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PAINEWEBBER PREMIER INSURED MUNICIPAL INCOME FUND INC.
(DOING BUSINESS AS INSURED MUNICIPAL INCOME FUND)
SUPPLEMENT TO STATEMENT OF ADDITIONAL INFORMATION
DATED AUGUST 1, 1995
THE FOLLOWING INFORMATION SUPPLEMENTS AND SUPERSEDES ANY CONTRARY INFORMATION
CONTAINED IN THE STATEMENT OF ADDITIONAL INFORMATION:
1. FUNDAMENTAL INVESTMENT RESTRICTIONS. At a special meeting of shareholders
scheduled for April 11, 1996 (the 'Special Meeting'), shareholders of
PaineWebber Premier Insured Municipal Income Fund Inc. ('Fund') will be asked to
approve changes to the Fund's fundamental investment restrictions. If approved,
the following investment restrictions will supersede and replace the
restrictions listed in the section in the Fund's Statement of Additional
Information entitled 'Investment Limitations':
The Fund will not:
(1) purchase securities of any one issuer if, as a result, more than
5% of the Fund's total assets would be invested in securities of
that issuer or the Fund would own or hold more than 10% of the
outstanding voting securities of that issuer, except that up to
25% of the Fund's total assets may be invested without regard to
this limitation, and except that this limitation does not apply to
securities issued or guaranteed by the U.S. government, its
agencies and instrumentalities or to securities issued by other
investment companies.
The following interpretations apply to, but are not a part of,
this fundamental limitation:
Each state (including the District of Columbia and Puerto Rico),
territory and possession of the United States, each political
subdivision, agency, instrumentality and authority thereof, and
each multi-state agency of which a state is a member is a separate
'issuer.' When the assets and revenues of an agency, authority,
instrumentality or other political subdivision are separate from
the government creating the subdivision and the security is backed
only by the assets and revenues of the subdivision, such
subdivision would be deemed to be the sole issuer. Similarly, in
the case of an Industrial Development Bond or Private Activity
Bond, if that bond is backed only by the assets and revenues of
the non-governmental user, then that non-governmental user would
be deemed to be the sole issuer. However, if the creating
government or another entity guarantees a security, then to the
extent that the value of all securities issued or guaranteed by
that government or entity and owned by the Fund exceeds 10% of the
Fund's total assets, the guarantee would be considered a separate
security and would be treated as issued by that government or
entity.
This restriction does not limit the percentage of the Fund's
assets that may be invested in Municipal Obligations insured by
any given insurer.
(2) purchase any security if, as a result of that purchase, 25% or
more of the Fund's total assets would be invested in securities of
issuers having their principal business activities in the same
industry, except that this limitation does not apply to securities
issued or guaranteed by the U.S. government, its agencies or
instrumentalities or to municipal securities.
(3) issue senior securities (including borrowing money from banks and
other entities and through reverse repurchase agreements), except
(a) the Fund may borrow in an amount not in excess of 33 1/3% of
total assets (including the amount of senior securities issued,
but reduced by any liabilities and indebtedness not constituting
senior securities), (b) the Fund may issue preferred stock having
a liquidation preference in an amount which, combined with the
amount of any liabilities or indebtedness constituting senior
securities, is not in excess of 50% of its total assets (computed
as provided in clause (a) above) and (c) the Fund may borrow up to
an additional 5% of its total assets (not including the amount
borrowed) for temporary or emergency purposes.
(4) make loans, except through loans of portfolio securities or
through repurchase agreements, provided that for purposes of this
restriction, the acquisition of bonds, debentures, other debt
securities or instruments, or participations or other interests
therein and investments in government obligations, commercial
paper, certificates of deposit, bankers' acceptances or similar
instruments will not be considered the making of a loan.
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(5) engage in the business of underwriting securities of other
issuers, except to the extent that the Fund might be considered an
underwriter under the federal securities laws in connection with
its disposition of portfolio securities.
(6) purchase or sell real estate, except that investments in
securities of issuers that invest in real estate and investments
in mortgage-backed securities, mortgage participations or other
instruments supported by interests in real estate are not subject
to this limitation, and except that the Fund may exercise rights
under agreements relating to such securities, including the right
to enforce security interests and to hold real estate acquired by
reason of such enforcement until that real estate can be
liquidated in an orderly manner.
(7) purchase or sell physical commodities unless acquired as a result
of owning securities or other instruments, but the Fund may
purchase, sell or enter into financial options and futures,
forward and spot currency contracts, swap transactions and other
financial contracts or derivative instruments.
2. NON-FUNDAMENTAL INVESTMENT RESTRICTIONS. If the foregoing fundamental
restrictions are approved by the Fund's shareholders, the Fund would become
subject to the non-fundamental investment restrictions listed below. These
non-fundamental restrictions would replace certain of the Fund's current
fundamental restrictions and would be in addition to the non-fundamental
policies and restrictions already described in the Statement of Additional
Information.
The following investment restrictions are not fundamental and may be
changed by the Fund's Board of Directors without shareholder approval.
The Fund will not:
o purchase securities on margin, except for short-term credit
necessary for clearance of portfolio transactions and except that
the Fund may make margin deposits in connection with its use of
financial options and futures, forward and spot currency contracts,
swap transactions and other financial contracts or derivative
instruments.
o engage in short sales of securities or maintain a short position,
except that the Fund may (a) sell short 'against the box' and (b)
maintain short positions in connection with its use of financial
options and futures, forward and spot currency contracts, swap
transactions and other financial contracts or derivative
instruments.
o invest in oil, gas or mineral exploration or development programs or
leases, except that investments in securities of issuers that invest
in such programs or leases and investments in asset-backed
securities supported by receivables generated from such programs or
leases are not subject to this prohibition.
Dated: March 1, 1996
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