BLACKROCK INSURED MUNICIPAL TERM TRUST INC, N-30D, 1997-03-03

BLACKROCK INSURED MUNICIPAL TERM TRUST INC
N-30D, 1997-03-03

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- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL TERM TRUST INC.
ANNUAL REPORT TO SHAREHOLDERS
REPORT OF INVESTMENT ADVISER
- --------------------------------------------------------------------------------

January 31, 1997

Dear Trust Shareholder:

The domestic fixed income markets over the past twelve months were once again
greatly influenced by interest rate volatility. Significant swings in the pace
of U.S. economic growth influenced the bond market's performance, as every
release of economic data led to market participant speculation regarding the
direction of Federal Reserve monetary policy.

Despite strong growth and rising wage pressures, the Fed's decision not to
raise interest rates at their two most recent policy meetings has markedly
increased the stakes in the bond market. The rationale behind the Fed's decision
not to raise interest rates appears to focus on the benign inflation data
released during the third quarter. Should economic growth slow and inflation
remain benign, the Fed will be proven correct in their inaction and the market
should be expected to rally significantly. On the other hand, signs of a
stronger economy could result in weaker bond prices as the likelihood of a Fed
tightening would increase.

BlackRock maintains a positive view on the bond market. On balance, the
outlook for moderate inflation remains intact, suggesting that further declines
in interest rates are likely. In addition to this favorable fundamental
backdrop, foreign demand for U.S. bonds has increased due to the renewed
attractiveness of the U.S. bond market on a global basis.

This annual report is designed to help you stay informed about your
investment and represents our ongoing commitment to improving our communication
with you. We hope you find this report useful now and in the future. We
appreciate your confidence and look forward to helping you achieve your
long-term investment goals.

Sincerely,

/s/ Laurence D. Fink /s/ Ralph L. Schlosstein
------------------------- ------------------------------
Laurence D. Fink Ralph L. Schlosstein
Chairman President

<PAGE>

January 31, 1997
Dear Shareholder:

We are pleased to present the annual report for The BlackRock Insured
Municipal Term Trust Inc. ("the Trust") for the year ended December 31, 1996. We
would like to take this opportunity to review the Trust's stock price and net
asset value (NAV) performance, summarize developments in the fixed income
markets and discuss recent portfolio management activity.

The Trust is a diversified, actively managed closed-end bond fund whose
shares are traded on the New York Stock Exchange under the symbol "BMT". The
Trust's investment objective is to manage a portfolio of municipal debt
securities that will return $10 per share (an amount equal to the Trust's
initial public offering price) to investors on or about December 31, 2010, while
providing high current income exempt from regular federal income tax. The Trust
seeks to achieve this objective by investing in high credit quality ("AAA" or
insured to "AAA") tax-exempt general obligation and revenue bonds issued by
city, county and state municipalities throughout the United States.

The table below summarizes the changes in the Trust's stock price and net
asset value over the past year:

- ------------------------------------------------------------------------------------------------------------------------------------
12/31/96 12/31/95 CHANGE HIGH LOW
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
STOCK PRICE $10.125 $10.00 1.25% $10.50 $9.875
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE (NAV) $10.87 $11.02 (1.36%) $11.15 $10.44
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

THE FIXED INCOME MARKETS

While 1996 featured several major shifts in sentiment and some
dramatically sharp market moves, the net year-over-year yield changes turned out
to be modest. Yields rose sharply across the Treasury yield curve throughout the
first half of the year in response to data indicating accelerating economic
growth, including a sharp rise in commodity prices, which rekindled inflationary
concerns. The possibility of a stronger economy dampened investor expectations
of continued Federal Reserve easing of monetary policy and initiated whispers of
a potentially more restrictive Fed policy.

Largely softer economic data and continued moderation in the broad
inflation measures during the third and fourth quarters allowed the Fed to leave
short term interest rates unchanged at their most recent policy meetings.
Additionally, a stronger dollar, large foreign buying of U.S. Treasuries and
balanced budget hopes following the November elections also supported the
market. However, Alan Greenspan's mention of "irrational exuberance in the
financial markets" on December 4, 1996 rattled the Treasury market, leading to a
monthlong rise in rates. A resilient housing market and strong consumer
confidence also contributed to the market decline in late December.

Municipal bond performance as measured by the LEHMAN MUNICIPAL BOND INDEX
outpaced that of taxable bonds (represented by the LEHMAN AGGREGATE INDEX),
returning 4.43% versus 3.63% for taxables. This strong performance is the result
of the relative scarcity of new municipal bond issuance combined with increased
retail demand due to the end of "flat tax" reform concerns. In particular, the
third quarter of 1996 witnessed approximately $60 billion in cash (in the form
of

2
<PAGE>

calls, maturities and interest payments) returned to investors and recycled back
into the municipal bond market. As the fourth quarter progressed, however,
retail demand moderated in response to a strengthening stock market and
declining interest rate levels. The municipal market finished 1996 on a strong
note, outperforming taxables during the latter half of November and into
December.

Looking forward, we believe municipal bonds may perform well in early
1997. The "January effect", which refers to the significant amount of cash
returned to individual municipal bond investors in the form of bond calls,
maturities and coupon payments in January, could increase demand for municipals
as this cash is reinvested in the municipal market.

THE TRUST'S PORTFOLIO AND INVESTMENT STRATEGY

The Trust's portfolio is actively managed to diversify exposure to various
sectors, issuers, revenue sources and security types. BlackRock's investment
strategy emphasizes a relative value approach, which allows the Trust to
capitalize upon changing market conditions by rotating municipal sectors,
credits and coupons.

Additionally, the Trust employs leverage to enhance its income by
borrowing at short term municipal rates and investing the proceeds in longer
maturity issues which have higher yields. The degree to which the Trust can
benefit from its use of leverage may affect its ability to pay high monthly
income. The Federal Reserve's decision not to increase short interest rates at
their August and September policy meetings has benefited the Trust, as short
term municipal rates (which determine the Trust's borrowing costs) fell.

The following chart compares the Trust's current and December 31, 1995
asset composition:

- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL TERM TRUST INC.
- --------------------------------------------------------------------------------
SECTOR DECEMBER 31, 1996 DECEMBER 31, 1995
- --------------------------------------------------------------------------------
City, County and State 29% 29%
- --------------------------------------------------------------------------------
Hospital 17% 17%
- --------------------------------------------------------------------------------
Water & Sewer 12% 12%
- --------------------------------------------------------------------------------
Utility/Power 11% 11%
- --------------------------------------------------------------------------------
Tax Revenue 9% 9%
- --------------------------------------------------------------------------------
Lease Revenue 8% 9%
- --------------------------------------------------------------------------------
Miscellaneous Revenue 5% 4%
- --------------------------------------------------------------------------------
Education 4% 4%
- --------------------------------------------------------------------------------
Housing 3% 3%
- --------------------------------------------------------------------------------
Transportation 2% 2%
- --------------------------------------------------------------------------------

<PAGE>

We appreciate your continued confidence and look forward to managing The
BlackRock Insured Municipal Term Trust Inc. in the coming years to realize its
investment objectives. Please feel free to contact the mutual fund specialists
at BlackRock's marketing center at (800) 227-7BFM (7236) if you have any
questions that are not answered in this report. Additionally, you can reach us
via e-mail at [email protected]. Sincerely yours,

/s/ Robert S. Kapito /s/ Kevin Klingert
- ----------------------------------- ---------------------------------------
Robert S. Kapito Kevin Klingert
Vice Chairman and Portfolio Manager Managing Director and Portfolio Manager
BlackRock Financial Management, Inc. BlackRock Financial Management, Inc.

- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL TERM TRUST INC.
- --------------------------------------------------------------------------------
Symbol on New York Stock Exchange: BMT
- --------------------------------------------------------------------------------
Initial Offering Date: February 20, 1992
- --------------------------------------------------------------------------------
Closing Stock Price as of 12/31/96: $10.125
- --------------------------------------------------------------------------------
Net Asset Value as of 12/31/96: $10.87
- --------------------------------------------------------------------------------
Yield on Closing Stock Price as of 12/31/96 ($10.125)1: 6.17%
- --------------------------------------------------------------------------------
Current Monthly Distribution per Common Share2: $0.05208
- --------------------------------------------------------------------------------
Current Annualized Distribution per Common Share2: $0.62496
- --------------------------------------------------------------------------------

- ----------
1Yield on Closing Stock Price is calculated by dividing the current
annualized distribution per share by the closing stock price per share.
2Dividend is not constant and is subject to change.

4
<PAGE>

- --------------------------------------------------------------------------------
The BlackRock Insured Municipal Term Trust Inc.
Portfolio of Investments
December 31, 1996
<TABLE>
<CAPTION>

- ---------------------------------------------------------------------------------------------------------------------------
OPTION
PRINCIPAL CALL
RATING* AMOUNT PROVISIONS** VALUE
(UNAUDITED) (000) DESCRIPTION (UNAUDITED) (NOTE 1)
- ---------------------------------------------------------------------------------------------------------------------------

LONG-TERM INVESTMENTS--144.1%
ALABAMA--1.1%
<S> <C> <C> <C> <C>
AAA $ 3,000 Mobile Cnty., G.O., 6.70%, 2/01/00+, MBIA .............. No Opt. Call $ 3,252,960
----------
ARIZONA--1.6%
AAA 4,180 University of Arizona Med. Ctr. Hosp. Rev.,
6.25%, 7/01/10, MBIA ................................... 7/02 at 102 4,428,083
----------
CALIFORNIA--10.4%
California St., G.0., FGIC,
AAA 4,355 6.80%, 11/01/04+ ..................................... No Opt.Call 5,023,362
AAA 145 6.80%, 11/01/10 ...................................... 11/04 at 102 161,397
AAA 3,400 California St. Pub. Wks., 6.60%, 12/01/02+, AMBAC ...... No Opt.Call 3,828,060
AAA 6,100 Contra Costa Tran. Auth., 6.50%, 3/01/09, FGIC ......... No Opt.Call 6,621,611
AAA 3,500 Eastern Mun. Wtr. Dist., 6.50%, 7/01/09, FGIC .......... 7/01 at 101 3,738,105
AAA 3,065 Los Angeles Cnty. Leasing Corp., 6.05%, 12/01/10, AMBAC No Opt.Call 3,297,634
AAA 3,000 San Francisco Bay Area Rapid Trans., 6.75%, 7/01/09, AMBAC 7/00 at 102 3,245,610
AAA 3,500 Sonoma Cnty. Correct. Fac., C.O.P.,
3.55%++, 11/15/12, AMBAC ............................ No Opt.Call 3,482,080
----------
29,397,859
----------
DISTRICT OF COLUMBIA--1.3%
AAA 3,500 District of Columbia, G.O., Ser. A, 6.875%, 6/01/00+, MBIA No Opt. Call 3,813,705
----------
FLORIDA--9.2%
AAA 10,750 Broward Cnty. Sch. Bd., 6.50%, 7/01/10, AMBAC .......... 7/02 at 102 11,619,998
AAA 12,195 Jacksonville Excise Tax Rev., 6.50%, 10/01/10, AMBAC ... 10/02 at 102 13,307,062
AAA 1,000 Volusia Cnty. Edl. Fac., 6.50%, 10/15/10, CONNIE LEE ... 10/02 at 102 1,080,570
----------
26,007,630
----------
GEORGIA--2.7%
AAA 5,000 Henry Cnty. Hosp. Auth. Rev., 6.375%, 7/01/09, FGIC .... 7/02 at 102 5,396,250
AAA 2,000 Macon-Bibb Cnty. Hosp. Auth. Rev. Georgia Med. Ctr.,
6.75%, 8/01/99+, FGIC ................................ No Opt. Call 2,161,400
----------
7,557,650
----------
Illinois--13.7%
AAA 4,890 Chicago, Res. Mtg. Rev., Zero Coupon, 10/01/09, MBIA ... No Opt.Call 2,023,335
Cook Cnty., G.O., MBIA,
AAA 7,000 6.50%, 11/15/02+ ..................................... No Opt.Call 7,782,950
AAA 4,500 7.00%, 11/01/00+ ..................................... No Opt.Call 4,991,445
AAA 5,000 Cook Cnty., Community Schs., 6.50%, 1/01/02+, FGIC ..... No Opt.Call 5,418,950
AAA 5,000 Illinois Edl. Facs. Auth. Rev., 4.125%++, 7/01/13, FGIC 7/03 at 102 4,927,550
Illinois Hlth. Facs. Auth. Rev., FGIC,
AAA 3,000 Ser. A, 6.75%, 1/01/10 ............................... 1/00 at 102 3,199,140
AAA 1,750 Ser. C, 6.75%, 1/01/10 ............................... 1/00 at 102 1,866,165
AAA 7,980 Kendell Kane & Will Cnty. Sch. Dist.,
6.25%, 9/01/11, FGIC ................................. 9/01 at 100 8,248,367
----------
38,457,902
----------
Indiana--3.1%
AAA 1,340 Columbus Sch. Bd., 6.625%, 7/01/11, AMBAC .............. 7/02 at 102 1,433,679
AAA 3,750 Indiana St. Edl. Facs. Auth., 6.60%, 1/01/11, MBIA ..... 1/02 at 102 4,000,575
AAA 3,000 Monroe Cnty. Hosp. Auth. Rev., Bloomington Hosp.,
6.65%, 5/01/10, MBIA ................................. 5/02 at 101 3,189,930
----------
8,624,184
----------
Louisiana--6.6%
Louisiana St., G.O., Ser. A, AMBAC,
AAA 4,000 6.50%, 5/01/09 ....................................... 5/02 at 102 4,295,240
AAA 10,385 6.50%, 5/01/10 ....................................... 5/02 at 102 11,126,385
AAA 2,905 New Orleans Pub. Impt., G.O., 6.60%, 9/01/02+, FGIC .... No Opt.Call 3,191,085
----------
18,612,710
----------
</TABLE>

See Notes to Financial Statements.

5
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
OPTION
PRINCIPAL CALL
RATING* AMOUNT PROVISIONS** VALUE
(UNAUDITED) (000) DESCRIPTION (UNAUDITED) (NOTE 1)
- ---------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS--16.3%
<S> <C> <C> <C> <C>
AAA $2,100 Boston, G.O., Ser. A, 6.50%, 7/01/12, AMBAC 7/02 at 102 $ 2,265,732
Massachusetts St. Hlth. & Edl. Facs. Auth.,
AAA 2,000 6.50%, 7/01/10, FGIC .......................................... 7/02 at 102 2,158,840
AAA 5,000 6.50%, 7/01/10, MBIA .......................................... 7/02 at 102 5,402,100
AAA 3,250 7.25%, 7/01/10, MBIA .......................................... 7/00 at 102 3,564,470
Massachusetts St. Hsg. Fin. Agcy., FNMA Collateral,
AAA 5,000 Ser. H, 6.75%, 11/15/12 ....................................... 11/03 at 102 5,276,950
AAA 5,500 Residential Dev. A, 6.875%, 11/15/11 .......................... 5/02 at 102 5,904,195
AAA 600 Residential Dev. C, 6.875%, 11/15/11 .......................... 5/02 at 102 644,094
AAA 1,220 Massachusetts St., G.O., 6.75%, 8/01/09, AMBAC ................... 8/01 at 102 1,329,422
AAA 7,865 Massachusetts St., G.O., Ser. C, 6.70%, 11/01/09, FGIC ........... 11/04 at 101 8,825,316
AAA 2,350 Massachusetts St., G.O., Ser. D, 6.00%, 7/01/12, MBIA ............ 7/01 at 100 2,411,829
AAA 7,630 Massachusetts St. Wtr. Res., Ser. B, 6.25%, 11/01/10, MBIA ....... 11/02 at 102 8,161,124
----------
45,944,072
----------
MICHIGAN--4.9%
AAA 2,375 Chippewa Valley Sch., Sch. Bldg. & Site, 6.375%, 5/01/01+, FGIC .. No Opt. Call 2,582,124
Michigan Mun. Bd. Auth. Rev.,
AAA 900 Ser. A, 6.50%, 11/01/12, MBIA ................................. 11/02 at 102 968,832
AAA 2,040 6.45%, 11/01/07, AMBAC ........................................ 11/04 at 102 2,272,805
AAA 2,050 6.65%, 11/01/09, AMBAC ........................................ 11/04 at 102 2,281,916
AAA 2,265 Wayne Cnty. Bldg. Auth. Cap. Impt., Ser. A, 6.00%, 6/01/07, MBIA . 6/06 at 102 2,426,381
AAA 3,000 Western Township Utils. Auth. Sewer Dis. Sys. Rev.,
6.50%, 1/01/10, FSA ........................................... 1/02 at 100 3,160,470
----------
13,692,528
----------
MISSISSIPPI--0.7%
AAA 1,800 Harrison Cnty. Waste Wtr. Mgmt., 6.75%, 2/01/11, FGIC ............ 2/01 at 102 1,928,016
----------

Nevada--7.3%
AAA 4,000 Clark Cnty., G.O., 6.50%, 6/01/02+, AMBAC ........................ No Opt.Call 4,432,400
AAA 5,215 Clark Cnty. Arpt., 6.25%, 6/01/01+, FGIC ......................... No Opt.Call 5,575,565
Clark Cnty. Sch. Dist.,
AAA 4,185 6.75%, 12/15/04+, FGIC ........................................ No Opt.Call 4,762,028
AAA 5,175 7.00%, 6/01/01+, MBIA ......................................... No Opt.Call 5,728,725
----------
20,498,718
----------
NEW JERSEY--0.8%
AAA 2,000 Hudson Cnty. Correct. Fac., C.O.P., 6.50%, 12/01/11, MBIA ........ 6/02 at 101.5 2,154,400
----------
NEW YORK--11.1%
AAA 4,500 New York City, G.O., Ser. B, 6.95%, 8/15/12, MBIA ................ 8/04 at 101 5,038,650
New York St. Env. Fac. Corp. Poll. Ctr. Rev.,
AAA 6,155 6.70%, 5/15/09 ................................................ 11/04 at 102 6,853,039
AAA 4,965 6.80%, 5/15/10 ................................................ 11/04 at 102 5,542,727
New York St. Medicare Facs., AMBAC,
AAA 9,715 6.60%, 8/15/09 ................................................ 2/05 at 102 10,763,346
AAA 2,695 6.625%, 2/15/10 ............................................... 2/05 at 102 2,980,751
----------
31,178,513
----------
OHIO--6.2%
Cleveland Wtrwks. Rev., First Mtg., Ser. F, AMBAC
AAA 6,495 6.50%, 1/01/11 ................................................ 1/02 at 102 7,001,675
AAA 5,505 6.50%, 1/01/02+ ............................................... No Opt. Call 6,093,044
AAA 3,900 Lucas Cnty. Hosp Impt. Rev., St. Vincent Med. Ctr.,
6.50%, 8/15/02+, MBIA ......................................... No Opt. Call 4,267,146
----------
17,361,865
----------
</TABLE>

See Notes to Financial Statements.

6
<PAGE>

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
OPTION
PRINCIPAL CALL
RATING* AMOUNT PROVISIONS** VALUE
(UNAUDITED) (000) DESCRIPTION (UNAUDITED) (NOTE 1)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OKLAHOMA--2.1%
AAA $ 5,725 Oklahoma City Wtr. Utils. Tr. Wtr. & Sewer Rev., MBIA
Ser. B, 6.375%, 7/01/12 ....................................... 7/02 at 100 $ 6,029,685
----------
PENNSYLVANIA--5.3%
AAA 5,000 Dauphin Cnty. Gen. Auth., 6.25%, 7/01/08, MBIA ................ 7/02 at 102 5,349,150
AAA 6,005 Pittsburgh, G.O., Ser. D, 6.00%, 9/01/10, AMBAC ............... 9/02 at 102 6,278,047
AAA 3,000 Pittsburgh Wtr. & Swr., 6.75%, 9/01/01+, FGIC ................. No Opt. Call 3,329,070
----------
14,956,267
----------
Rhode Island--4.8%
AAA 2,390 Rhode Island Clean Wtr. Protn. Fin. Agcy. Wtr. Poll. Ctl.
Rev. Revolving Fd.
Pooled Ln., Issue A, 6.70%, 10/01/10, MBIA .................... 10/02 at 102 2,613,178
AAA 10,000 Rhode Island St. Pub. Bldgs. Auth., St. Pub. Prjs. Rev.,
Ser. A, 6.75%, 2/01/00+, AMBAC ............................. No Opt. Call 10,857,500
----------
13,470,678
----------
SOUTH CAROLINA--8.6%
Piedmont Mun. Pwr. Agcy. Elec. Rev.,
AAA 14,925 6.30%, 1/01/11, MBIA ....................................... 1/03 at 102 15,917,811
AAA 7,900 6.50%, 1/01/11, FGIC ....................................... 1/01 at 102 8,364,757
----------
24,282,568
----------
TEXAS--15.6%
AAA 8,530 Austin Util. Sys. Rev. Comb Ser A., 6.00%, 5/15/10, FGIC ..... 5/00 at 100 9.039,954
AAA 1,580 Dallas Cnty. Road Imp., G.O., 5.625%, 8/15/10 ................ 8/01 at 100 1,604,443
AAA 2,500 Dallas Ft. Worth Regl. Arp. Rev., Ser. A, 7.375%, 11/01/10, FGIC 5/04 at 102 2,900,025
AAA 8,000 El Paso Impt. Auth., G.O., Ser A, 6.375%, 8/15/02+, FGIC ..... No Opt. Call 8,427,680
Harris Cnty., Rfdg., FGIC,
AAA 2,585 Toll Road, Ser. B, Zero Coupon, 8/15/08 .................... No Opt. Call 1,403,629
AAA 6,310 Toll Road Sr. Lien, Ser. A, 6.50%, 8/15/02+ ................ No Opt. Call 6,994,130
AAA 4,775 Toll Road Sr. Lien, Ser. A, 6.50%, 8/15/11 ................. 8/02 at 102 5,143,773
AAA 10,440 Houston Wtr. & Swr. Sys., Ser. C, Zero Coupon, 12/01/10, AMBAC No Opt. Call 4,863,996
AAA 1,840 North Texas Mun. Wtr. Dist., 6.50%, 6/01/09, MBIA ............ 6/03 at 100 1,966,426
AAA 1,500 Texas Mun. Pwr. Agcy. Ref., Ser. A, 6.75%, 9/01/12, AMBAC .... 9/01 at 102 1,617,900
----------
43,961,956
----------
UTAH--1.0%
AAA 1,450 Salt Lake City Mun. Bldg. Lease, 6.15%, 10/01/10, MBIA ....... 10/04 at 101 1,528,155
AAA 3,175 Salt Lake City Wtr. Conservancy, Zero Coupon, 10/01/10, AMBAC No Opt. Call 1,472,978
----------
3,001,133
----------
VIRGINIA--3.6%
Peninsula Port Auth. Hlth. Sys., MBIA,
AAA 6,000 Riverside Hlth. Sys. Prj. A, 6.625%, 7/01/10 ................. 7/02 at 102 6,462,600
AAA 3,380 Riverside Hlth. Sys. Prj. B, 6.625%, 7/01/10 ................. 7/02 at 102 3,645,668
----------
10,108,268
----------
WASHINGTON--5.3%
AAA 4,650 Port of Seattle Rev., 6.60%, 8/01/10, MBIA ................... 8/02 at 102 5,055,759
Washington St. Pub. Pwr. Supply Sys. Rev.,
AAA 12,905 Zero Coupon, 7/01/10, MBIA ................................... No Opt. Call 5,944,817
AAA 3,500 Nuclear Pjr. No. 1, Ser. A, 7.00%, 7/01/00+, FGIC ............ No Opt. Call 3,857,245
----------
14,857,821
----------
</TABLE>

See Notes to Financial Statements.

7
<PAGE>

+This bond is Pre-refunded. See glossary for definition.
++This bond contains embedded caps. See glossary for definition.
*Rating: using the higher of Standard & Poor's, Moody's or Fitch's rating.
**Option call provisions: date (month/year) and prices of the earliest optional
call or redemption. There may be other call provisions at varying prices at
later dates.

- --------------------------------------------------------------------------------
KEY TO ABBREVIATIONS
AMBAC -- American Municipal Bond Assurance Corporation
CONNIE LEE -- College Construction Loan Insurance Association
C.O.P. -- Certificate of Participation
FGIC -- Financial Guaranty Insurance Company
FNMACollateral -- Federal National Mortgage Association
FSA -- Financial Security Assurance, Inc.
G.O.-- General Obligation Bond
MBIA -- Municipal Bond Insurance Association
- --------------------------------------------------------------------------------

See Notes to Financial Statements.

8
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INSURED
MUNICIPAL TERM TRUST INC.
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
December 31, 1996
- --------------------------------------------------------------------------------

ASSETS
Investments, at value (cost $371,227,496)
(Note 1) .................................................. $ 405,721,591
Interest receivable ....................................... 7,574,332
Prepaid assets ............................................ 23,174
-------------
413,319,097
-------------

LIABILITIES
Bank overdraft ............................................ 1,427,164
Dividends payable--preferred stock ........................ 14,070
Dividends payable--common stock ........................... 113,654
Advisory fee payable (Note 2) ............................. 121,995
Administration fee payable (Note 2) ....................... 34,855
Other accrued expenses .................................... 137,227
-------------
1,848,965
-------------
NET INVESTMENT ASSETS ..................................... $ 411,470,132
=============
Net assets were comprised of:
Common stock:
Par value (Note 4) .................................... $ 258,856
Paid-in capital in excess of par ...................... 239,833,688
Preferred stock (Note 4) ................................ 130,000,000
-------------
370,092,544
Undistributed net investment income ..................... 7,206,302
Accumulated net realized loss on investments ............ (322,809)
Net unrealized appreciation on investments .............. 34,494,095
-------------
Net investment assets, December 31, 1996 ................ $ 411,470,132
=============
Net assets applicable to common shareholders ............ $ 281,470,132
=============
Net asset value per share:
($281,470,132 / 25,885,639 shares of
common stock issued and outstanding) ...................... $10.87
======

- --------------------------------------------------------------------------------
THE BLACKROCK INSURED
MUNICIPAL TERM TRUST INC.
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996
- --------------------------------------------------------------------------------

NET INVESTMENT INCOME
Income
Interest and discount earned ............................ $ 24,278,256
------------
Expenses
Investment advisory ..................................... 1,430,206
Administration .......................................... 408,630
Auction agent ........................................... 344,722
Reports to shareholders ................................. 124,298
Custodian ............................................... 112,262
Directors ............................................... 56,000
Audit ................................................... 39,000
Transfer agent .......................................... 33,600
Legal ................................................... 13,869
Miscellaneous ........................................... 157,244
------------
Total expenses .......................................... 2,719,831
------------

Net investment income ..................................... 21,558,425
------------

REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 3)
Net realized gain on investments .......................... 201,117
Net change in unrealized appreciation on:
investments ............................................. (4,792,998)
------------
Net loss on investments ................................... (4,591,881)
------------
NET INCREASE IN NET INVESTMENT
ASSETS RESULTING FROM OPERATIONS .......................... $ 16,966,544
============

See Notes to Financial Statements.

9
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL TERM TRUST INC.
STATEMENT OF CHANGES
IN NET INVESTMENT ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------
1996 1995
----------- -----------
INCREASE (DECREASE) IN NET INVESTMENT ASSETS
<S> <C> <C>
Operations:
Net investment income ............................................. $ 21,558,425 $ 21,760,900
Net realized gain on investments .................................. 201,117 193,262
Net change in unrealized appreciation (depreciation) on investments (4,792,998) 32,691,361
------------- -------------
Net increase in net investment assets resulting from operations ... 16,966,544 54,645,523
------------- -------------
Dividends:
To preferred shareholders from net investment income .............. (4,545,206) (5,097,663)
To common shareholders from net investment income ................. (16,177,316) (16,177,339)
------------- -------------
(20,722,522) (21,275,002)
------------- -------------
Total increase (decrease) ....................................... (3,755,978) 33,370,521
------------- -------------

Net Investment Assets
Beginning of year ................................................... 415,226,110 381,855,589
------------- -------------
End of year ......................................................... $ 411,470,132 $ 415,226,110
============= =============
</TABLE>

See Notes to Financial Statements.

10
<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL TERM TRUST INC.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FEBRUARY 28,
DECEMBER 31, 1992* TO
----------------------------------------------------- DECEMBER 31,
1996 1995 1994 1993 1992
----------- ----------- ---------- --------- --------
PER SHARE OPERATING PERFORMANCE:
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period .................. $ 11.02 $ 9.73 $ 11.18 $ 9.93 $ 9.40
----------- ----------- ---------- --------- --------

Net investment income .............................. .83 .84 .82 .83 .61
Net realized and unrealized gain (loss) on
investments ...................................... (.18) 1.27 (1.48) 1.18 .56
----------- ----------- ---------- --------- --------
Net increase (decrease) from investment operations .... .65 2.11 (.66) 2.01 1.17
----------- ----------- ---------- --------- --------
Dividends from net investment income to:
Preferred shareholders ............................. (.18) (.20) (.14) (.12) (.09)
Common shareholders ................................ (.62) (.62) (.62) (.63) (.42)
Distributions from net realized gain on investments to:
Preferred shareholders ............................. -- -- (.01) (.00)*** --
Common shareholders ................................ -- -- (.02) (.01) --
----------- ----------- ---------- --------- --------
Total dividends and distributions ..................... (.80) (.82) (.79) (.76) (.51)
----------- ----------- ---------- --------- --------
Capital charge with respect to issuance of shares ..... -- -- -- -- (.13)
----------- ----------- ---------- --------- --------
Net asset value, end of period** ...................... $ 10.87 $ 11.02 $ 9.73 $ 11.18 $ 9.93#
=========== =========== ========== ========= ==========
Market value, end of period** ......................... $ 10.125 $ 10.00 $ 8.50 $ 10.50 $ 9.875
=========== =========== ========== ========= ==========
TOTAL INVESTMENT RETURN+ .............................. 7.59% 25.31% (13.38%) 12.99% 9.51%
RATIOSOFAVERAGENETASSETS
OF COMMON SHAREHOLDERS:+++
Expenses .............................................. .97% .96% 1.04% .96% .98%++
Net investment income ................................. 7.66% 7.97% 7.99% 7.75% 7.52%++
SUPPLEMENTAL DATA:
Average net assets of common shareholders (000) ....... $ 281,521 $ 272,868 $ 265,851 $ 275,162 $ 247,807
Portfolio turnover .................................... 1% 1% 31% 1% 37%
Net assets of common shareholders,
end of period (000) ................................ $ 281,470 $ 285,226 $ 251,856 $ 289,449 $ 256,956
Asset coverage per share of preferred stock,
end of period## .................................... $ 79,129 $ 79,851 $ 146,868 $ 161,327 $ 148,829
Preferred stock outstanding (000) ..................... $ 130,000 $ 130,000 $ 130,000 $ 130,000 $ 130,000
</TABLE>

- ----------
* Commencement of investment operations.
** NAV and market value are published in The Wall Street Journal on Monday.
*** Actual amount paid to preferred shareholders was $0.0013 per common share.
# Net asset value immediately after the closing of the initial public
offering was $9.38. ## A stock split occurred on July 24, 1995 (Note 4).
+ Total investment return is calculated assuming a purchase of common stock
at the current market value on the first day and a sale at the current
market price on the last day of each period reported. Dividends and
distributions, if any, are assumed for purposes of this calculation, to be
reinvested at prices obtained under the Trust's dividend reinvestment plan.
Total investment returns do not reflect brokerage commissions. Total
investment returns for periods of less than one full year are not
annualized.
++ Annualized.
+++ Ratios calculated on the basis of income and expenses applicable to both
the common and preferred shares relative to the average net assets of
common shareholders. Ratios do not reflect the effect of dividend payments
to preferred shareholders.

The information above represents the audited operating performance data for a
share of common stock outstanding, total investment return, ratios to average
net assets and other supplemental data, for each of the periods indicated. This
information has been determined based upon financial information provided in the
financial statements and market value data for the Trust's common stock.

See Notes to Financial Statements.

<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL TERM TRUST INC.
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 1. ACCOUNTING The BlackRock Insured Municipal Term Trust Inc. (the
POLICIES "Trust"), a Maryland Corporation is a diversified,
closed-end management investment company. The
Trust's investment objective is to manage a portfolio of investment grade fixed
income securities that will return $10 per share to investors on or about
December 31, 2010 while providing current income exempt from regular Federal
income tax. The ability of issuers of debt securities held by the Trust to meet
their obligations may be affected by economic developments in a specific state,
industry or region. No assurance can be given that the Trust's investment
objective will be achieved.

The following is a summary of significant accounting policies followed by
the Trust:

SECURITIES VALUATION: Municipal securities (including commitments to purchase
such securities on a "when-issued" basis) are valued on the basis of prices
provided by a pricing service which uses information with respect to
transactions in bonds, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities in
determining values. Any securities or other assets for which such current market
quotations are not readily available are valued at fair value as determined in
good faith under procedures established by and under the general supervision and
responsibility of the Trust's Board of Directors.

Short-term securities which mature in more than 60 days are valued at
current market quotations. Short-term securities which mature in 60 days or less
are valued at amortized cost if their term to maturity from date of purchase is
60 days or less, or by amortizing their value on the 61st day prior to maturity
if their original term to maturity from date of purchase exceeded 60 days.

SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on the trade date. Realized gains and losses are calculated on the
identified cost basis. Interest income is recorded on the accrual basis and the
Trust amortizes premium and accretes original issue discount on securities
purchased using the interest method.

FEDERAL INCOME TAXES: It is the Trust's intention to continue to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute sufficient net income to shareholders. For this
reason and because substantially all of the Trust's gross income consists of
tax-exempt interest, no federal tax provision is required.

DIVIDENDS AND DISTRIBUTIONS: The Trust declares and pays dividends and
distributions to common shareholders monthly from net investment income. Net
capital gains, if any, in excess of loss carryforwards may be distributed
annually. Dividends and distributions are recorded on the ex-dividend date.
Dividends and distributions to preferred shareholders are accrued and determined
as described in Note 4.

DEFERRED ORGANIZATION EXPENSES: A total of $70,000 was incurred in connection
with the organization of the Trust. These costs have been deferred and are being
amortized ratably over a period of sixty months from the date the Trust
commenced investment operations.

ESTIMATES: The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

NOTE 2. AGREEMENTS The Trust has an Investment Advisory Agreement with
BlackRock Financial Management Inc. (the "Adviser"),
a wholly-owned corporate subsidiary of PNC Asset Management Group, Inc., the
holding company for PNC's asset management businesses and an Administration
Agreement with Mitchell Hutchins Asset Management Inc. (the "Administrator"), a
wholly-owned subsidiary of Paine-Webber Incorporated.

The investment advisory fee paid to the Adviser is computed weekly and
payable monthly at an annual rate of 0.35% of the Trust's average weekly net
investment assets. The administration fee paid to the Administrator is also
computed weekly and payable monthly at an annual rate of 0.10% of the Trust's
average weekly net investment assets.

Pursuant to the agreements, the Adviser provides continuous supervision of
the investment portfolio and pays the compensation of officers of the Trust who
are affiliated persons of the Adviser.The Administrator pays occupancy and
certain clerical and accounting costs of the Trust. The Trust bears all other
costs and expenses.

12
<PAGE>

NOTE 3. PORTFOLIO Purchases and sales of investment securities, other
SECURITIES than short-term investments, for the year ended
December 31, 1996 aggregated $31,519,429 and
$5,347,467, respectively.

The federal income tax basis of the Trust's investments at December 31,
1996 was substantially the same as the basis for financial reporting and,
accordingly, net unrealized appreciation for federal income tax purposes was
$34,494,095; (gross unrealized appreciation--$34,580,209; gross unrealized
depreciation--$86,114).

For federal income tax purposes, the Trust had a capital loss carryforward
at December 31, 1996 of $322,809 which expires in 2003. Accordingly, no capital
gain distribution is expected to be paid to shareholders until net gains have
been realized in excess of such amount.

NOTE 4. CAPITAL There are 200 million shares of $.01 par value
common stock authorized. Of the 25,885,639 common
shares outstanding at December 31, 1996, the Adviser owned 10,639 shares. As of
December 31, 1996 there were 5,200 preferred shares outstanding as follows:
2,600 shares of Series M-7 and M-28, respectively.

The Trust may classify or reclassify any unissued shares of common stock
into one or more series of preferred stock. On April 27, 1992 the Trust
reclassified 2,600 shares of common stock and issued two series of Auction
Market Preferred Stock ("Preferred Stock") as follows: Series M7--1,300 shares
and Series M28--1,300 shares. The Preferred Stock has a liquidation value of
$25,000 per share plus any accumulated but unpaid dividends.

On May 16, 1995 shareholders approved a proposal to split each share of
the Trust's Auction Rate Municipal Preferred Stock into two shares and
simultaneously reduce each share's liquidation preference from $50,000 to
$25,000 plus any accumulated but unpaid dividends. The stock split occurred on
July 24, 1995.

Dividends on Series M7 are cumulative at a rate which is reset every 7
days based on the results of an auction. Dividends on Series M28 are also
cumulative at a rate which is reset every 28 days based on the results of an
auction.
Dividend rates ranged from 3.00% to 4.25% for the year ended December 31, 1996.

The Trust may not declare dividends or make other distributions on shares of
common stock or purchase any such shares if, at the time of the declaration,
distribution or purchase, asset coverage with respect to the outstanding
Preferred Stock would be less than 200%.

The preferred stock is redeemable at the option of the Trust, in whole or in
part, on any dividend payment date at $25,000 per share plus any accumulated or
unpaid dividends whether or not declared. The Preferred Stock is also subject to
mandatory redemption at $25,000 per share plus any accumulated or unpaid
dividends, whether or not declared, if certain requirements relating to the
composition of the assets and liabilities of the Trust as set forth in the
Articles of Incorporation are not satisfied.

The holders of Preferred Stock have voting rights equal to the holders of
common stock (one vote per share) and will vote together with holders of shares
of common stock as a single class. However, holders of Preferred Stock are also
entitled to elect two of the Trust's directors. In addition, the Investment
Company Act of 1940 requires that along with approval by shareholders that might
otherwise be required, the approval of the holders of a majority of any
outstanding preferred shares, voting separately as a class would be required to
(a) adopt any plan of reorganization that would adversely affect the preferred
shares, and (b) take any action requiring a vote of security holders including,
among other things, changes in the Trust's subclassification as a closed-end
investment company or changes in its fundamental investment restrictions.

NOTE 5. DIVIDENDS Subsequent to December 31,1996, the Board of
Directors of the Trust declared dividends from
undistributed earnings of $0.05208 per common share payable January 31, 1997 to
shareholders of record on January 15, 1997.

For the period January 1, 1997 through January 31, 1997, dividends
declared on preferred shares totalled $342,966 in aggregate for the two
outstanding preferred share series.

13
<PAGE>
NOTE 6. QUARTERLY DATA
(UNAUDITED)

<TABLE>
<CAPTION>
NET INCREASE
NET REALIZED AND (DECREASE) IN
UNREALIZED NET INVESTMENT
NET INVESTMENT GAIN (LOSS) ON ASSETS RESULTING
INCOME INVESTMENTS FROM OPERATIONS
PER PER PER
QUARTERLY TOTAL COMMON COMMON COMMON
PERIOD INCOME AMOUNT SHARE AMOUNT SHARE AMOUNT SHARE
- ------------------ ---------- ------------------ -------------------- ------------------
January 1, 1995 to
<S> <C> <C> <C> <C> <C> <C> <C>
March 31, 1995 $5,951,229 $5,304,114 $.21 $17,918,947 $.69 $23,223,061 $.90
April 1, 1995 to
June 30, 1995 6,097,923 5,466,704 .21 2,868,078 .11 8,334,782 .32
July 1, 1995 to
September 30, 1995 6,259,025 5,584,367 .21 3,702,483 .15 9,286,850 .36
October 1, 1995 to
December 31, 1995 6,066,683 5,405,715 .21 8,395,115 .32 13,800,830 .53
January 1, 1996 to
March 31, 1996 6,073,137 5,391,081 .21 (7,406,995) (.29) (2,015,914) (.08)
April 1, 1996 to
June 30, 1996 6,062,975 5,393,428 .21 (3,268,138) (.13) 2,125,290 .08
July 1, 1996 to
September 30, 1996 6,070,085 5,386,640 .20 2,664,078 .11 8,050,718 .31
October 1, 1996 to
December 31, 1996 6,072,059 5,387,276 .21 3,419,174 .13 8,806,450 .34
</TABLE>

DIVIDENDS
COMMON SHARES PREFERRED SHARES*
PERIOD
PER PER SHARE PRICE OF END
QUARTERLY COMMON COMMON COMMON STOCK NET ASSET
PERIOD AMOUNT SHARE AMOUNT SHARE HIGH LOW VALUE
- ------------------ ----------------- ----------------- ------------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
January 1, 1995 to
March 31, 1995 $4,044,313 $.15 $1,292,588 $.05 $9 3/4 $8 1/2 $10.42
April 1, 1995 to
June 30, 1995 4,044,346 .16 1,314,322 .05 10 9 1/2 10.54
July 1, 1995 to
September 30, 1995 4,044,342 .16 1,227,277 .05 10 1/8 9 1/2 10
October 1, 1995 to
December 31, 1995 4,044,338 .15 1,263,476 .05 10 3/8 9 3/4 11.02
January 1, 1996 to
March 31, 1996 4,044,335 .16 1,156,524 .04 10 3/8 10 10.74
April 1, 1996 to
June 30, 1996 4,044,331 .15 1,158,865 .05 10 1/4 9 7/8 10.62
July 1, 1996 to
September 30, 1996 4,044,327 .16 1,117,995 .05 10 1/4 9 7/8 10.73
October 1, 1996 to
December 31, 1996 4,044,323 .15 1,111,822 .04 10 1/2 10 1/4 10.87
</TABLE>

* For the year ended December 31, 1996, the average annualized rate paid to
preferred shareholders was 3.51%.

14
<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL TERM TRUST INC.
REPORT OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------

The Shareholders and Board of Directors of
The BlackRock Insured Municipal Term Trust Inc.:

We have audited the accompanying statement of assets and liabilities of The
BlackRock Insured Municipal Term Trust Inc., including the portfolio of
investments, as of December 31, 1996, and the related statements of operations
for the year then ended, and of changes in net investment assets for each of the
two years in the period then ended, and the financial highlights for each of the
four years in the period then ended and for the period February 28, 1992
(commencement of investment operations) to December 31, 1992. These financial
statements and financial highlights are the responsibility of the Trust's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at December
31, 1996, by correspondence with the custodian and brokers; where replies were
not received from brokers, we performed other auditing procedures. 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 The BlackRock
Insured Municipal Term Trust Inc. as of December 31, 1996, and the results of
its operations, the changes in its net investment assets and the financial
highlights for the respective stated periods, in conformity with generally
accepted accounting principles.

/s/ DeLoitte & Touche, LLP
- --------------------------
DeLoitte & Touche, LLP

New York, New York
February 3, 1997

15
<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL TERM TRUST INC.
TAX INFORMATION
- --------------------------------------------------------------------------------

We are required by the Internal Revenue Code to advise you within 60 days
of the Trust's fiscal year end (December 31, 1996) as to the federally
tax-exempt interest dividends received by you during such fiscal year.
Accordingly, we are advising you that all dividends paid by the Trust during the
fiscal year were federally tax-exempt interest dividends.

- --------------------------------------------------------------------------------
DIVIDEND REINVESTMENT PLAN
- --------------------------------------------------------------------------------

Pursuant to the Trust's Dividend Reinvestment Plan (the "Plan"),
shareholders may elect to have all distributions of dividends and capital gains
automatically reinvested by State Street Bank and Trust Company (the "Plan
Agent") in Trust shares pursuant to the Plan. Shareholders who do not
participate in the Plan will receive all distributions in cash paid by check in
United States dollars mailed directly to the shareholders of record (or if the
shares are held in street or other nominee name, then to the nominee) by the
Custodian, as dividend disbursing agent.

The Plan Agent serves as agent for the shareholders in administering the
Plan. After the Trust declares a dividend or determines to make a capital gain
distribution, the Plan Agent will, as agent for the participants, receive the
cash payment and use it to buy Trust shares in the open market on the New York
Stock Exchange for the participants' accounts.
The Trust will not issue shares under the Plan.

Participants in the Plan may withdraw from the Plan upon written notice to
the Plan Agent and will receive certificates for whole Trust shares and a cash
payment will be made for any fraction of a Trust share.

The Plan Agent's fees for the handling of the reinvestment of dividends
and distributions will be paid by the Trust. However, each participant will pay
a pro rata share of brokerage commissions incurred with respect to the Plan
Agent's open market purchases in connection with the reinvestment of dividends
and distributions. The automatic reinvestment of dividends and distributions
will not relieve participants of any federal, state or local income taxes that
may be payable on such dividends or distributions.

Experience under the Plan may indicate that changes are desirable.
Accordingly, the Trust reserves the right to amend or terminate the Plan as
applied to any dividend or distribution paid subsequent to written notice of the
change sent to all shareholders of the Trust at least 90 days before the record
date for the dividend or distribution. The Plan also may be amended or
terminated by the Plan Agent upon at least 90 days' written notice to all
shareholders of the Trust. All correspondence concerning the Plan should be
directed to the Trust at (800) 699-1BFM or BlackRock Financial Management, Inc.
at (800) 227-7BFM. The addresses are on the front of this report.

- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------

There have been no material changes in the Trust's investment objectives
or policies that have not been approved by the shareholders. There have been no
changes in the Trust's charter or by-laws. There have been no changes in the
principal risk factors associated with investment in the Trust. There have been
no changes in the persons who are primarily responsible for the day-to-day
management of the Trust's portfolio.

<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL TERM TRUST INC.
INVESTMENT SUMMARY
- --------------------------------------------------------------------------------

THE TRUST'S INVESTMENT OBJECTIVE

The Trust's investment objective is to provide current income exempt from
Federal income tax and to return $10 per share (the initial public offering
price per share) to investors on or about December 31, 2010.

WHO MANAGES THE TRUST?

BlackRock Financial Management, Inc. ("BlackRock" or the "Adviser") is the
investment adviser for the Trust. BlackRock is a registered investment adviser
specializing in fixed income securities. Currently, BlackRock manages
approximately $43 billion of assets across the government, mortgage, corporate
and municipal sectors. These assets are managed on behalf of institutional and
individual investors in 21 closed-end funds which trade on either the New York
Stock or American Stock Exchanges, several open-end funds and separate accounts
for more than 100 clients in the U.S. and overseas. BlackRock is a subsidiary of
PNC Asset Management Group, Inc. which is a division of PNC Bank N.A., one of
the nation's largest banking organizations.

WHAT CAN THE TRUST INVEST IN?

The Trust intends to invest at least 80% of its total assets in municipal
obligations insured as to the timely payment of both principal and interest. The
Trust may invest up to 20% of its total assets in uninsured municipal
obligations which are rated Aaa by Moody's or AAA by S&P, or are determined by
the Adviser to be of comparable credit quality (guaranteed, escrowed, or backed
in trust).

WHAT IS THE ADVISER'S INVESTMENT STRATEGY?

The Adviser will seek to meet the Trust's investment objective by managing the
assets of the Trust so as to return the initial offering price ($10 per share)
at maturity. The Trust will implement a conservative strategy that will seek to
closely match the maturity of the assets of the portfolio with the future return
of the initial investment at the end of 2010. At the Trust's termination,
BlackRock expects that the value of the securities which have matured, combined
with the value of the securities that are sold will be sufficient to return the
initial offering price to investors. On a continuous basis, the Trust will seek
its objective by actively managing its portfolio of municipal obligations and
retaining a small amount of income each year.

In addition to seeking the return of the initial offering price, the Adviser
also seeks to provide current income exempt from Federal income tax to
investors. The portfolio managers will attempt to achieve this objective by
investing in securities that provide competitive income. In addition, leverage
will be used (in an amount up to 35% of total assets) to enhance the income of
the portfolio. In order to maintain competitive yields as the Trust approaches
maturity and depending on market conditions, the Adviser will attempt to
purchase securities with call protection or maturities as close to the Trust's
maturity date as possible. Securities with call protection should provide the
portfolio with some degree of protection against reinvestment risk during times
of lower prevailing interest rates. Since the Trust's primary goal is to return
the initial offering price at maturity, any cash that the Trust receives prior
to its maturity date will be reinvested in securities with maturities which
coincide with the remaining term of the Trust. Since shorter-term securities
typically yield less than longer-term securities, this strategy will likely
result in a decline in the Trust's income over time. It is important to note
that the Trust will be managed so as to preserve the integrity of the return of
the initial offering price.

HOW ARE THE TRUST'S SHARES PURCHASED AND SOLD? DOES THE TRUST PAY DIVIDENDS
REGULARLY?

The Trust's shares are traded on the New York Stock Exchange which provides
investors with liquidity on a daily basis. Orders to buy or sell shares of the
Trust must be placed through a registered broker or financial adviser. The Trust
pays monthly dividends which are typically paid on the last business day of the
month. For shares held in the shareholder's name, dividends may be reinvested in
additional shares of the fund through the Trust's transfer agent, State Street
Bank and Trust Company. Investors who wish to hold shares in a brokerage account
should check with their financial adviser to determine whether their brokerage
firm offers dividend reinvestment services.

17
<PAGE>

LEVERAGE CONSIDERATIONS IN A TERM TRUST

Under current market conditions, leverage increases the income earned by the
Trust. The Trust employs leverage primarily through the issuance of preferred
stock. Leverage permits the Trust to borrow money at short-term rates and
reinvest that money in longer-term assets which typically offer higher interest
rates. The difference between the cost of the borrowed funds and the income
earned on the proceeds that are invested in longer term assets is the benefit to
the Trust from leverage. In general, the portfolio is typically leveraged at
approximately 35% of total assets.

Leverage also increases the duration (or price volatility of the net assets) of
the Trust, which can improve the performance of the fund in a declining rate
environment, but can cause net assets to decline faster than the market in a
rising rate environment. BlackRock's portfolio managers continuously monitor and
regularly review the Trust's use of leverage and the Trust may reduce, or
unwind, the amount of leverage employed should BlackRock consider that reduction
to be in the best interests of the shareholders.

SPECIAL CONSIDERATIONS AND RISK FACTORS RELEVANT TO TERM TRUSTS

THE TRUST IS INTENDED TO BE A LONG-TERM INVESTMENT AND IS NOT A SHORT-TERM
TRADING VEHICLE.

RETURN OF INITIAL INVESTMENT. Although the objective of the Trust is to return
its initial offering price upon termination, there can be no assurance that this
objective will be achieved.

DIVIDEND CONSIDERATIONS. The income and dividends paid by the Trust are likely
to decline to some extent over the term of the Trust due to the anticipated
shortening of the dollar-weighted average maturity of the Trust's assets.

LEVERAGE. The Trust utilizes leverage through the issuance of preferred stock
which involves special risks. The Trust's net asset value and market value may
be more volatile due to its use of leverage.

MARKET PRICE OF SHARES. The shares of closed-end investment companies such as
the Trust trade on the New York Stock Exchange (NYSE symbol: BMT) and as such
are subject to supply and demand influences. As a result, shares may trade at a
discount or a premium to their net asset value.

ILLIQUID SECURITIES. The Trust may invest in securities that are illiquid,
although under current market conditions the Trust expects to do so to only a
limited extent. Investing in these securities involves special risks.

ANTITAKEOVER PROVISIONS. Certain antitakeover provisions will make a change in
the Trust's business or management more difficult without the approval of the
Trust's Board of Directors and may have the effect of depriving shareholders of
an opportunity to sell their shares at a premium above the prevailing market
price.

MUNICIPAL OBLIGATIONS. Municipal obligations include debt obligations issued by
states, cities, and local authorities, and possessions and certain territories
of the United States to obtain funds for various public purposes, including the
construction of public facilities, the refinancing of outstanding obligations
and the obtaining of funds for general operating expenses and for loans to other
public institutions and facilities. The value of municipal debt securities
generally varies inversely with changes in prevailing market interest rates.
Depending on the amount of call protection that the securities in the Trust
have, the Trust may be subject to certain reinvestment risks in environments of
declining interest rates.

ALTERNATIVE MINIMUM TAX (AMT). The Trust may invest in securities subject to
alternative minimum tax. The Trust currently holds no AMT securities.

18
<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK INSUREDMUNICIPAL TERM TRUST INC.
GLOSSARY
- --------------------------------------------------------------------------------

CLOSED-END FUND: Investment vehicle which initially offers a fixed
number of shares and trades on a stock exchange.
The fund invests in a portfolio of securities in
accordance with its stated investment objectives
and policies.

DISCOUNT: When a fund's net asset value is greater than its
stock price, the fund is said to be trading at a
discount.

DIVIDEND: Income generated by securities in a portfolio and
distributed to shareholders after deduction of
expenses. This Trust declares and pays dividends
on a monthly basis.

DIVIDEND REINVESTMENT: Shareholders may have all distributions of
dividends and capital gains automatically
reinvested into additional shares of the Trust.

EMBEDDED CAPS: Also known as additional interest municipal bonds.
These securities are intended to protect the
income that the Trust earns through leverage from
significant increase in short-term rates. The
coupon on these bonds will increase if short-term
rates rise significantly.

MARKET PRICE: Price per share of a security trading in the
secondary market. For a closed-end fund, this is
the price at which one share of the fund trades on
the stock exchange. If you were to buy or sell
shares, you would pay or receive the market price.

NET ASSET VALUE (NAV): Net asset value is the total market value of all
securities and other assets held by the Trust,
plus income accrued on its investment, minus any
liabilities including accrued expenses, dividend
by the total number of outstanding shares. It is
the underlying value of a single share on a given
day. Net asset value for the Trust is calculated
weekly and published in Barron's on Saturday and
The Wall Street Journal on Monday.

PREMIUM: When a fund's stock price is greater than its net
asset value, the fund is said to be trading at a
premium.

PRE-REFUNDED BONDS: These securities are collateralized by the U.S.
Government securities which are held in escrow and
are used to pay principal and interest on the
tax-exempt issue and to retire the bond in full at
the date indicated, typically at a premium to par.

<PAGE>

BLACKROCK

DIRECTORS
Laurence D. Fink, Chairman
Andrew F. Brimmer
Richard E. Cavanagh
Kent Dixon
Frank J. Fabozzi
James Grosfeld
James Clayburn La Force, Jr.
Ralph L. Schlosstein

OFFICERS
Ralph L. Schlosstein, President
Keith T. Anderson, Vice President
Michael C. Huebsch, Vice President
Robert S. Kapito, Vice President
Kevin Klingert, Vice President
Richard M. Shea, Vice President/Tax
Henry Gabbay, Treasurer
James Kong, Assistant Treasurer
Karen H. Sabath, Secretary

INVESTMENT ADVISER
BlackRock Financial Management, Inc.
345 Park Avenue
New York, NY 10154
(800) 227-7BFM

ADMINISTRATOR
Mitchell Hutchins Asset Management Inc.
1285 Avenue of the Americas
New York, NY 10019

CUSTODIAN AND TRANSFER AGENT
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
(800) 669-1BFM

AUCTION AGENT
Bankers Trust Company Four
Albany Street New York, NY 10006

INDEPENDENT AUDITORS
Deloitte & Touche LLP Two
World Financial Center
New York, NY 10281-1434

LEGAL COUNSEL
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, NY 10022

This report is for shareholder information.
This is not a prospectus intended
for use in the purchase or sale of any securities.

THE BLACKROCK INSURED MUNICIPAL TERM TRUST INC.
c/o Mitchell Hutchins Asset Management Inc.
15th Floor
1285 Avenue of the Americas
New York, NY10019
(800) 227-7BFM

[Logo] Printed on recycled paper

092474 10 5
092474 20 4
092474 30 3

THE BLACKROCK
INSURED MUNICIPAL TERM TRUST INC.
================================================================================
ANNUAL REPORT
DECEMBER 31, 1996

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