MUNIYIELD
FLORIDA
INSURED FUND
FUND LOGO
Annual Report
October 31, 1996
This report, including the financial information herein, is
transmitted to the shareholders of MuniYield Florida Insured Fund
for their information. It is not a prospectus, circular or
representation intended for use in the purchase of shares of the
Fund or any securities mentioned in the report. Past performance
results shown in this report should not be considered a
representation of future performance. The Fund has leveraged its
Common Shares by issuing Preferred Shares to provide the Common
Shareholders with a potentially higher rate of return. Leverage
creates risks for Common Shareholders, including the likelihood of
greater volatility of net asset value and market price of the Common
Shares, and the risk that fluctuations in the short-term dividend
rates of the Preferred Shares may affect the yield to Common
Shareholders. Statements and other information herein are as dated
and are subject to change.
<PAGE>
MuniYield
Florida
Insured Fund
Box 9011
Princeton, NJ
08543-9011
MuniYield Florida Insured Fund
TO OUR SHAREHOLDERS
For the year ended October 31, 1996, the Common Shares of MuniYield
Florida Insured Fund earned $0.843 per share income dividends, which
included earned and unpaid dividends of $0.072. This represents a
net annualized yield of 5.53%, based on a month-end per share net
asset value of $15.25. Over the same period, the total investment
return on the Fund's Common Shares was +7.18%, based on a change in
per share net asset value from $15.16 to $15.25, and assuming
reinvestment of $0.844 per share income dividends and $0.065 per
share capital gains distributions.
<PAGE>
For the six-month period ended October 31, 1996, the total
investment return on the Fund's Common Shares was +6.37%, based on a
change in per share net asset value from $14.76 to $15.25, and
assuming reinvestment of $0.413 per share income dividends.
For the six-month period ended October 31, 1996, the Fund's Auction
Market Preferred Shares had an average yield of 3.45%.
The Municipal Market Environment
Municipal bond yields generally moved lower during the six-month
period ended October 31, 1996. Long-term tax-exempt revenue bond
yields, as measured by the Bond Buyer Revenue Bond Index, declined
approximately 35 basis points (0.35%) to end the October period at
approximately 5.94%. The municipal bond market exhibited
considerable weekly yield volatility over the last six months with
bond yields vacillating as much as 20 basis points. This ongoing
volatility was in response to fluctuating evidence regarding the
degree to which recent economic growth will result in any
significant increase in inflationary pressures. Much of the evidence
supporting stronger growth centered upon the strong employment
growth seen in April and June, and bond yields rose in response.
Other, more recent, economic indicators suggested that economic
growth will not be excessive and inflationary pressures will remain
well-contained. This continued benign inflationary environment
supported lower tax-exempt bond yields in recent months. US Treasury
bond yields exhibited similar, albeit greater, volatility during the
period, falling over 20 basis points to end the period at 6.64%.
Over the past six months, tax-exempt bond yields registered
significantly greater declines than shown by the US Treasury bond
market. This relative outperformance by the municipal bond market
was largely the result of the strong technical support the
tax-exempt market enjoyed throughout most of 1996. Perhaps most
significantly, the pace of new bond issuance recently slowed.
Over the last year, approximately $180 billion in long-term
municipal securities was issued, an increase of over 25% compared to
the same period a year ago. Much of this increase was the result of
issuers seeking to refinance their existing higher-couponed debt as
interest rates declined in 1995 and early 1996. As interest rates
rose, these financings became increasingly economically impractical,
and issuance declined. Over the last six months, approximately $90
billion in long-term, tax-exempt securities was underwritten, an
increase of 5% versus the comparable period a year earlier. Only $41
billion in tax-exempt securities was issued in the last three
months, a 3% decline in issuance versus the October 31, 1995
quarter.
<PAGE>
At the same time, investor demand remained consistently strong. With
nominal new-issue yields generally above 6%, retail investor
interest was steady. Additionally, investors received over $50
billion this June and July in assets derived from coupon income,
bond maturities, and proceeds from early redemptions. Annual new
bond issuance declined in recent years and is expected to remain
below levels seen in the early 1990s. Consequently, as the
higher-couponed bonds issued in the early-to-mid 1980s were redeemed
at their first optional call dates, the total number of outstanding
tax-exempt bonds has declined. This combination of a declining net
supply and significant amounts of assets available for investment
helped maintain investor demand in recent months.
It is unlikely that the municipal bond market will continue to
significantly outperform US Treasury securities in the near future.
The tax-exempt bond market's recent performance led to the yield
ratio between long-term taxable and tax-exempt securities falling
from in excess of 90% to approximately 85%. While historically still
very attractive, some institutional investors, particularly
short-term traders, began to view the tax-exempt bond market's
recent outperformance as an opportunity to sell a relatively
expensive asset. However, to the long-term investor such a sale
would represent the loss of an attractively priced asset which may
not be easily replaced given the relative scarcity of municipal
bonds under present supply conditions.
Looking ahead, no clear consensus for the direction of interest
rates currently exists. Perhaps, the primary focus going forward
will be the extent to which the increase in interest rates seen thus
far in 1996 will negatively impact future economic growth. Should
growth slow in the interest rate-sensitive sectors of the economy,
like housing, auto, and consumer spending, as many economists assert
is likely, then bond yields are likely to decline. Under such a
scenario, the municipal bond market's performance is likely to
closely mirror that of the US Treasury bond market.
Portfolio Strategy
Our investment strategy for MuniYield Florida Insured Fund shifted
dramatically during the past 12 months. We began the year ended
October 31, 1996 optimistic about the interest rate outlook because
of slow economic growth and low inflation. This strategy proved
successful as the bond market rallied into January 1996.
Unfortunately, our portfolio strategy remained constructive during
February and early March while interest rates began to rise. We
reversed course and became extremely defensive, seeking to protect
the Fund from the significant backup in interest rates that brought
the 30-year Treasury bond to 6.90% by the end of March. Since that
time we successfully utilized the trading range that confined the
bond market, enabling the Fund to realize an attractive total
return.
<PAGE>
Currently, we are cautious on the interest rate outlook. There is a
considerable amount of good news priced into the market, and any
surprises, such as a stronger economy or larger employment
increases, could cause interest rates to increase substantially. We
will focus on purchasing higher-coupon bonds that are less sensitive
to interest rate volatility in an effort to enhance tax-exempt
income to the Fund's Common Shareholders while seeking to protect
its net asset value. The interest rate on the Fund's Auction Market
Preferred Shares, which averaged approximately 3.40% over the past
year, continued to benefit the Fund's Common Shareholders. However,
should the spread between short-term and long-term interest rates
narrow, the benefits of the leverage will diminish and, as a result,
reduce the yield of the Fund's Common Shares. (For a complete
explanation of the benefits and risks of leveraging, see page 4 of
this report to shareholders.
In Conclusion
We appreciate your ongoing interest in MuniYield Florida Insured
Fund, and we look forward to serving your investment needs in the
months and years to come.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President
(Robert A. DiMella)
Robert A. DiMella
Portfolio Manager
<PAGE>
December 4, 1996
PROXY RESULTS
<TABLE>
During the six-month period ended October 31, 1996, MuniYield
Florida Insured Fund Common Shareholders voted on the following
proposals. The proposals were approved at a special shareholders'
meeting on September 9, 1996. The description of each proposal and
number of shares voted are as follows:
<CAPTION>
Shares Shares Voted
Voted For Without Authority
<S> <S> <C> <C>
1.To elect the Fund's Board of Trustees: Edward H. Meyer 7,975,766 137,576
Jack B. Sunderland 7,979,099 134,243
J. Thomas Touchton 7,979,099 134,243
Arthur Zeikel 7,977,599 135,743
<CAPTION>
Shares Shares Voted Shares Voted
Voted For Against Abstain
<S> <C> <C> <C>
2.To ratify the selection of Deloitte & Touche LLP
as the Fund's independent auditors for the current
fiscal year. 7,893,905 15,357 204,080
<CAPTION>
During the six-month period ended October 31, 1996, MuniYield
Florida Insured Fund Preferred Shareholders voted on the following
proposals. The proposals were approved at a special shareholders'
meeting on September 6, 1996. The description of each proposal and
number of shares voted are as follows:
Shares Shares Voted
Voted For Without Authority
<S> <S> <C> <C>
1.To elect the Fund's Board of Trustees: Donald Cecil 2,146 0
M. Colyer Crum 2,146 0
Edward H. Meyer 2,146 0
Jack B. Sunderland 2,146 0
J. Thomas Touchton 2,146 0
Arthur Zeikel 2,146 0
<PAGE>
<CAPTION>
Shares Shares Voted Shares Voted
Voted For Against Abstain
<S> <C> <C> <C>
2.To ratify the selection of Deloitte & Touche LLP
as the Fund's independent auditors for the current
fiscal year. 2,146 0 0
</TABLE>
THE BENEFITS AND RISKS OF LEVERAGING
MuniYield Florida Insured Fund utilizes leveraging to seek to
enhance the yield and net asset value of its Common Shares. However,
these objectives cannot be achieved in all interest rate
environments. To leverage, the Fund issues Preferred Shares, which
pay 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 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 Shares. However,
in order to benefit Common 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 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 Share
capitalization of $100 million and the issuance of Preferred Shares
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 Shares 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 Shares.
In this case, the dividends paid to Preferred Shareholders are
significantly lower than the income earned on the fund's long-term
investments, and therefore the Common Shareholders are the benefici-
aries 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
Shares will be reduced or eliminated completely. At the same time,
the market value of the fund's Common Shares (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 Shares'
net asset value will reflect the full decline in the price of the
portfolio's investments, since the value of the fund's Preferred
Shares does not fluctuate. In addition to the decline in net asset
value, the market value of the fund's Common Shares may also
decline.
<PAGE>
PORTFOLIO ABBREVIATIONS
To simplify the listings of MuniYield Florida Insured Fund'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
DATES Daily Adjustable Tax-Exempt Securities
HFA Housing Finance Agency
IDA Industrial Development Authority
IDR Industrial Development Revenue Bonds
PCR Pollution Control Revenue Bonds
RIB Residual Interest Bonds
S/F Single-Family
UT Unlimited Tax
VRDN Variable Rate Demand Notes
<TABLE>
SCHEDULE OF INVESTMENTS (In Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
Florida--98.9%
<S> <S> <C> <S> <C>
AAA Aaa $ 5,220 Atlantic Beach, Florida, Utilities System Revenue Bonds, 5.50% due
10/01/2025 (c) $ 5,116
AAA Aaa 5,000 Auburndale, Florida, Water and Sewer Revenue Refunding Bonds, 5.25% due
12/01/2025 (a) 4,757
Boynton Beach, Florida, Utility System Revenue Refunding Bonds (b):
AAA Aaa 3,375 6.25% due 11/01/2020 3,560
AAA Aaa 700 6.25% due 11/01/2020 (h) 738
<PAGE>
AAA Aaa 3,500 Brevard County, Florida, Health Facilities Authority, Revenue Refunding Bonds
(Holmes Regional Medical Center Project), 5.625% due 10/01/2014 (c) 3,513
AAA Aaa 3,000 Brevard County, Florida, IDR (NUI Corporation Project), AMT, 6.40% due
10/01/2024 (a) 3,197
Citrus County, Florida, PCR, Refunding (Florida Power Corp.-Crystal River) (c):
AAA Aaa 2,100 Series A, 6.625% due 1/01/2027 2,285
AAA Aaa 6,500 Series B, 6.35% due 2/01/2022 6,844
Dade County, Florida, Aviation Revenue Bonds, AMT, Series B (c):
AAA Aaa 5,000 (Miami International Airport), 5.75% due 10/01/2012 5,060
AAA Aaa 2,650 6.55% due 10/01/2013 2,844
AAA Aaa 12,715 6.60% due 10/01/2022 13,650
AAA Aaa 4,500 Dade County, Florida, Health Facilities Authority, Hospital Revenue Bonds
(Baptist Hospital of Miami Project), Series A, 5.75% due 5/01/2021 (c)(h) 4,505
AAA Aaa 4,500 Dade County, Florida, School District, UT, 5.90% due 8/01/2001 (b)(d) 4,780
AAA Aaa 15,000 Dade County, Florida, Seaport, UT, 6.50% due 10/01/2001 (a)(d) 16,486
Dade County, Florida, Special Obligation Refunding Bonds, Series B (a):
AAA Aaa 9,605 6.021%** due 10/01/2015 3,127
AAA Aaa 14,755 6.50%** due 10/01/2030 1,772
A1+ VMIG1++ 200 Dade County, Florida, Water and Sewer System Revenue Bonds, VRDN,
3.50% due 10/05/2022 (b)(e) 200
AAA Aaa 5,000 Escambia County, Florida, HFA, S/F Mortgage Revenue Refunding Bonds
(Multi-County Program), AMT, 7% due 4/01/2028 (f)(g) 5,335
BBB Baa1 1,000 Escambia County, Florida, PCR (Champion International Corporation Project),
AMT, 6.90% due 8/01/2022 1,057
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (In Thoudands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
Florida (continued)
<S> <S> <C> <S> <C>
AAA Aaa $ 1,150 Florida HFA (Brittany Rosemont Apartments), AMT, Series C-1, 6.75% due
8/01/2014 (a) $ 1,222
NR* Aaa 1,860 Florida HFA, Home Ownership Revenue Bonds, AMT, Series G1, 7.90% due
3/01/2022 (g) 1,965
<PAGE>
AA Aa 2,000 Florida State Board of Education (Capital Outlay), Series E, 5.70% due
6/01/2014 2,017
Florida State Board of Education, Public Education (Capital Outlay):
AA Aa 3,000 Refunding, Series A, 7.25% due 6/01/2023 3,311
AAA Aaa 2,000 Series A, 6.75% due 6/01/2001 (d) 2,207
AAA Aaa 1,790 Florida State Division, Board of Finance, Department of General Services
Revenue Bonds (Department of Natural Resource Preservation), Series 2000-A,
6.75% due 7/01/2013 (a) 1,964
AAA Aaa 5,000 Florida State Municipal Power Agency Revenue Bonds (Stanton II Project), 6.50%
due 10/01/2002 (a)(d) 5,586
Florida State Turnpike Authority, Turnpike Revenue Bonds, Series A (b):
AAA Aaa 5,000 (Department of Transportation), 5.50% due 7/01/2021 4,913
AAA Aaa 9,000 Refunding, 5% due 7/01/2019 8,278
AAA Aaa 1,000 Hillsborough County, Florida, IDA, Revenue Bonds (Allegany Health System-J.
Knox Village), 6.375% due 12/01/2012 (c) 1,062
AAA Aaa 1,100 Indian River County, Florida, Hospital District Revenue Refunding Bonds,
5.70% due 10/01/2015 (j) 1,107
AAA Aaa 2,860 Indian River County, Florida, Water and Sewer Revenue Refunding Bonds,
Series A, 5.25% due 9/01/2020 (b) 2,729
AAA Aaa 2,000 Jacksonville, Florida, Excise Taxes Revenue Refunding Bonds, 6.50% due
10/01/2013 (a) 2,174
AAA NR* 2,500 Lee County, Florida, HFA, S/F Mortgage Revenue Bonds (Multi-County Program),
Series A, Sub-Series 3, AMT, 7.45% due 9/01/2027 (f)(g) 2,769
A- A 5,000 Leesburg, Florida, Hospital Revenue Refunding Bonds (Leesburg Regional Medical
Center Project), Series A, 6.125% due 7/01/2012 5,066
AAA Aaa 1,000 Marion County, Florida, Hospital District Revenue Refunding Bonds (Monroe
Regional Medical Center), 6.25% due 10/01/2012 (b) 1,053
AAA Aaa 2,500 Miami, Florida, Sanitation Sewer System, UT, 6.50% due 1/01/2015 (b) 2,693
AAA Aaa 2,515 North Miami Beach, Florida, UT, 6.30% due 2/01/2024 (b) 2,680
Orange County, Florida, Tourist Development, Tax Revenue Bonds (a):
AAA Aaa 1,000 Refunding, Series A, 6.50% due 10/01/2010 1,090
AAA Aaa 7,815 Series B, 6.50% due 10/01/2019 8,500
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (In Thoudands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
Florida (concluded)
<S> <S> <C> <S> <C>
AAA Aaa $ 1,500 Palm Beach County, Florida, Criminal Justice Facilities Revenue Bonds,
7.20% due 6/01/2015 (b) $ 1,814
AAA Aaa 2,000 Palm Beach County, Florida, Solid Waste Authority, Revenue Refunding and
Improvement Bonds, 6.25% due 12/01/2008 (c) 2,165
A1 VMIG1++ 2,500 Pinellas County, Florida, Health Facilities Authority, Revenue Refunding Bonds
(Pooled Hospital Loan Program), DATES, 3.65% due 12/01/2015 (e) 2,500
A1+ VMIG1++ 600 Saint Lucie County, Florida, PCR, Refunding (Florida Power and Light Co.
Project), VRDN, 3.60% due 1/01/2026 (e) 600
AAA Aaa 4,060 Saint Petersburg, Florida, Health Facilities Authority Revenue Bonds
(Allegheny Health System), Series A, 7% due 12/01/2015 (c) 4,528
AAA Aaa 4,920 Sarasota County, Florida, Utility System Revenue Bonds, 6.50% due 10/01/2004
(b)(d) 5,557
AAA Aaa 4,630 Seminole County, Florida, School Board, COP, Refunding, Series A, 5.25% due
7/01/2021 (c) 4,420
AAA Aaa 2,250 South Broward Hospital District, Florida, Revenue Bonds, RIB, Series C, 9.389%
due 5/01/2001 (a)(d)(k) 2,706
AAA Aaa 2,275 South Florida, Water Management District, Special Obligation Land Aquisition
Bonds, 6% due 10/01/2015 (a) 2,344
AAA Aaa 2,700 Sumter County, Florida, Capital Improvement Revenue Refunding Bonds,
5% due 6/01/2024 (c)(i) 2,446
AAA Aaa 5,000 Sunrise, Florida, Utility System Revenue Bonds, Series A, 5.75% due
10/01/2026 (a) 5,012
Total Investments (Cost--$176,904)--98.9% 185,304
Other Assets Less Liabilities--1.1% 2,016
--------
Net Assets--100.0% $187,320
========
<PAGE>
<FN>
(a)AMBAC Insured.
(b)FGIC Insured.
(c)MBIA Insured.
(d)Prerefunded.
(e)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, 1996.
(f)FNMA Collateralized.
(g)GNMA Collateralized.
(h)Escrowed to Maturity.
(i)Bank Qualified.
(j)FSA Insured.
(k)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, 1996.
*Not Rated.
**Represents a zero coupon bond; the interest rate shown is the
effective yield at the time of purchase by the Fund.
++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.
</TABLE>
FINANCIAL INFORMATION
<TABLE>
Statement of Assets, Liabilities and Capital as of October 31, 1996
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$176,903,635) (Note 1a) $185,303,801
Cash 15,728
Interest receivable 2,247,717
Deferred organization expenses (Note 1e) 7,863
Prepaid expenses and other assets 7,241
------------
Total assets 187,582,350
------------
Liabilities: Payables:
Dividends to shareholders (Note 1f) $ 81,976
Investment adviser (Note 2) 79,001 160,977
------------
Accrued expenses and other liabilities 101,000
------------
Total liabilities 261,977
------------
<PAGE>
Net Assets: Net assets $187,320,373
============
Capital: Capital Shares (unlimited number of shares of beneficial
interest authorized) (Note 4):
Preferred Shares, par value $.05 per share (2,400
shares of AMPS* issued and outstanding at $25,000 per
share liquidation preference) $ 60,000,000
Common Shares, par value $.10 per share (8,350,463
shares issued and outstanding) $ 835,046
Paid-in capital in excess of par 116,287,758
Undistributed investment income--net 929,368
Undistributed realized capital gains on investments--net 868,035
Unrealized appreciation on investments--net 8,400,166
------------
Total--Equivalent to $15.25 net asset value per Common
Share (market price--$14.125) 127,320,373
------------
Total capital $187,320,373
============
<FN>
*Auction Market Preferred Shares.
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statement of Operations
<CAPTION>
For the Year Ended
October 31, 1996
<S> <S> <C> <C>
Investment Income Interest and amortization of premium and discount earned $ 10,437,767
(Note 1d):
Expenses: Investment advisory fees (Note 2) $ 929,974
Commission fees (Note 4) 152,256
Professional fees 68,939
Accounting services (Note 2) 57,900
Transfer agent fees 36,887
Printing and shareholder reports 27,917
Trustees' fees and expenses 22,849
Listing fees 16,676
Custodian fees 13,487
Amortization of organization expenses (Note 1e) 7,885
Pricing fees 7,501
Other 15,463
------------
Total expenses 1,357,734
------------
Investment income--net 9,080,033
------------
<PAGE>
Realized & Realized gain on investments--net 2,594,504
Unrealized Change in unrealized appreciation on investments--net (1,157,546)
Gain (Loss) on ------------
Investments--Net
(Notes 1b, 1d & 3): Net Increase in Net Assets Resulting from Operations $ 10,516,991
============
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the Year Ended
October 31,
Increase (Decrease) in Net Assets: 1996 1995
<S> <S> <C> <C>
Operations: Investment income--net $ 9,080,033 $ 9,334,176
Realized gain on investments--net 2,594,504 315,997
Change in unrealized appreciation/depreciation on investments--net (1,157,546) 11,706,927
------------ ------------
Net increase in net assets resulting from operations 10,516,991 21,357,100
------------ ------------
Dividends & Investment income--net:
Distributions to Common Shares (7,047,040) (7,021,495)
Shareholders Preferred Shares (1,997,712) (2,218,860)
(Note 1f): Realized gain on investments--net:
Common Shares (540,567) --
Preferred Shares (168,552) --
------------ ------------
Net decrease in net assets resulting from dividends and
distributions to shareholders (9,753,871) (9,240,355)
------------ ------------
Net Assets: Total increase in net assets 763,120 12,116,745
Beginning of year 186,557,253 174,440,508
------------ ------------
End of year* $187,320,373 $186,557,253
============ ============
<FN>
*Undistributed investment income--net $ 929,368 $ 894,087
============ ============
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (concluded)
<TABLE>
Financial Highlights
<CAPTION>
From the
Period
The following per share data and ratios have been derived Oct. 30,
from information provided in the financial statements. For the Year Ended 1992++ to
October 31, Oct. 31,
Increase (Decrease) in Net Asset Value: 1996 1995 1994 1993 1992
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 15.16 $ 13.70 $ 16.56 $ 14.14 $ 14.18
Operating -------- -------- -------- -------- --------
Performance: Investment income--net 1.08 1.12 1.13 1.12 --
Realized and unrealized gain (loss) on
investments--net .17 1.45 (2.70) 2.48 --
-------- -------- -------- -------- --------
Total from investment operations 1.25 2.57 (1.57) 3.60 --
-------- -------- -------- -------- --------
Less dividends and distributions to Common
Shareholders:
Investment income--net (.84) (.84) (.91) (.85) --
Realized gain on investments--net (.06) -- (.15) -- --
-------- -------- -------- -------- --------
Total dividends and distributions to Common
Shareholders (.90) (.84) (1.06) (.85) --
-------- -------- -------- -------- --------
Capital charge resulting from issuance of
Common Shares -- -- -- -- (.04)
-------- -------- -------- -------- --------
Effect of Preferred Share activity:++++
Dividends and distributions to Preferred
Shareholders:
Investment income--net (.24) (.27) (.20) (.19) --
Realized gain on investments--net (.02) -- (.03) -- --
Capital charge resulting from issuance
of Preferred Shares -- -- -- (.14) --
-------- -------- -------- -------- --------
Total effect of Preferred Share activity (.26) (.27) (.23) (.33) --
-------- -------- -------- -------- --------
Net asset value, end of period $ 15.25 $ 15.16 $ 13.70 $ 16.56 $ 14.14
======== ======== ======== ======== ========
Market price per share, end of period $ 14.125 $ 13.50 $ 11.375 $ 16.875 $ 15.00
======== ======== ======== ======== ========
<PAGE>
Total Investment Based on market price per share 11.48% 26.46% (27.46%) 18.78% .00%+++
Return:** ======== ======== ======== ======== ========
Based on net asset value per share 7.18% 17.91% (10.98%) 23.65% (.28%)+++
======== ======== ======== ======== ========
Ratios to Average Expenses, net of reimbursement .73% .75% .75% .66% --
Net Assets:*** ======== ======== ======== ======== ========
Expenses .73% .75% .75% .72% --
======== ======== ======== ======== ========
Investment income--net 4.88% 5.18% 4.99% 5.09% --
======== ======== ======== ======== ========
Supplemental Net assets, net of Preferred Shares, end
Data: of period (in thousands) $127,320 $126,557 $114,441 $137,908 $116,199
======== ======== ======== ======== ========
Preferred Shares outstanding, end of
period (in thousands) $ 60,000 $ 60,000 $ 60,000 $ 60,000 --
======== ======== ======== ======== ========
Portfolio turnover 156.11% 107.90% 51.81% 18.51% --
======== ======== ======== ======== ========
Leverage: Asset coverage per $1,000 $ 3,122 $ 3,109 $ 2,907 $ 3,298 --
======== ======== ======== ======== ========
Dividends Per Share Investment income--net $ 832 $ 925 $ 688 $ 662 --
On Preferred Shares ======== ======== ======== ======== ========
Outstanding:++++++
<FN>
+++Aggregate total investment return.
*Annualized.
**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 loads.
***Do not reflect the effect of dividends to Preferred Shareholders.
++Commencement of Operations.
++++The Fund's Preferred Shares were issued on November 19, 1992.
++++++Dividends per share have been adjusted to reflect a two-for-
one stock split that occurred on December 1, 1994.
See Notes to Financial Statements.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
<PAGE>
1. Significant Accounting Policies:
MuniYield Florida Insured Fund (the "Fund") is registered under the
Investment Company Act of 1940 as a non-diversified, closed-end
management investment company. The Fund determines and makes
available for publication the net asset value of its Common Shares
on a weekly basis. The Fund's Common Shares are listed on the New
York Stock Exchange under the symbol MFT. 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, which are traded on exchanges, are valued
at their last sale price as of the close of such exchanges or,
lacking any sales, at the last available bid price. Securities with
remaining maturities of sixty days or less are valued at amortized
cost, which approximates market value. Securities for which market
quotations are not readily available are valued at their fair value
as determined in good faith by or under the direction of the Board
of Trustees 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 Trustees.
(b) Derivative financial instruments--The Fund may engage in various
portfolio strategies to seek to increase its return by hedging its
portfolio against adverse movements in the debt markets. Losses may
arise due to changes in the value of the contract or if the
counterparty does not perform under the contract.
* Financial futures contracts--The Fund may purchase or sell
interest rate 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.
<PAGE>
* 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) Deferred organization expenses--Deferred organization expenses
are amortized on a straight-line basis over a five-year period.
(f) Dividends and distributions--Dividends from net investment
income are declared and paid monthly. Distributions of capital gains
are recorded on the ex-dividend dates.
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.
<PAGE>
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 0.50% of
the Fund's average weekly net assets.
Accounting services are provided to the Fund by FAM at cost.
Certain officers and/or trustees of the Fund are officers and/or
directors of FAM, PSI, Merrill Lynch, Pierce, Fenner & Smith Inc.
("MLPF&S"), and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the year ended October 31, 1996 were $277,673,889 and
$275,073,141, respectively.
Net realized and unrealized gains as of October 31, 1996 were as
follows:
Realized Unrealized
Gains Gains
Long-term investments $ 1,188,341 $ 8,400,166
Financial futures contracts 1,406,163 --
----------- -----------
Total $ 2,594,504 $ 8,400,166
=========== ===========
As of October 31, 1996, net unrealized appreciation for Federal
income tax purposes aggregated $8,400,166, of which $8,412,409
related to appreciated securities and $12,243 related to depreciated
securities. The aggregate cost of investments at October 31, 1996
for Federal income tax purposes was $176,903,635.
4. Capital Share Transactions:
The Fund is authorized to issue an unlimited number of capital
shares, including Preferred Shares, par value $.10 per share, all of
which were initially classified as Common Shares. The Board of
Trustees is authorized, however, to reclassify any unissued shares
of capital without approval of the holders of Common Shares.
Common Shares
For the year ended October 31, 1996, shares issued and outstanding
remained constant at 8,350,463. At October 31, 1996, total paid-in
capital amounted to $117,122,804.
Preferred Shares
Auction Market Preferred Shares ("AMPS") are Preferred Shares of the
Fund that entitle their holders to receive cash dividends at an
annual rate that may vary for the successive dividend periods. The
yield in effect at October 31, 1996 was 3.35%.
<PAGE>
As of October 31, 1996, there were 2,400 AMPS shares authorized,
issued and outstanding with a liquidation preference of $25,000 per
share.
The Fund pays commissions to certain broker-dealers at the end of
each auction at an annual rate ranging from 0.25% to 0.375%,
calculated on the proceeds of each auction. For the year ended
October 31, 1996, MLPF&S, an affiliate of FAM, earned $69,655 as
commissions.
5. Subsequent Event:
On November 8, 1996, the Fund's Board of Trustees declared an
ordinary income dividend to Common Shareholders in the amount of
$.071754 per share, payable on November 27, 1996 to shareholders of
record as of November 18, 1996.
<AUDIT-REPORT>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders of
MuniYield Florida Insured Fund:
We have audited the accompanying statement of assets, liabilities
and capital, including the schedule of investments, of MuniYield
Florida Insured Fund as of October 31, 1996, 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 four-year period
then ended and the period October 30, 1992 (commencement of
operations) to October 31, 1992. 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 generally accepted
auditing standards. 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, 1996 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.
<PAGE>
In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial position of
MuniYield Florida Insured Fund as of October 31, 1996, the results
of its operations, the changes in its net assets, and the financial
highlights for the respective stated periods in conformity with
generally accepted accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
December 4, 1996
</AUDIT-REPORT>
IMPORTANT TAX INFORMATION (unaudited)
All of the net investment income distributions paid by MuniYield
Florida Insured Fund during its taxable year ended October 31, 1996
qualify as tax-exempt interest dividends for Federal income tax
purposes. Additionally, the following summarizes the per share
capital gain distributions paid by the Fund during the year:
Payable Long-Term
Date Capital Gains
Common Shareholders 12/28/95 $ 0.064735
Preferred Shareholders 11/28/95 $29.27
12/05/95 $29.27
12/12/95 $11.69
Please retain this information for your records.
OFFICERS AND TRUSTEES
Arthur Zeikel, President and Trustee
Donald Cecil, Trustee
M. Colyer Crum, Trustee
Edward H. Meyer, Trustee
Jack B. Sunderland, Trustee
J. Thomas Touchton, Trustee
Terry K. Glenn, Executive Vice President
Vincent R. Giordano, Senior Vice President
Donald C. Burke, Vice President
Kenneth A. Jacob, Vice President
Gerald M. Richard, Treasurer
Mark B. Goldfus, Secretary
<PAGE>
Custodian
The Bank of New York
90 Washington Street
New York, New York 10286
Transfer Agents
Common Shares:
The Bank of New York
101 Barclay Street
New York, New York 10286
Preferred Shares:
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
NYSE Symbol
MFT
