MUNIYIELD
CALIFORNIA
INSURED
FUND, INC.
[GRAPHIC OMITTED]
STRATEGIC
Performance
Annual Report
October 31, 2000
<PAGE>
MUNIYIELD CALIFORNIA INSURED FUND, INC.
The Benefits and Risks of Leveraging
MuniYield California 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 California Insured Fund, Inc., October 31, 2000
DEAR SHAREHOLDER
For the year ended October 31, 2000, the Common Stock of MuniYield California
Insured Fund, Inc. earned $0.777 per share income dividends, which included
earned and unpaid dividends of $0.064. This represents a net annualized yield of
5.67%, based on a month-end per share net asset value of $13.71. Over the same
period, the total investment return on the Fund's Common Stock was +14.61%,
based on a change in per share net asset value from $12.73 to $13.71, and
assuming reinvestment of $0.782 per share income dividends.
For the six-month period ended October 31, 2000, the total investment return on
the Fund's Common Stock was +10.00%, based on a change in per share net asset
value from $12.84 to $13.71, and assuming reinvestment of $0.387 per share
income dividends.
For the six-month period ended October 31, 2000, the Fund's Auction Market
Preferred Stock had an average yield of 3.41% for Series A and 3.46% for Series
B.
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,
over $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.
Going forward, we will seek to take advantage of any backup in interest rates to
invest the Fund's cash to increase the Fund's tax-exempt income and extend
duration. This will 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 California Insured Fund, Inc.,
and we look forward to serving your investment needs in the months and years to
come.
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
November 21, 2000
2 & 3
<PAGE>
MuniYield California 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 California--94.2%
AAA Aaa $ 3,500 ABAG Finance Authority for Nonprofit Corporations, California, COP (Children's Hospital
Medical Center), 6% due 12/01/2029 (a) $ 3,691
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 4,110 ABC, California, Unified School District, GO, Series A, 4.75% due 8/01/2022 (b) 3,702
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 2,000 Bay Area Government Association, California, Revenue Refunding Bonds (California
Redevelopment Agency Pool), Series A, 6% due 12/15/2024 (f) 2,075
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 2,000 Beverly Hills, California, Public Financing Authority, Lease Revenue Refunding Bonds, INFLOS,
5.65% due 6/01/2015 (h)(j) 2,080
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 2,000 Big Bear Lake, California, Water Revenue Refunding Bonds, 6% due 4/01/2022 (h) 2,189
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 4,125 Burbank, California, Public Service Department, Electric Revenue Refunding Bonds,
4.75% due 6/01/2023 (f) 3,703
------------------------------------------------------------------------------------------------------------------------------------
NR* Aaa 5,985 California Educational Facilities Authority Revenue Bonds, Trust Receipt, AMT, Class R,
Series 11, 6.918% due 4/01/2028 (a)(j) 5,914
------------------------------------------------------------------------------------------------------------------------------------
NR* Aa2 2,750 California Educational Facilities Authority, Revenue Refunding Bonds, RIB, Series 147,
6.89% due 10/01/2027 (j) 2,769
------------------------------------------------------------------------------------------------------------------------------------
AA- Aa2 1,310 California HFA, Home Mortgage Revenue Bonds, AMT, Series F-1, 7% due 8/01/2026 (c) 1,338
------------------------------------------------------------------------------------------------------------------------------------
California HFA, Revenue Bonds, RIB, AMT (j):
NR* Aaa 3,585 Series 150, 7.29% due 2/01/2029 (h) 3,609
A+ Aa2 1,950 Series B-2, 8.351% due 8/01/2023 (c) 2,077
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 26,750 California Health Facilities Finance Authority Revenue Bonds (Kaiser Permanente), Series A,
5.50% due 6/01/2022 (f) 26,927
------------------------------------------------------------------------------------------------------------------------------------
California Health Facilities Finance Authority, Revenue Refunding Bonds (Adventist Hospital),
VRDN (h)(k):
A1+ VMIG1+ 4,700 Series A, 4.40% due 9/01/2028 4,700
A1+ VMIG1+ 6,500 Series B, 4.40% due 9/01/2028 6,500
A1+ VMIG1+ 170 Series C, 4.40% due 9/01/2015 170
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 2,000 California Infrastructure and Economic Development Bank Revenue Bonds,
5.25% due 6/01/2030 (h) 1,933
------------------------------------------------------------------------------------------------------------------------------------
California Pollution Control Financing Authority, PCR, Refunding (Pacific Gas and Electric),
VRDN (k):
A1+ NR* 700 AMT, Series B, 4.45% due 11/01/2026 700
A1+ NR* 2,600 Series A, 4.40% due 12/01/2018 2,600
A1+ NR* 2,000 Series C, 4.45% due 11/01/2026 2,000
A1+ NR* 700 Series D, 4.40% due 11/01/2026 700
A1+ NR* 1,900 Series F, 4.40% due 11/01/2026 1,900
------------------------------------------------------------------------------------------------------------------------------------
California Pollution Control Financing Authority, PCR, Refunding (Southern California
Edison Company), VRDN (k):
A1 VMIG1+ 9,600 Series A, 4.55% due 2/28/2008 9,600
A1 P1 1,000 Series C, 4.55% due 2/28/2008 1,000
A1 P1 400 Series D, 4.55% due 2/28/2008 400
------------------------------------------------------------------------------------------------------------------------------------
California Rural Home Mortgage Finance Authority, S/F Mortgage Revenue Bonds
(Mortgage-Backed Securities Program), AMT (d):
AAA NR* 1,900 Series A, 6.35% due 12/01/2029 (e) 2,098
NR* Aaa 1,060 Series A-1, 6.90% due 12/01/2024 (g) 1,142
------------------------------------------------------------------------------------------------------------------------------------
AA Aa2 1,000 California State Department of Water Resources, Water System Revenue Bonds (Central Valley
Project), Series O, 4.75% due 12/01/2017 937
------------------------------------------------------------------------------------------------------------------------------------
California State, GO:
AAA Aaa 3,000 6.25% due 10/01/2019 (h) 3,169
AAA Aaa 1,000 4.50% due 12/01/2021 (b) 868
AA Aa2 2,500 Refunding, 5% due 2/01/2020 2,395
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 8,000 California State Public Works Board, Lease Revenue Refunding Bonds (Department of
Corrections), Series B, 5.625% due 11/01/2016 (h) 8,321
------------------------------------------------------------------------------------------------------------------------------------
California Statewide Communities Development Authority, COP:
NR* VMIG1+ 1,185 (Continuing Care/University Project), VRDN, 4.40% due 11/15/2028 (k) 1,185
AAA Aaa 2,000 (John Muir/Mount Diablo Health System), 5.50% due 8/15/2012 (h) 2,143
AAA Aaa 3,400 (Kaiser Permanente), 5.30% due 12/01/2015 (f) 3,463
------------------------------------------------------------------------------------------------------------------------------------
NR* Aa2 1,200 California Statewide Communities Development Authority, Solid Waste Facilities Revenue Bonds
(Chevron U.S.A. Inc. Project), VRDN, AMT, 4.45% due 12/15/2024 (k) 1,200
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 3,000 Cerritos, California, Public Financing Authority Revenue Bonds (Los Coyotes Redevelopment
Project Loan), Series A, 6.50% due 11/01/2023 (a) 3,484
------------------------------------------------------------------------------------------------------------------------------------
Chaffey, California, Union High School District, GO, Series B (b):
AAA Aaa 1,385 5.50% due 8/01/2014 1,458
AAA Aaa 1,545 5.50% due 8/01/2015 1,616
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 865 Coalinga, California, Public Financing Authority, Local Obligation Revenue Refunding Bonds,
Senior Lien, Series A, 5.75% due 9/15/2014 (a) 952
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 2,540 Coalinga, California, Redevelopment Agency Tax Allocation Bonds, 5.90% due 9/15/2025 (h) 2,670
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 1,700 Contra Costa County, California, COP, Refunding (Merrithew Memorial Hospital Project),
5.375% due 11/01/2017 (h) 1,721
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 5,450 Corona, California, Public Financing Authority, Water Revenue Refunding Bonds,
4.75% due 9/01/2023 (b) 4,889
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 2,535 Culver City, California, Redevelopment Finance Authority, Tax Allocation Revenue Refunding
Bonds, 5.50% due 11/01/2014 (a) 2,717
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 2,000 East Bay-Delta, California, Housing and Finance Authority, Lease Purchase Revenue Bonds,
Series A, 4.75% due 6/01/2005 (h) 2,026
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 3,500 Long Beach, California, Harbor Revenue Refunding Bonds, AMT, Series A, 6% due 5/15/2012 (b) 3,859
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Portfolio Abbreviations
To simplify the listings of MuniYield California 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
IDR Industrial Development Revenue Bonds
INFLOS Inverse Floating Rate Municipal Bonds
PCR Pollution Control Revenue Bonds
RIB Residual Interest Bonds
RITR Residual Interest Trust Receipts
S/F Single-Family
VRDN Variable Rate Demand Notes
4 & 5
<PAGE>
MuniYield California 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 California
(concluded)
Los Angeles, California, Department of Water and Power, Electric Plant Revenue
Refunding Bonds (h):
AAA Aaa $ 7,140 6.125% due 2/15/2018 $ 7,552
AAA Aaa 2,000 5.875% due 2/15/2020 2,060
AAA Aaa 2,500 6% due 2/15/2030 2,582
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 8,500 Los Angeles, California, Department of Water and Power, Waterworks Revenue Refunding Bonds,
4.25% due 10/15/2030 (b) 6,822
------------------------------------------------------------------------------------------------------------------------------------
NR* Aaa 7,365 Los Angeles, California, Harbor Department Revenue Bonds, RIB, AMT, Series 349,
8.29% due 11/01/2026 (h)(j) 8,215
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 2,000 Los Angeles, California, Wastewater System Revenue Refunding Bonds, Series C, 4%
due 6/01/2016 (h) 1,717
------------------------------------------------------------------------------------------------------------------------------------
Los Angeles County, California, COP, Refunding (a):
AAA Aaa 360 6% due 4/01/2002 (i) 377
AAA Aaa 790 (Edmund D. Edelman), 6% due 4/01/2012 821
------------------------------------------------------------------------------------------------------------------------------------
Los Angeles County, California, Metropolitan Transportation Authority, Sales Tax Revenue
Refunding Bonds, Second Senior, Series A, Proposition C:
AAA Aaa 2,000 5% due 7/01/2023 (a) 1,898
AAA Aaa 2,715 4.75% due 7/01/2026 (f) 2,419
------------------------------------------------------------------------------------------------------------------------------------
Metropolitan Water District of Southern California, Waterworks Revenue Refunding Bonds:
AA Aa2 5,000 Series A, 4.75% due 7/01/2022 4,487
A1+ VMIG1+ 2,300 VRDN, Series B-1, 4.40% due 7/01/2035 (k) 2,300
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 5,000 Monterey County, California, COP, Refunding (Natividad Medical Center Improvement),
Series E, 4.75% due 8/01/2025 (h) 4,422
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 2,175 Mount Pleasant, California, Elementary School District, GO, Series B, 6.35%
due 12/01/2024 (f) 2,358
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 2,135 Newhall, California, School District, GO, Series A, 6.25% due 5/01/2020 (f) 2,341
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 1,835 Oakland, California, Redevelopment Agency Tax Allocation Refunding Bonds, INFLOS,
7.459% due 9/01/2019 (h)(j) 1,929
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 4,295 Oakland, California, State Building Authority, Lease Revenue Bonds (Elihu M. Harris),
Series A, 5.50% due 4/01/2014 (a) 4,492
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 1,245 Orange County, California, Airport Revenue Refunding Bonds, AMT, 5.625%
due 7/01/2012 (h) 1,304
------------------------------------------------------------------------------------------------------------------------------------
NR* Aaa 1,000 Orange County, California, Public Financing Authority, Waste Management System Revenue
Refunding Bonds, AMT, 5.75% due 12/01/2010 (a) 1,077
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 2,000 Orchard, California, School District, GO, Series A, 6.50% due 8/01/2005 (b)(i) 2,235
------------------------------------------------------------------------------------------------------------------------------------
Palmdale, California, COP (Courthouse and City Hall Project) (a):
AAA NR* 2,095 5% due 9/01/2019 2,023
AAA NR* 5,070 4.75% due 9/01/2029 4,470
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 9,000 Port Oakland, California, Port Revenue Bonds, AMT, Series E, 6.50% due 11/01/2016 (h) 9,459
------------------------------------------------------------------------------------------------------------------------------------
AAAr Aaa 5,000 Port Oakland, California, RITR, AMT, Class R, Series 5, 7.375% due 11/01/2012 (b)(j) 5,544
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 10,490 Roseville, California, Special Tax Refunding Bonds (Community Facilities
District 1--Northwest), 4.75% due 9/01/2020 (f) 9,558
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 1,000 Sacramento, California, Municipal Utility District, Electric Revenue Refunding Bonds,
Series G, 6.50% due 9/01/2013 (h) 1,177
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 2,000 San Diego, California, IDR, Refunding (San Diego Gas & Electric Company), Series C,
5.90% due 9/01/2018 (f) 2,065
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 3,570 San Diego County, California, COP (Salk Institute for Bio Studies), 5.75%
due 7/01/2022 (h) 3,683
------------------------------------------------------------------------------------------------------------------------------------
San Francisco, California, City and County Airport Commission, International Airport
Revenue Bonds, Second Series:
AAA Aaa 8,500 AMT, Issue 11, 6.25% due 5/01/2026 (b) 8,885
AAA Aaa 1,960 AMT, Issue 18A, 5.25% due 5/01/2012 (h) 2,000
AAA Aaa 2,500 AMT, Issue 22, 4.75% due 5/01/2023 (a) 2,201
AAA Aaa 3,000 Issue 21, 4.50% due 5/01/2026 (h) 2,558
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 3,000 San Francisco, California, City and County Airport Commission, International Airport
Revenue Refunding Bonds, Second Series, Issue 20, 4.50% due 5/01/2026 (h) 2,558
------------------------------------------------------------------------------------------------------------------------------------
San Francisco, California, City and County Redevelopment Agency, Lease Revenue Refunding
Bonds (George R. Moscone Convention Center) (f):
AAA Aaa 1,200 6.80% due 7/01/2019 1,314
AAA Aaa 2,060 6.75% due 7/01/2024 2,251
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 2,475 San Joaquin Hills, California, Transportation Corridor Agency, Toll Road Revenue
Refunding Bonds, Series A, 5.25% due 1/15/2030 (h) 2,396
------------------------------------------------------------------------------------------------------------------------------------
NR* Aaa 3,650 San Jose, California, Redevelopment Agency, Tax Allocation Bonds, RIB, AMT, Series 149,
7.49% due 8/01/2027 (h)(j) 3,849
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 4,000 San Mateo County, California, Transit District, Sales Tax Revenue Refunding Bonds,
Series A, 8% due 6/01/2020 (h) 5,330
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 3,540 Santa Clara County, California, Financing Authority, Lease Revenue Bonds (VMC Facility
Replacement Project), Series A, 7.75% due 11/15/2011 (a) 4,525
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 1,850 Santa Fe Springs, California, Redevelopment Agency, Tax Allocation Refunding Bonds,
Series A, 6.40% due 9/01/2022 (h) 1,927
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 2,185 Santa Rosa, California, High School District, GO, 6.375% due 5/01/2016 (h) 2,326
------------------------------------------------------------------------------------------------------------------------------------
AAA NR* 1,185 Stockton, California, Public Financing Revenue Refunding Bonds, Series A,
5.875% due 9/02/2016 (f) 1,261
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 1,500 Tehachapi, California, COP, Refunding (Installment Sale), 5.75% due 11/01/2016 (f) 1,596
------------------------------------------------------------------------------------------------------------------------------------
Tustin, California, Unified School District, Special Tax Refunding Bonds (Community
Facilities District No. 88-1) (f):
AAA Aaa 2,250 4.375% due 9/01/2019 1,953
AAA Aaa 11,235 4.50% due 9/01/2024 9,659
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 4,000 Walnut Valley, California, Unified School District, GO, Refunding, Series A,
7.20% due 2/01/2016 (h) 4,790
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 3,000 West Sacramento, California, Redevelopment Agency, Tax Allocation Refunding Bonds
(West Sacramento Redevelopment Project), 4.75% due 9/01/2027 (h) 2,664
====================================================================================================================================
</TABLE>
6 & 7
<PAGE>
MuniYield California 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>
Puerto Rico--4.2%
AAAr Aaa $ 4,750 Puerto Rico Commonwealth, GO, Refunding, RITR, Class R, Series 3, 7.31% due 7/01/2016 (h)(j) $ 5,150
------------------------------------------------------------------------------------------------------------------------------------
A- Baa1 2,750 Puerto Rico Electric Power Authority, Power Revenue Refunding Bonds, Series U,
6% due 7/01/2014 2,887
------------------------------------------------------------------------------------------------------------------------------------
NR* Aaa 5,000 Puerto Rico Municipal Finance Agency, GO, RIB, Series 225, 7.39% due 8/01/2012 (f)(j) 5,820
====================================================================================================================================
Total Investments (Cost--$312,750)--98.4% 321,877
Other Assets Less Liabilities--1.6% 5,124
--------
Net Assets--100.0% $327,001
========
====================================================================================================================================
</TABLE>
(a) AMBAC Insured.
(b) FGIC Insured.
(c) FHA Insured.
(d) FHLMC Collateralized.
(e) FNMA/GNMA Collateralized.
(f) FSA Insured.
(g) GNMA Collateralized.
(h) MBIA Insured.
(i) Prerefunded.
(j) 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.
(k) 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.
* Not Rated.
+ Highest short-term rating by Moody's Investors Service, Inc.
Ratings of issues shown have not been audited by Deloitte & Touche LLP.
See Notes to Financial Statements.
STATEMENT OF ASSETS, LIABILITIES AND CAPITAL
<TABLE>
<CAPTION>
As of October 31, 2000
===================================================================================================================================
<S> <C> <C> <C>
Assets: Investments, at value (identified cost--$312,749,606) .............................. $321,877,479
Cash ............................................................................... 77,568
Receivables:
Interest ......................................................................... $ 5,420,288
Securities sold .................................................................. 30,000 5,450,288
-------------
Prepaid expenses and other assets .................................................. 37,895
------------
Total assets ....................................................................... 327,443,230
------------
===================================================================================================================================
Liabilities: Payables:
Dividends to shareholders ........................................................ 172,151
Investment adviser ............................................................... 133,346 305,497
-------------
Accrued expenses and other liabilities ............................................. 137,202
------------
Total liabilities .................................................................. 442,699
------------
===================================================================================================================================
Net Assets: Net assets ......................................................................... $327,000,531
============
===================================================================================================================================
Capital: Capital Stock (200,000,000 shares authorized):
Preferred Stock, par value $.05 per share (4,000 shares of AMPS* issued and
outstanding at $25,000 per share liquidation preference) ......................... $100,000,000
Common Stock, par value $.10 per share (16,562,523
shares issued and outstanding) ................................................... $ 1,656,252
Paid-in capital in excess of par ................................................... 231,188,309
Undistributed investment income--net ............................................... 1,321,914
Accumulated realized capital losses on investments--net ............................ (9,961,811)
Accumulated distributions in excess of realized capital gains on investments--net .. (6,332,006)
Unrealized appreciation on investments--net ........................................ 9,127,873
-------------
Total--Equivalent to $13.71 net asset value per share of Common Stock
(market price--$12.625) ............................................................ 227,000,531
------------
Total capital ...................................................................... $327,000,531
============
===================================================================================================================================
</TABLE>
* Auction Market Preferred Stock.
See Notes to Financial Statements.
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 ............ $ 17,836,254
Income:
==========================================================================================================================
Expenses: Investment advisory fees ............................................ $1,581,391
Commission fees ..................................................... 256,880
Professional fees ................................................... 97,799
Accounting services ................................................. 87,129
Transfer agent fees ................................................. 72,551
Listing fees ........................................................ 28,303
Directors' fees and expenses ........................................ 27,173
Printing and shareholder reports .................................... 22,781
Custodian fees ...................................................... 18,147
Pricing fees ........................................................ 10,281
Other ............................................................... 25,738
----------
Total expenses ...................................................... 2,228,173
------------
Investment income--net .............................................. 15,608,081
------------
==========================================================================================================================
Realized & Unrealized Realized loss on investments--net ................................... (9,961,811)
Gain (Loss) on Change in unrealized appreciation/depreciation on investments--net .. 26,904,052
Investments--Net: ------------
Net Increase in Net Assets Resulting from Operations ................ $ 32,550,322
============
==========================================================================================================================
</TABLE>
See Notes to Financial Statements.
8 & 9
<PAGE>
MuniYield California Insured Fund, Inc., October 31, 2000
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 ............................................... $ 15,608,081 $ 16,153,594
Realized loss on investments--net .................................... (9,961,811) (1,867,682)
Change in unrealized appreciation/depreciation on investments--net ... 26,904,052 (36,831,141)
------------- -------------
Net increase (decrease) in net assets resulting from operations ...... 32,550,322 (22,545,229)
------------- -------------
===========================================================================================================================
Dividends & Investment income--net:
Distributions to Common Stock ....................................................... (12,951,122) (13,865,703)
Shareholders: Preferred Stock .................................................... (3,506,500) (1,931,760)
Realized gain on investments--net:
Common Stock ....................................................... -- (4,367,697)
Preferred Stock .................................................... -- (768,544)
In excess of realized gain on investments--net:
Common Stock ....................................................... -- (5,382,533)
Preferred Stock .................................................... -- (947,115)
------------- -------------
Net decrease in net assets resulting from dividends and distributions
to shareholders ...................................................... (16,457,622) (27,263,352)
------------- -------------
===========================================================================================================================
Capital Stock Value of shares issued to Common Stock shareholders in reinvestment of
Transactions: dividends and distributions .......................................... 175,505 3,385,881
------------- -------------
===========================================================================================================================
Net Assets: Total increase (decrease) in net assets .............................. 16,268,205 (46,422,700)
Beginning of year .................................................... 310,732,326 357,155,026
------------- -------------
End of year* ......................................................... $ 327,000,531 $ 310,732,326
============= =============
===========================================================================================================================
*Undistributed investment income--net ................................. $ 1,321,914 $ 2,171,455
============= =============
===========================================================================================================================
</TABLE>
See Notes to Financial Statements.
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 ................ $ 12.73 $ 15.75 $ 15.21 $ 14.59 $ 14.43
Operating --------- --------- --------- --------- ---------
Performance: Investment income--net ............................ .94 .98 1.02 1.05 1.04
Realized and unrealized gain (loss) on
investments--net .................................. 1.03 (2.34) .56 .63 .17
--------- --------- --------- --------- ---------
Total from investment operations .................. 1.97 (1.36) 1.58 1.68 1.21
--------- --------- --------- --------- ---------
Less dividends and distributions to Common Stock
shareholders:
Investment income--net ........................... (.78) (.84) (.82) (.86) (.84)
Realized gain on investments--net ................ -- (.27) -- -- --
In excess of realized gain on investments--net ... -- (.33) -- -- --
--------- --------- --------- --------- ---------
Total dividends and distributions to Common Stock
shareholders ...................................... (.78) (1.44) (.82) (.86) (.84)
--------- --------- --------- --------- ---------
Effect of Preferred Stock activity:
Dividends and distributions to Preferred Stock
shareholders:
Investment income--net ......................... (.21) (.12) (.19) (.20) (.21)
Realized gain on investments--net .............. -- (.04) (.03) -- --
In excess of realized gain on investments--net . -- (.06) -- -- --
--------- --------- --------- --------- ---------
Total effect of Preferred Stock activity .......... (.21) (.22) (.22) (.20) (.21)
--------- --------- --------- --------- ---------
Net asset value, end of year ...................... $ 13.71 $ 12.73 $ 15.75 $ 15.21 $ 14.59
========= ========= ========= ========= =========
Market price per share, end of year ............... $ 12.625 $ 12.625 $ 15.50 $ 15.125 $ 13.75
========= ========= ========= ========= =========
====================================================================================================================================
Total Investment Based on market price per share ................... 6.42% (10.35%) 8.13% 16.74% 15.84%
Return:* ========= ========= ========= ========= =========
Based on net asset value per share ................ 14.61% (11.04%) 9.26% 10.64% 7.54%
========= ========= ========= ========= =========
====================================================================================================================================
Ratios Based on Total expenses** .................................. 1.03% .97% .92% .93% .95%
Average Net Assets ========= ========= ========= ========= =========
Of Common Stock: Total investment income--net** .................... 7.21% 6.73% 6.61% 7.02% 7.15%
========= ========= ========= ========= =========
Amount of dividends to Preferred Stock
shareholders ...................................... 1.62% .80% 1.21% 1.36% 1.43%
========= ========= ========= ========= =========
Investment income--net, to Common Stock
shareholders ...................................... 5.59% 5.93% 5.40% 5.66% 5.72%
========= ========= ========= ========= =========
====================================================================================================================================
Ratios Based on Total expenses .................................... .70% .69% .66% .66% .67%
Total Average Net ========= ========= ========= ========= =========
Assets:**+ Total investment income--net ...................... 4.93% 4.76% 4.72% 5.01% 5.06%
========= ========= ========= ========= =========
====================================================================================================================================
Ratios Based on Dividends to Preferred Stock shareholders ......... 3.50% 1.94% 3.03% 3.33% 3.42%
Average Net Assets ========= ========= ========= ========= =========
Of Preferred Stock:
====================================================================================================================================
Supplemental Net assets, net of Preferred Stock, end of year
Data: (in thousands) .................................... $ 227,001 $ 210,732 $ 257,155 $ 248,376 $ 238,203
========= ========= ========= ========= =========
Preferred Stock outstanding, end of year (in
thousands) ........................................ $ 100,000 $ 100,000 $ 100,000 $ 100,000 $ 100,000
========= ========= ========= ========= =========
Portfolio turnover ................................ 92.62% 84.58% 106.63% 71.36% 79.39%
========= ========= ========= ========= =========
====================================================================================================================================
Leverage: Asset coverage per $1,000 ......................... $ 3,270 $ 3,107 $ 3,572 $ 3,484 $ 3,382
========= ========= ========= ========= =========
====================================================================================================================================
Dividends Per Share Series A--Investment income--net .................. $ 921 $ 469 $ 796 $ 858 $ 882
On Preferred Stock ========= ========= ========= ========= =========
Outstanding: Series B--Investment income--net .................. $ 832 $ 497 $ 721 $ 807 $ 826
========= ========= ========= ========= =========
====================================================================================================================================
</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.
See Notes to Financial Statements.
10 & 11
<PAGE>
MuniYield California Insured Fund, Inc., October 31, 2000
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
MuniYield California 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 MIC. 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 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.
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 at cost.
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 $271,111,548 and $296,562,949, 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 .......................... $(9,605,983) $9,127,873
Financial futures contracts .................... (355,828) --
----------- ----------
Total .......................................... $(9,961,811) $9,127,873
=========== ==========
--------------------------------------------------------------------------------
As of October 31, 2000, net unrealized appreciation for Federal income tax
purposes aggregated $9,127,873, of which $10,534,520 related to appreciated
securities and $1,406,647 related to depreciated securities. The aggregate cost
as of October 31, 2000 for Federal income tax purposes was $312,749,606.
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 holders of
Common Stock.
Common Stock
Shares issued and outstanding during the years ended October 31, 2000 and
October 31, 1999, increased by 13,039 and 220,611, respectively, as a result of
dividend reinvestment.
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, 4.30% and Series B, 3.00%.
Shares issued and outstanding during the years ended October 31, 2000 and
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
12 & 13
<PAGE>
MuniYield California Insured Fund, Inc., October 31, 2000
NOTES TO FINANCIAL STATEMENTS (concluded)
.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 $59,628 as commissions.
5. Capital Loss Carryforward:
At October 31, 2000, the Fund had a net capital loss carryforward of
approximately $14,419,000, of which $4,373,000 expires in 2007 and $10,046,000
expires in 2008. This amount will be available to offset like amounts of any
future taxable gains.
6. 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 $.063673 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, MuniYield California Insured Fund,
Inc.:
We have audited the accompanying statement of assets, liabilities and capital,
including the schedule of investments, of MuniYield California 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. 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 California
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
November 29, 2000
14 & 15
<PAGE>
MuniYield California Insured Fund, Inc., October 31, 2000
IMPORTANT TAX INFORMATION (unaudited)
All of the net investment income distributions paid by MuniYield California
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.
16 & 17
<PAGE>
MuniYield California Insured Fund, Inc., October 31, 2000
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 ......................................................... 82.5%
AA/Aa ........................................................... 4.3
A/A ............................................................. 0.9
Other* .......................................................... 10.7
--------------------------------------------------------------------------------
* 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
Roberto Roffo, Vice President
Donald C. Burke, Vice President and Treasurer
Alice A. Pellegrino, Secretary
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
Transfer Agents
Common Stock:
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
Preferred Stock:
The Bank of New York
100 Church Street
New York, NY 10286
NYSE Symbol
MIC
<PAGE>
MuniYield California Insured Fund, Inc. seeks to provide shareholders with as
high a level of current income exempt from Federal and California 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 and California income taxes.
This report, including the financial information herein, is transmitted to
shareholders of MuniYield California 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 California
Insured Fund, Inc.
Box 9011
Princeton, NJ
08543-9011 #16338--10/00
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