent book/tax differences of $601,505 have been
reclassified between paid-in capital in excess of par and undistributed net
investment income and $111,340 has been reclassified between accumulated net
realized capital losses and paid-in capital in excess of par. These
reclassifications have no effect on net assets or net asset value per share.
2. Investment Advisory Agreement and Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund Asset
Management, L.P. ("FAM"). The general partner of FAM is Princeton Services, Inc.
("PSI"), an indirect wholly-owned subsidiary of Merrill Lynch & Co., Inc. ("ML &
Co."), which is the limited partner.
FAM is responsible for the management of the Fund's portfolio and provides the
necessary personnel, facilities, equipment and certain other services necessary
to the operations of the Fund. For such services, the Fund pays a monthly fee at
an annual rate of .50% of the Fund's average weekly net assets, including
proceeds from the issuance of Preferred Stock.
Accounting services are provided to the Fund by FAM.
Certain officers and/or directors of the Fund are officers and/or directors of
FAM, PSI, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities, for the
year ended October 31, 2000 were $890,297,107 and $803,272,204, respectively.
Net realized losses for the year ended October 31, 2000 and net unrealized gains
as of October 31, 2000 were as follows:
--------------------------------------------------------------------------------
Realized Unrealized
Losses Gains
--------------------------------------------------------------------------------
Long-term investments ................... $(7,569,653) $20,917,429
Financial futures contracts ............. (595,031) --
----------- -----------
Total ................................... $(8,164,684) $20,917,429
=========== ===========
--------------------------------------------------------------------------------
As of October 31, 2000, net unrealized appreciation for Federal income tax
purposes aggregated $20,519,451, of which $24,918,254 related to appreciated
securities and $4,398,803 related to depreciated securities. The aggregate cost
of investments at October 31, 2000 for Federal income tax purposes was
$773,867,580.
4. Capital Stock Transactions:
The Fund is authorized to issue 200,000,000 shares of capital stock, including
Preferred Stock, par value $.10 per share, all of which were initially
classified as Common Stock. The Board of Directors is authorized, however, to
reclassify any unissued shares of capital stock without approval of the holders
of Common Stock.
Common Stock
Shares issued and outstanding during the year ended October 31, 2000 increased
by 26,844,207 as a result of issuance of Common Stock from reorganization and by
16,328 as a result of dividend reinvestment. Shares issued and outstanding
during the year ended October 31, 1999 increased by 311,133 as a result of
dividend reinvestment.
14 & 15
<PAGE>
MuniYield New York Insured Fund, Inc., October 31, 2000
NOTES TO FINANCIAL STATEMENTS (concluded)
Preferred Stock
Auction Market Preferred Stock ("AMPS") are shares of Preferred Stock of the
Fund, with a par value of $.05 per share and a liquidation preference of $25,000
per share, that entitle their holders to receive cash dividends at an annual
rate that may vary for the successive dividend periods. The yields in effect at
October 31, 2000 were as follows: Series A, 4.12%; Series B, 4.13%; Series C,
3.90%; Series D, 3.40%; and Series E, 4.17%.
Shares issued and outstanding during the year ended October 31, 2000 increased
by 6,960 as a result of issuance of Preferred Stock from reorganization. Shares
issued and outstanding during the year ended October 31, 1999 remained constant.
The Fund pays commissions to certain broker-dealers at the end of each auction
at an annual rate ranging from .25% to .375%, calculated on the proceeds of each
auction. For the year ended October 31, 2000, Merrill Lynch, Pierce, Fenner &
Smith Incorporated, an affiliate of FAM, earned $236,053 as commissions.
5. Capital Loss Carryforward:
At October 31, 2000, the Fund had a net capital loss carryforward of
approximately $41,762,000, of which $3,771,000 expires in 2006, $28,696,000
expires in 2007 and $9,295,000 expires in 2008. This amount will be available to
offset like amounts of any future taxable gains.
6. Reorganization Plan:
On March 6, 2000, the Fund acquired all of the net assets of MuniYield New York
Insured Fund II, Inc. pursuant to a plan of reorganization. The acquisition was
accomplished by a tax-free exchange of 26,668,886 Common Stock shares and 6,960
AMPS shares of MuniYield New York Insured Fund II, Inc. for 26,844,207 Common
Stock shares and 6,960 AMPS shares of the Fund. MuniYield New York Insured Fund
II, Inc.'s net assets on that date of $518,448,084, including $7,644,825 of
unrealized depreciation and $32,132,913 of accumulated net realized capital
losses, were combined with those of the Fund. The aggregate net assets of the
Fund immediately after the acquisition amounted to $765,145,772.
7. Subsequent Event:
On November 8, 2000, the Fund's Board of Directors declared an ordinary income
dividend to Common Stock shareholders in the amount of $.064728 per share,
payable on November 29, 2000 to shareholders of record as of November 20, 2000.
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders of MuniYield New York Insured Fund,
Inc.:
We have audited the accompanying statement of assets, liabilities and capital,
including the schedule of investments, of MuniYield New York Insured Fund, Inc.
as of October 31, 2000, the related statements of operations for the year then
ended and changes in net assets for each of the years in the two-year period
then ended, and the financial highlights for each of the years in the five-year
period then ended. These financial statements and the financial highlights are
the responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and the financial highlights based on our
audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and the 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 at October 31, 2000 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, such financial statements and financial highlights present
fairly, in all material respects, the financial position of MuniYield New York
Insured Fund, Inc. as of October 31, 2000, the results of its operations, the
changes in its net assets, and the financial highlights for the respective
stated periods in conformity with accounting principles generally accepted in
the United States of America.
Deloitte & Touche LLP
Princeton, New Jersey
December 6, 2000
16 & 17
<PAGE>
MuniYield New York Insured Fund, Inc., October 31, 2000
IMPORTANT TAX INFORMATION (unaudited)
All of the net investment income distributions paid by MuniYield New York
Insured Fund, Inc. during its taxable year ended October 31, 2000 qualify as
tax-exempt interest dividends for Federal income tax purposes. Additionally,
there were no capital gains distributions paid by the Fund during the year.
Please retain this information for your records.
MANAGED DIVIDEND POLICY
The Fund's dividend policy is to distribute all or a portion of its net
investment income to its shareholders on a monthly basis. In order to provide
shareholders with a more consistent yield to the current trading price of shares
of Common Stock of the Fund, the Fund may at times pay out less than the entire
amount of net investment income earned in any particular month and may at times
in any month pay out such accumulated but undistributed income in addition to
net investment income earned in that month. As a result, the dividends paid by
the Fund for any particular month may be more or less than the amount of net
investment income earned by the Fund during such month. The Fund's current
accumulated but undistributed net investment income, if any, is disclosed in the
Statement of Assets, Liabilities and Capital, which comprises part of the
Financial Information included in this report.
QUALITY PROFILE (unaudited)
The quality ratings of securities in the Fund as of October 31, 2000 were as
follows:
--------------------------------------------------------------------------------
Percent of
S&P Rating/Moody's Rating Net Assets
--------------------------------------------------------------------------------
AAA/Aaa ................................................ 85.7%
AA/Aa .................................................. 2.1
A/A .................................................... 2.0
BBB/Baa ................................................ 3.3
Other* ................................................. 6.0
--------------------------------------------------------------------------------
* Temporary investments in short-term municipal securities.
OFFICERS AND DIRECTORS
Terry K. Glenn, President and Director
James H. Bodurtha, Director
Herbert I. London, Director
Joseph L. May, Director
Andre F. Perold, Director
Roberta Cooper Ramo, Director
Arthur Zeikel, Director
Vincent R. Giordano, Senior Vice President
Kenneth A. Jacob, Vice President
Donald C. Burke, Vice President and Treasurer
Alice A. Pellegrino, Secretary
Custodian
The Bank of New York
90 Washington Street
New York, NY 10286
Transfer Agents
Common Stock:
The Bank of New York
101 Barclay Street
New York, NY 10286
Preferred Stock:
The Bank of New York
100 Church Street
New York, NY 10286
NYSE Symbol
MYN
18 & 19
<PAGE>
MuniYield New York Insured Fund, Inc. seeks to provide shareholders with as high
a level of current income exempt from Federal, New York State and New York City
income taxes as is consistent with its investment policies and prudent
investment management by investing primarily in a portfolio of long-term
municipal obligations the interest on which, in the opinion of bond counsel to
the issuer, is exempt from Federal, New York State and New York City income
taxes.
This report, including the financial information herein, is transmitted to
shareholders of MuniYield New York Insured Fund, Inc. for their information. It
is not a prospectus. Past performance results shown in this report should not be
considered a representation of future performance. The Fund has leveraged its
Common Stock by issuing Preferred Stock to provide the Common Stock shareholders
with a potentially higher rate of return. Leverage creates risks for Common
Stock shareholders, including the likelihood of greater volatility of net asset
value and market price of shares of the Common Stock, and the risk that
fluctuations in the short-term dividend rates of the Preferred Stock may affect
the yield to Common Stock shareholders. Statements and other information herein
are as dated and are subject to change.
MuniYield New York
Insured Fund, Inc.
Box 9011
Princeton, NJ
08543-9011 #16159--10/00
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