MUNIVEST
NEW YORK
INSURED
FUND, INC.
FUND LOGO
Annual Report
October 31, 1996
Officers and Directors
Arthur Zeikel, President and Director
Donald Cecil, Director
M. Colyer Crum, Director
Edward H. Meyer, Director
Jack B. Sunderland, Director
J. Thomas Touchton, Director
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>
Transfer Agents
Common Stock:
The Bank of New York
101 Barclay Street
New York, NY 10286
Preferred Stock:
IBJ Schroder Bank &Trust Company
One State Street
New York, NY 10004
Custodian
The Bank of New York
90 Washington Street
New York, NY 10286
NYSE Symbol
MVY
This report, including the financial information herein, is
transmitted to the shareholders of MuniVest New York Insured Fund,
Inc. 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 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.
MuniVest New York
Insured Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
Printed on post-consumer recycled paper
<PAGE>
MUNIVEST NEW YORK INSURED FUND, INC.
The Benefits and
Risks of
Leveraging
MuniVest New York Insured Fund, Inc. utilizes leveraging to seek to
enhance the yield and net asset value of its Common Stock. However,
these objectives cannot be achieved in all interest rate environments.
To leverage, the Fund issues Preferred Stock, which pays dividends
at prevailing short-term interest rates, and invests the proceeds
bonds. The interest earned on in long-term municipal 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 on 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.
<PAGE>
Important Tax
Information
(unaudited)
All of the net investment income distributions paid by MuniVest New
York Insured Fund, Inc. during its taxable year ended October 31,
1996 qualify as tax-exempt interest dividends for Federal income tax
purposes. Additionally, there were no capital gains distributed by
the Fund during the year.
Please retain this information for your records.
DEAR SHAREHOLDER
For the year ended October 31, 1996, the Common Stock of MuniVest
New York Insured Fund, Inc. earned $0.730 per share income dividends,
which included earned and unpaid dividends of $0.061. This represents
a net annualized yield of 5.57%, based on a month-end per share
net asset value of $13.11. Over the same period, the total
investment return on the Fund's Common Stock was +6.04%, based on a
change in per share net asset value from $13.14 to $13.11, and
assuming reinvestment of $0.731 per share income dividends.
For the six-month period ended October 31, 1996, the total investment
return on the Fund's Common Stock was +6.73%, based on a change
in per share net asset value from $12.66 to $13.11, and
assuming reinvestment of $0.356 per share income dividends.
For the six-month period ended October 31, 1996, the Fund's Auction
Market Preferred Stock had an average yield of 3.42%.
<PAGE>
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 around 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 ended October 31, 1996 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 compared to the October 31, 1995
quarter.
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.
<PAGE>
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 forward, 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
For the 12 months ended October 31, 1996, we managed the Fund with
the intention of sustaining an attractive level of tax-exempt income
while trying to achieve an above-average total return. We entered
the 12-month period optimistic that interest rates would decline.
This opinion was based on the belief that higher interest rates
earlier in the year would cause a drag on the economy. To take
advantage of this scenario, we extended the Fund's duration and
lowered our cash reserve position to a minimal level. From October
1995 to January 1996, the impression that the economy had slowed and
that there was no inflation on the horizon was enough to lower
interest rates by almost 50 basis points. Two rounds of Federal
Reserve Board easings in December 1995 and January 1996 made
investors complacent. This set the stage for a sudden loss of
investor confidence as an undeniably strong employment number in
March blindsided the market and began a period of extreme
volatility, which continued through the end of October. Looking
ahead, we expect this volatility to continue, and our portfolio
strategy is expected to remain neutral until the direction of the
economy becomes clearer.
In Conclusion
We appreciate your ongoing interest in MuniVest New York Insured
Fund, Inc., and we look forward to serving your investment needs in
the months and years to come.
Sincerely,
<PAGE>
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President
(Roberto Roffo)
Roberto Roffo
Portfolio Manager
November 22, 1996
We are pleased to announce that Roberto Roffo is responsible for the
day-to-day management of MuniVest New York Insured Fund, Inc. Mr.
Roffo has been employed by Merrill Lynch Asset Management, L.P. (an
affiliate of the Fund's investment adviser) since 1996 as Vice
President and Portfolio Manager and was Assistant Portfolio Manager
thereof from 1992 to 1996. Prior thereto, he was Operations Manager
with State Street Bank and Trust Company.
Portfolio Abbreviations
To simplify the listings of MuniVest New York Insured Fund, Inc.'s
portfolio holdings in the Schedule of Investments, we have
abbreviated the names of many of the securities according to the
list at right.
AMT Alternative Minimum Tax (subject to)
IDA Industrial Development Authority
RIB Residual Interest Bonds
UT Unlimited Tax
VRDN Variable Rate Demand Notes
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<CAPTION>
S&P Moody's Face Value
STATE Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
New York--98.6% AAA Aaa $ 1,400 Battery Park City Authority, New York, Revenue Refunding
Bonds, Senior Series A, 5.70% due 11/01/2020 (e) $ 1,387
AAA Aaa 2,400 Clifton Park, New York, Water Authority, Water System Revenue
Bonds, Series A, 6.375% due 10/01/2002 (b)(g) 2,666
Metropolitan Transportation Authority, New York, Commuter
Facilities Revenue Bonds:
AAA Aaa 2,000 (Grand Central Terminal), Series 1, 5.70% due 7/01/2024 (f) 1,981
AAA Aaa 2,990 Refunding, Series A, 6.125% due 7/01/2012 (e) 3,099
AAA Aaa 4,860 Series A, 6.10% due 7/01/2026 (b) 5,040
AAA Aaa 6,485 Metropolitan Transportation Authority, New York, Dedicated
Tax Fund, Series A, 5.25% due 4/01/2026 (e) 6,132
AAA Aaa 5,000 Metropolitan Transportation Authority, New York, Transport
Facilities Revenue Bonds, Series O, 6.375% due 7/01/2020 (e) 5,333
AAA Aaa 3,685 Nassau County, New York, UT, Series P, 6.50% due 11/01/2011 (b) 4,125
AAA Aaa 2,000 New York City, New York, Educational Construction Fund
Revenue Bonds, Senior Sub-Series B, 5.625% due 4/01/2013 (e) 2,011
AAA Aaa 5,000 New York City, New York, IDA, Civic Facilities Revenue Bonds
(USTA National Tennis Center Project), 6.375% due 11/15/2014 (f) 5,346
A- A 3,000 New York City, New York, Municipal Water Finance Authority,
Water and Sewer System Revenue Bonds, RIB, 7.868% due
6/15/2025 (h) 3,057
A1+ VMIG1++ 2,700 New York City, New York, Trust Cultural Resource Revenue Bonds
(Soloman R. Guggenheim), VRDN, Series B, 3.40% due 12/01/2015 (a) 2,700
New York City, New York, UT, Series B (Fiscal 92):
BBB+ Baa1 5,000 7.50% due 2/01/2006 5,550
AAA Aaa 2,000 7% due 2/01/2017 (c) 2,231
AAA Aaa 2,000 7% due 2/01/2018 (c) 2,231
New York City, New York, UT, Series C, Sub-Series C-1 (e)(g):
AAA Aaa 4,455 6.375% due 8/01/2002 4,916
AAA Aaa 5,625 6.375% due 8/01/2002 6,207
AAA Aaa 1,500 New York State Dormitory Authority, Lease Revenue Refunding
Bonds (State University Dormitory Facilities), Series A, 5.30%
due 7/01/2024 (c) 1,433
<PAGE>
New York State Dormitory Authority Revenue Bonds:
AAA Aaa 1,000 (City University System), Second Generation, Series A, 5.375%
due 7/01/2014 (b) 980
AAA Aaa 5,915 (City University System), Third Generation Resources, Series 2,
6.875% due 7/01/2014 (e) 6,606
A1+ VMIG1++ 500 (Cornell University), VRDN, Series B, 3.40% due 7/01/2025 (a) 500
AAA Aaa 2,000 (Mental Health Services Facilities Improvement), Series B,
5.125% due 8/15/2021 (e) 1,868
AAA Aaa 900 Refunding (Long Beach Medical Center), 5.625% due 8/01/2022 (d)(e) 885
AAA Aaa 1,500 Refunding (State University Educational Facilities),
Series A, 5.50% due 5/15/2010 (b) 1,530
AAA Aaa 4,500 Refunding (State University Educational Facilities),
Series A, 5.875% due 5/15/2011 (b) 4,732
AAA Aaa 5,000 New York State Energy Research and Development Authority,
Gas Facilities Revenue Bonds (Brooklyn Union Gas Company),
AMT, Series B, 6.75% due 2/01/2024 (e) 5,418
New York State Local Government Assistance Corporation, VRDN (a):
A1+ VMIG1++ 2,000 Series B, 3.50% due 4/01/2025 2,000
A1+ VMIG1++ 2,000 Series G, 3.40% due 4/01/2025 2,000
New York State Medical Care Facilities Finance Agency
Revenue Bonds:
AAA Aaa 4,600 (New York Hospital Mortgage), Series A, 6.80% due
8/15/2024 (c)(d) 5,078
AAA Aaa 2,000 (New York Hospital Mortgage), Series A, 6.50% due
8/15/2029 (c)(d) 2,152
AAA Aaa 4,000 Refunding (Mental Health Services), Series F, 5.25% due
2/15/2021 (f) 3,745
New York State Mortgage Agency, Homeowner Mortgage
Revenue Bonds:
NR* Aa 3,490 AMT, Series 50, 6.625% due 4/01/2025 3,668
NR* Aa 1,000 AMT, Series 58, 6.40% due 4/01/2027 1,028
AAA Aaa 1,000 Series 43, 6.45% due 10/01/2017 (e) 1,048
AAA VMIG1++ 2,900 New York State Thruway Authority, General Revenue Bonds,
VRDN, 3.55% due 1/01/2024 (a)(b) 2,900
New York State Urban Development Corporation, Revenue Refunding
Bonds (Correctional Capital Facilities), Series A:
AAA Aaa 1,295 5.25% due 1/01/2014 (f) 1,262
AAA Aaa 6,000 5% due 1/01/2017 (c) 5,547
AAA Aaa 1,000 Niagara Falls, New York, Water Treatment Plant, UT, AMT,
7.25% due 11/01/2010 (e) 1,175
AAA Aaa 3,000 Port Authority of New York and New Jersey, Consolidated
Revenue Bonds, 72nd Series, 7.40% due 10/01/2002 (c)(g) 3,465
<PAGE>
A1+ VMIG1++ 1,000 Port Authority of New York and New Jersey, Special Obligation
Revenue Bonds (Versatile Structure Obligation), VRDN, AMT,
Series 1, 3.55% due 8/01/2028 (a) 1,000
A1+ VMIG1++ 3,700 Syracuse, New York, IDA, Civic Facility Revenue Bonds (Multi-Modal
Syracuse University Project), VRDN, 3.40% due 3/01/2023 (a) 3,700
AAA Aaa 2,000 Triborough Bridge and Tunnel Authority, New York, General
Purpose Revenue Refunding Bonds, Series Y, 6.125% due
1/01/2021 (i) 2,155
Triborough Bridge and Tunnel Authority, New York, Special
Obligation Refunding Bonds:
AAA Aaa 5,475 Series A, 6.625% due 1/01/2017 (e) 5,912
AAA Aaa 5,150 Series B, 6.875% due 1/01/2015 (c) 5,652
Total Investments (Cost--$134,162)--98.6% 141,451
Other Assets Less Liabilities--1.4% 2,006
--------
Net Assets--100.0% $143,457
========
<FN>
(a)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.
(b)FGIC Insured.
(c)AMBAC Insured.
(d)FHA Insured.
(e)MBIA Insured.
(f)FSA Insured.
(g)Prerefunded.
(h)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.
(i)CAPMAC Insured.
*Not Rated.
++Highest short-term rating by Moody's Investors Service, Inc.
Ratings of issues shown have not been audited by Ernst & Young LLP.
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF ASSETS, LIABILITIES AND CAPITAL
<CAPTION>
As of October 31, 1996
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$134,161,954) (Note 1a) $141,451,415
Cash 33,186
Interest receivable 2,268,015
Deferred organization expenses (Note 1e) 9,369
Prepaid expenses and other assets 11,668
------------
Total assets 143,773,653
------------
<PAGE>
Liabilities: Payables:
Dividends to shareholders (Note 1f) $ 188,695
Investment adviser (Note 2) 60,559 249,254
------------
Accrued expenses and other liabilities 66,902
------------
Total liabilities 316,156
------------
Net Assets: Net assets $143,457,497
============
Capital: Capital Stock (200,000,000 shares authorized)(Note 4):
Preferred Stock, par value $.05 per share (1,960 shares of AMPS*
issued and outstanding at $25,000
per share liquidation preference) $ 49,000,000
Common Stock, par value $.10 per share (7,204,432 shares
issued and outstanding) $ 720,443
Paid-in capital in excess of par 100,237,381
Undistributed investment income--net 497,680
Accumulated realized capital losses on investments--net (Note 5) (14,287,468)
Unrealized appreciation on investments--net 7,289,461
------------
Total--Equivalent to $13.11 net asset value per share of
Common Stock (market price--$11.875) 94,457,497
------------
Total capital $143,457,497
============
<FN>
*Auction Market Preferred Stock.
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For the Year Ended October 31, 1996
<S> <S> <C> <C>
Investment Interest and amortization of premium and discount earned $ 8,043,036
Income (Note 1d):
<PAGE>
Expenses: Investment advisory fees (Note 2) $ 715,682
Commission fees (Note 4) 124,323
Professional fees 78,169
Accounting services (Note 2) 40,036
Printing and shareholder reports 35,574
Transfer agent fees 34,461
Directors' fees and expenses 22,766
Listing fees 16,170
Custodian fees 12,124
Amortization of organization expenses (Note 1e) 6,292
Pricing fees 5,798
Other 13,734
------------
Total expenses 1,105,129
------------
Investment income--net 6,937,907
------------
Realized & Realized gain on investments--net 945,584
Unrealized Gain Change in unrealized appreciation on investments--net (1,135,178)
(Loss) on ------------
Investments--Net Net Increase in Net Assets Resulting from Operations $ 6,748,313
(Notes 1b, 1d & 3): ============
See Notes to Financial Statements.
</TABLE>
<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 $ 6,937,907 $ 7,244,028
Realized gain (loss) on investments--net 945,584 (8,401,860)
Change in unrealized appreciation/depreciation on investments--net (1,135,178) 18,187,404
------------ ------------
Net increase in net assets resulting from operations 6,748,313 17,029,572
------------ ------------
Dividends to Investment income--net:
Shareholders Common Stock (5,270,028) (5,428,929)
(Note 1f): Preferred Stock (1,702,965) (1,838,960)
------------ ------------
Net decrease in net assets resulting from dividends
to shareholders (6,972,993) (7,267,889)
------------ ------------
<PAGE>
Net Assets: Total increase (decrease) in net assets (224,680) 9,761,683
Beginning of year 143,682,177 133,920,494
------------ ------------
End of year* $143,457,497 $143,682,177
============ ============
<FN>
*Undistributed investment income--net $ 497,680 $ 532,766
============ ============
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
For the
Period
The following per share data and ratios have been derived April 30,
from information provided in the financial statements. For the Year Ended 1993++ to
October 31, Oct. 31,
Increase (Decrease) in Net Asset Value: 1996 1995 1994 1993
<S> <S> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 13.14 $ 11.79 $ 14.90 $ 14.18
Operating -------- -------- -------- --------
Performance: Investment income--net .97 1.00 1.03 .48
Realized and unrealized gain (loss) on
investments--net (.03) 1.36 (3.06) .80
-------- -------- -------- --------
Total from investment operations .94 2.36 (2.03) 1.28
-------- -------- -------- --------
Less dividends and distributions to Common
Stock shareholders:
Investment income--net (.73) (.75) (.86) (.34)
Realized gain on investments--net -- -- (.04) --
-------- -------- -------- --------
Total dividends and distributions to
Common Stock shareholders (.73) (.75) (.90) (.34)
-------- -------- -------- --------
Capital charge resulting from issuance of
Common Stock -- -- -- (.03)
-------- -------- -------- --------
Effect of Preferred Stock activity:++++
Dividends and distributions to Preferred Stock
shareholders:
Investment income--net (.24) (.26) (.17) (.06)
Realized gain on investments--net -- -- (.01) --
Capital charge resulting from issuance of
Preferred Stock -- -- -- (.13)
-------- -------- -------- --------
Total effect of Preferred Stock activity (.24) (.26) (.18) (.19)
-------- -------- -------- --------
Net asset value, end of period $ 13.11 $ 13.14 $ 11.79 $ 14.90
======== ======== ======== ========
Market price per share, end of period $ 11.875 $ 12.00 $ 10.50 $ 14.75
======== ======== ======== ========
<PAGE>
Total Investment Based on market price per share 5.17% 21.97% (23.65%) .59%+++
Return:** ======== ======== ======== ========
Based on net asset value per share 6.04% 18.94% (15.13%) 7.49%+++
======== ======== ======== ========
Ratios to Average Expenses, net of reimbursement .77% .75% .64% .35%*
Net Assets:*** ======== ======== ======== ========
Expenses .77% .77% .74% .79%*
======== ======== ======== ========
Investment income--net 4.83% 5.22% 5.06% 4.75%*
======== ======== ======== ========
Supplemental Net assets, net of Preferred Stock, end of
Data: period (in thousands) $ 94,457 $ 94,682 $ 84,920 $106,279
======== ======== ======== ========
Preferred Stock outstanding, end of period
(in thousands) $ 49,000 $ 49,000 $ 49,000 $ 49,000
======== ======== ======== ========
Portfolio turnover 109.89% 192.08% 74.77% 10.81%
======== ======== ======== ========
Leverage: Asset coverage per $1,000 $ 2,928 $ 2,932 $ 2,733 $ 3,169
======== ======== ======== ========
Dividends Investment income--net $ 869 $ 938 $ 610 $ 242
Per Share on ======== ======== ======== ========
Preferred Stock
Outstanding:++++++
<FN>
*Annualized.
**Total investment returns based on market value, which can be
significantly greater or lesser than the net 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 Stock shareholders.
++Commencement of Operations.
++++The Fund's Preferred Stock was issued on June 1, 1993.
++++++Dividends per share have been adjusted to reflect a two-for-one stock
split that occurred on December 1, 1994.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
MuniVest New York Insured Fund, Inc. (the "Fund") is registered
under the Investment Company Act of 1940 as a non-diversified,
closed-end management investment company. The Fund 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 MVY. 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 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 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.
NOTES TO FINANCIAL STATEMENTS (concluded)
(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 directors 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 $144,375,324 and
$153,429,496, respectively.
Net realized and unrealized gains as of October 31, 1996 were
as follows:
Realized Unrealized
Gains Gains
Long-term investments $ 936,094 $ 7,289,461
Financial futures contracts 9,490 --
------------ ------------
Total $ 945,584 $ 7,289,461
============ ============
As of October 31, 1996, net unrealized appreciation for Federal
income tax purposes aggregated $7,289,461, of which $7,299,693
related to appreciated securities and $10,232 related to depreciated
securities. The aggregate cost of investments October 31, 1996 for
Federal income tax purposes was $134,161,954.
4. Capital Stock Transactions:
The Fund is authorized to issue 200,000,000 shares of capital stock,
including Preferred Stock, par value $.10 per share, all of which
were initially classified as Common Stock. The Board of Directors is
authorized, however, to reclassify any unissued shares of capital
stock without approval of the holders of Common Stock.
Common Stock
For the year ended October 31, 1996, shares issued and outstanding
remained constant at 7,204,432. At October 31, 1996, total paid-in
capital amounted to $100,957,824.
<PAGE>
Preferred Stock
Auction Market Preferred Stock ("AMPS") are shares of Preferred
Stock 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
3.012%.
As of October 31, 1996, there were 1,960 AMPS 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 $64,709 as
commissions.
5. Capital Loss Carryforward:
At October 31, 1996, the Fund had a net capital loss carryforward of
approximately $12,812,000, of which $5,834,000 expires in 2002 and
$6,978,000 expires in 2003. This amount will be available to offset
like amounts of any future taxable gains.
6. Reorganization Plan:
On May 3, 1996, the Board of Directors approved a plan of
reorganization, subject to shareholder approval and certain other
conditions, whereby MuniYield New York Insured Fund II, Inc. would
acquire substantially all of the assets and liabilities of the Fund
and MuniYield New York Insured Fund III, Inc. in exchange for newly
issued shares of MuniYield New York Insured Fund II, Inc. MuniYield
New York Insured Fund II, Inc. and MuniYield New York Insured Fund
III, Inc. are registered, non-diversified, closed-end management
investment companies. All three entities have a similar investment
objective and are managed by FAM.
7. Subsequent Event:
On November 8, 1996, the Fund's Board of Directors declared an
ordinary income dividend to Common Stock shareholders in the amount
of $.060916 per share, payable on November 27, 1996 to shareholders
of record as of November 18, 1996.
<AUDIT-REPORT>
REPORT OF INDEPENDENT AUDITORS
<PAGE>
To the Shareholders and Board of Directors,
MuniVest New York Insured Fund, Inc.
We have audited the accompanying statement of assets, liabilities
and capital of MuniVest New York Insured Fund, Inc., including the
schedule of investments, as of October 31, 1996, and the related
statement of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then
ended and financial highlights for each of the periods indicated
therein. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and financial
highlights based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures
included confirmation of securities owned as of 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.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of MuniVest New York Insured Fund, Inc. at
October 31, 1996, the results of its operations for the year then
ended, the changes in its net assets for each of the two years in
the period then ended and financial highlights for each of the
indicated periods, in conformity with generally accepted accounting
principles.
(Ernst & Young LLP)
Princeton, New Jersey
November 26, 1996
</AUDIT-REPORT>
