MUNIVEST
CALIFORNIA
INSURED
FUND, INC.
FUND LOGO
Semi-Annual Report
April 30, 1996
This report, including the financial information
herein, is transmitted to the shareholders of MuniVest
California 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 repre-
sentation 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 fluc-
tuations in the short-term dividend rates of the Preferred
Stock may affect the yield to Common Stock share-
holders. Statements and other information herein are
as dated and are subject to change.
<PAGE>
MuniVest California
Insured Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
MUNIVEST CALIFORNIA INSURED FUND, INC.
<PAGE>
The Benefits and
Risks of
Leveraging
MuniVest 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 prevail-
ing 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
pick-up 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>
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
Walter C. O'Connor, Vice President
Roberto Roffo, Vice President
Gerald M. Richard, Treasurer
Mark B. Goldfus, Secretary
Custodian
The Bank of New York
90 Washington Street
New York, New York 10286
NYSE Symbol
MVC
Transfer Agents
Common Stock:
The Bank of New York
101 Barclay Street
New York, New York 10286
Preferred Stock:
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
<PAGE>
DEAR SHAREHOLDER
For the six-month period ended April
30, 1996, the Common Stock of MuniVest
California Insured Fund, Inc. earned
$0.386 per share income dividends,
which included earned and unpaid divi-
dends of $0.062. This represents a net
annualized yield of 5.99%, based on a
month-end per share net asset value of
$12.93. Over the same period, the total
investment return on the Fund's Com-
mon Stock was -0.38%, based on a
change in per share net asset value from
$13.39 to $12.93, and assuming rein-
vestment of $0.394 per share income
dividends.
For the six-month period ended April
30, 1996, the Fund's Auction Market
Preferred Stock had an average yield
of 3.48%.
The Municipal Market
During the six months ended April 30,
1996, tax-exempt bonds yields rose as
investors became increasingly concerned
that recent economic growth would re-
ignite inflationary pressures. Through
early February 1996, municipal bond
yields continued their earlier declines
supported by continued moderate eco-
nomic growth and favorable inflationary
expectations. As measured by the Bond
Buyer Revenue Bond Index, yields on
uninsured, A-rated municipal revenue
bonds declined an additional 30 basis
points (0.30%) to 5.70% by early Febru-
ary. As signs of emerging economic
growth became more numerous, partic-
ularly with the release of the strong
March employment figures, inflation
fears increased and bond yields rose in
response for the remainder of the six-
month period ended April 30, 1996. At
April 30, 1996, long-term municipal bond
yields were approximately 6.30%, an
increase of approximately 30 basis points
over the last six months. The rise in US
Treasury bond yields was more substan-
tial. Over the last six months, yields on
US Treasury securities rose approxi-
mately 60 basis points to 6.90%. During
the April period, the municipal bond
market reversed the trend seen through-
out much of 1995 and significantly out-
performed the US Treasury bond market.
<PAGE>
The municipal bond market's recent out-
performance was largely the result of
two principal factors. First, and perhaps
more important, much of the earlier
concern regarding proposed changes in
Federal income tax codes and their effect
on the tax treatment of tax-exempt bond
income has dissipated. As the negative
revenue impact of the various propos-
als, such as the flat tax, became appar-
ent, the likelihood of immediate reform
quickly diminished. When the Kemp
Commission dealing with Federal income
tax reform released its findings early in
1996, the obvious need for reform was
highlighted. However, no specific recom-
mendations of a flat tax, value-added
tax or any other reform were made. Con-
sequently, fears of losing the favored tax
treatment of municipal bond income
declined even further. As a percentage
of Treasury bond yields, tax-exempt bond
yield ratios quickly declined from 95%
to approximately 90%. This allowed the
municipal bond market to maintain much
of the gains made since early 1995.
The second major factor leading to the
municipal bond market's recent improve-
ment was the return of a more favorable
technical environment. Over the past
six months, approximately $90 billion in
municipal securities were underwritten,
an increase of approximately 45% versus
the comparable period a year earlier.
However, much of this increase was
biased by recent underwritings dedicated
toward refinancing. Like individual
homeowners, municipal issuers sought
to refinance their existing higher-
couponed debt as tax-exempt bond yields
declined from their highs in 1995. In
recent months such refinancings were
estimated to represent at least 50% of
total issuance. However, the recent rise
in tax-exempt interest rates slowed the
pace of such refinancings. Over the last
three months approximately $40 billion
in long-term tax-exempt securities were
underwritten, an increase of 35% com-
pared to the same period a year ago. At
current interest rate levels large amounts
of refundings are unlikely and the rate
of new bond issuance should continue
to decline.
<PAGE>
Additionally, investors continue to
receive significant amounts of assets
derived from coupon income, bond
maturities, and proceeds from early
redemptions. In recent months investors
received over $30 billion in such assets.
These cash flows helped maintain indi-
vidual retail investor demand in recent
months. Additionally, major institu-
tional investors, such as certain insur-
ance companies whose underwriting
profits were cyclically high, demonstra-
ted significant ongoing interest in the
tax-exempt bond market, particularly
on higher-quality securities. Individual
and institutional investor demand was
strong enough during the six-month
period ended April 30, 1996 to absorb
the relative increase in bond issuance.
Looking ahead, we believe the munici-
pal bond market is likely to continue
to outperform the US Treasury market.
Investor demand should remain adequate
to absorb new bond issuance. It is also
unlikely that the rapid pace of issuance
seen thus far in 1996 will be maintained.
The recent rise in yields made further
bond refinancings economically unfeasi-
ble. Since these refinancings were the
driving force of recent bond issuance, as
the amount of these refundings decline,
overall issuance should decline. This
should allow the current demand/sup-
ply balance to be easily maintained in
upcoming months.
<PAGE>
Additionally, as a percentage of US Treas-
ury bond yields, long-term municipal
bond yields remain historically attrac-
tive. It is likely that recent interest rate
increases will have a negative impact on
economic growth, perhaps as early as
late summer 1996. With long-term
mortgage rates above 8%, the domestic
housing sector has already indicated
signs of slower growth. If other interest
rate sectors of the economy, such as
the automobile industry, begin to show
similar adverse effects, taxable interest
rates would be poised to resume their
decline. With long-term tax-exempt rev-
enue bonds yielding approximately 90%
of their taxable counterparts, municipal
bond yields are poised to decline further.
Portfolio Strategy
We entered the six-month period ended
April 30, 1996 very optimistic that inter-
est rates would decline. This optimism
was based on the belief that the econ-
omy was slowing and that advances on a
balanced Federal budget agreement
would be beneficial to the fixed-income
markets. To take advantage of this antic-
ipated decline in interest rates, we
decreased cash reserves to 1% of net
assets, and increased the Fund's dura-
tion. This strategy benefited the port-
folio's performance as long-term interest
rates declined over 30 basis points
through the end of December.
The new year brought the beginning of
a reversal in the trend of lower inter-
est rates. By late February, signs of a
strengthening economy began to under-
mine investor confidence in the fixed-
income market. In March an explosive
employment report seemed to confirm a
surge in the growth of the US economy,
and yields began to rise rapidly. Prior
to the back up in yields, we gradually
increased the Fund's cash reserves while
decreasing its duration. This strategy
enabled the Fund to be less sensitive to
the significant back up in yields experi-
enced in the fixed-income markets. One
other positive factor for the Fund during
this back up in yields was that municipal
bonds significantly outperformed US
Treasury securities.
<PAGE>
Because of the various influences that
affected the economy, such as the severe
winter weather and the Government
shutdowns, the economic data released
so far in 1996 was cloudy and subject to
many interpretations, but overall
pointed to a stronger economy. The data
suggested that the economy may be
picking up steam, which warrants a cau-
tious approach to the market until a
clearer view of the economy's direction
emerges. Looking ahead, the Fund will
maintain its cautious approach to the
market until a clearer path for interest
rates becomes evident.
In Conclusion
We appreciate your ongoing interest in
MuniVest California Insured Fund, Inc.,
and we look forward to serving your
investment needs and objectives in the
months and years to come.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President
<PAGE>
(Roberto Roffo)
Roberto Roffo
Vice President and Portfolio Manager
May 28, 1996
We are pleased to announce that Roberto
Roffo is responsible for the day-to-day
management of MuniVest California
Insured Fund, Inc. Mr. Roffo has been
employed by Merrill Lynch Asset
Management, L.P. (an affiliate of the
Fund's investment adviser) since 1992
and as Vice President since 1996. Prior
thereto, he was Operations Manager
with State Street Bank and Trust
Company from 1989 to 1992.
Portfolio
Abbreviations
To simplify the listings of MuniVest 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
INFLOS Inverse Floating Rate Municipal Bonds
RIB Residual Interest Bonds
S/F Single-Family
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>
California--100.6% AAA Aaa $ 2,485 California Health Facilities Financing Authority, Insured
Revenue Bonds (Children's Hospital of San Diego), 7% due
7/01/2000 (d) (h) $ 2,763
AA- Aa 2,500 California HFA, Home Mortgage Revenue Bonds, AMT, Series F-1,
7% due 8/01/2026 2,586
AA- Aa 2,000 California HFA, Revenue Bonds, RIB, AMT, 9.237% due 8/01/2023 (e) 2,020
A1+ VMIG1++ 5,200 California Pollution Control Financing Authority, Solid Waste
Disposal Revenue Bonds (Shell Oil Co.--Martinez Project),
VRDN, AMT, Series A, 3.80% due 10/01/2024 (a) 5,200
NR* Aaa 670 California Rural Home Mortgage Finance Authority, S/F Mortgage
Revenue Bonds (Mortgage-Backed Securities Program), AMT,
Series A-2, 7.95% due 12/01/2024 (f) (i) 749
AA Aa 1,000 California State Department of Water Resources, Water System
Revenue Bonds (Central Valley Project), Series O, 5% due
12/01/2022 864
AAA Aaa 1,000 California State, GO, 4.75% due 9/01/2018 (g) 832
California State Public Works Board, Lease Revenue Bonds,
Series A:
A- A 3,500 (Department of Corrections--Monterey County), 7% due 11/01/2019 3,810
AAA Aaa 2,500 (Various University of California Projects), 6.40% due
12/01/2016 (b) 2,600
AAA Aaa 2,000 California State University, Housing System Revenue Refunding
Bonds, 5.90% due 11/01/2021 (c) 1,977
AA Aa 2,000 California Statewide Community Development Authority Revenue Bonds,
COP (Saint Joseph Health System Group), 6.625% due 7/01/2021 2,080
AAA Aaa 2,000 Central Coast Water Authority, California, Revenue Bonds
(Water Project Regional Facilities), 6.60% due 10/01/2022 (b) 2,124
AAA Aaa 1,990 Compton, California, Community Redevelopment Agency, Tax
Allocation Refunding Bonds (Compton Redevelopment Project),
Series A, 6.50% due 8/01/2013 (g) 2,112
<PAGE>
AAA Aaa 2,000 Cucamonga County, California, Water District Facilities
Refinancing Bonds, COP, 6.50% due 9/01/2022 (c) 2,082
AAA Aaa 5,000 Culver City, California, Redevelopment Finance Authority,
Tax Allocation Revenue Refunding Bonds, 5.50% due 11/01/2014 (b) 4,864
AAA Aaa 2,050 Elk Grove, California, Unified School District, Special Tax
Refunding Bonds (Community Facilities District No. 1), 5.60%++++
due 12/01/2017 (b) 554
Fresno, California, Sewer Revenue Bonds:
AAA Aaa 1,000 (Fowler Avenue Project), Series A, 6.25% due 8/01/2011 (b) 1,038
AAA Aaa 3,000 Series A, 4.75% due 9/01/2026 (d) 2,461
AAA Aaa 500 Series A-1, 6.25% due 9/01/2014 (b) 535
AAA Aaa 1,000 Series A-1, 5.25% due 9/01/2019 (b) 925
AA Aa 1,035 Long Beach, California, Water Revenue Refunding Bonds,
6.25% due 5/01/2024 1,057
Los Angeles, California, Community Redevelopment Agency,
Tax Allocation Refunding Bonds (Bunker Hill), Series H (g):
AAA Aaa 1,500 6.50% due 12/01/2015 1,576
AAA Aaa 3,500 6.50% due 12/01/2016 3,678
AA Aa 3,000 Los Angeles, California, Harbor Department Revenue Bonds, AMT,
Series B, 6.625% due 8/01/2025 3,124
AAA Aaa 2,900 Los Angeles, California, Wastewater System Revenue Refunding
Bonds, Series D, 4.70% due 11/01/2017 (c) 2,417
AAA Aaa 7,335 Los Angeles County, California, COP (Correctional Facilities
Project), 6.50% due 9/01/2013 (d) 7,682
AAA Aaa 2,250 Los Angeles County, California, Metropolitan Transportation
Authority, Sales Tax Revenue Bonds (Proposition C), Senior
Series B, 4.75% due 7/01/2018 (b) 1,876
AAA Aaa 1,000 Los Angeles County, California, Transportation Commission, Sales
Tax Revenue Bonds, Series A, 6.75% due 7/01/2001 (c) (h) 1,115
M--S--R Public Power Agency, California, Revenue Bonds (San Juan
Project) (d):
AAA Aaa 1,500 Refunding, 6.75% due 7/01/2020 1,665
AAA Aaa 2,000 Series E, 6.75% due 7/01/2011 2,139
AAA Aaa 1,000 Metropolitan Water District, Southern California Waterworks,
Revenue Refunding Bonds, Series B, 4.75% due 7/01/2021 (d) 833
AAA Aaa 1,000 Oakland, California, Redevelopment Agency Refunding Bonds,
INFLOS, 8.321% due 9/01/2019 (d) (e) 955
<PAGE>
AAA Aaa 2,750 Oceanside, California, COP (Watereuse Association, California,
Financing Project), Series A, 6.50% due 10/01/2017 (b) 2,877
A+ A1 2,000 Pasadena, California, COP, Refunding (Old Pasadena Package
Facility Project), 6.25% due 1/01/2018 2,050
AAA Aaa 5,000 Pioneers Memorial Hospital District, California, Refunding,
GO, UT, 6.50% due 10/01/2024 (b) 5,255
AAA Aaa 2,000 Port Oakland, California, Port Revenue Bonds, AMT, Series E,
6.50% due 11/01/2016 (d) 2,054
AAA Aaa 3,000 Rancho Cucamonga, California, Redevelopment Agency, Tax Allocation
Bonds (Rancho Redevelopment Project), 6.75% due 9/01/2020 (d) 3,187
A+ Aa 1,500 Sacramento, California, City Financing Authority, Lease Revenue
Refunding Bonds, Series B, 5.40% due 11/01/2020 1,385
AAA Aaa 4,000 Sacramento, California, Municipal Utilities District, Electric
Revenue Bonds, Series B, 6.375% due 8/15/2022 (d) 4,141
AAA Aaa 1,000 Sacramento County, California, COP, GO, 6.50% due 6/01/2015 (d) 1,038
San Francisco, California, City and County Airport Commission,
International Airport Revenue Bonds, Second Series:
AAA Aaa 2,000 AMT, Issue 5, 6.50% due 5/01/2019 (c) 2,050
AAA Aaa 2,000 AMT, Issue 6, 6.60% due 5/01/2020 (b) 2,065
AAA Aaa 2,000 Refunding, Issue 2, 6.75% due 5/01/2013 (d) 2,163
San Francisco, California, City and County Redevelopment Agency,
Lease Revenue Bonds (George R. Moscone Convention Center) (g):
AAA Aaa 2,800 6.75% due 7/01/2015 3,035
AAA Aaa 1,500 6.75% due 7/01/2024 1,623
AAA VMIG1++ 3,800 San Jose-Santa Clara, California, Water Financing Authority,
Sewer Revenue Bonds, VRDN, Series B, 3.85% due 11/15/2020 (a) (c) 3,800
AAA Aaa 2,450 San Mateo County, California, Joint Powers Financing Authority,
Lease Revenue Refunding Bonds (Capital Projects Program),
5.125% due 7/01/2018 (d) 2,225
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
<CAPTION>
S&P Moody's Face Value
STATE Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
California AAA Aaa $ 1,000 Southern California Public Power Authority, Power Project
(concluded) Revenue Refunding Bonds (Mead Adelanto Project), Series A,
4.875% due 7/01/2020 (b) $ 845
AAA Aaa 3,500 Stockton, California, Revenue Bonds (Wastewater Treatment
Plant Expansion), COP, Series A, 6.70% due 9/01/2014 (c) 3,765
AAA Aaa 1,500 Vacaville, California, Public Financing Authority,
Tax Allocation Revenue Refunding Bonds (Vacaville
Redevelopment Projects), 6.35% due 9/01/2022 (d) 1,539
AAA Aaa 1,500 Walnut, California, Public Financing Authority, Tax Allocation
Revenue Refunding Bonds (Walnut Improvement Project),
6.50% due 9/01/2022 (d) 1,568
AAA Aaa 1,000 Walnut Creek, California, COP, Refunding (John Muir Medical
Center), 5% due 2/15/2016 (d) 880
Puerto Rico-- A1+ VMIG1++ 1,500 Puerto Rico Commonwealth, Highway and Transportation Authority,
1.3% Highway Revenue Bonds, VRDN, Series X, 3.75% due 7/01/1999 (a) 1,500
Total Investments (Cost--$117,312)--101.9% 119,338
Liabilities in Excess of Other Assets--(1.9%) (2,269)
--------
Net Assets--100.0% $117,069
========
<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
April 30, 1996.
(b)AMBAC Insured.
(c)FGIC Insured.
(d)MBIA Insured.
(e)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 April 30, 1996.
(f)GNMA Collateralized.
(g)FSA Insured.
(h)Prerefunded.
(i)FHLMC Insured.
*Not Rated.
++Highest short-term rating by Moody's Investors Service, Inc.
++++Represents a zero coupon bond; the interest rate shown is the effective
yield at the time of purchase by the Fund.
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF ASSETS, LIABILITIES AND CAPITAL
<CAPTION>
As of April 30, 1996
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$117,311,603) (Note 1a) $119,338,022
Cash 62,535
Interest receivable 1,964,779
Deferred organization expenses (Note 1e) 13,548
Prepaid expenses and other assets 7,439
------------
Total assets 121,386,323
------------
Liabilities: Payables:
Securities purchased $ 4,097,715
Dividends to shareholders (Note 1f) 123,658
Investment adviser (Note 2) 48,211 4,269,584
------------
Accrued expenses and other liabilities 47,258
------------
Total liabilities 4,316,842
------------
Net Assets: Net assets $117,069,481
============
Capital: Capital Stock (200,000,000 shares authorized) (Note 4):
Preferred Stock, par value $.10 per share (1,600 shares of AMPS* issued
and outstanding at $25,000 per share liquidation preference) $ 40,000,000
Common Stock, par value $.10 per share (5,961,365 shares issued and outstanding) $ 596,136
Paid-in capital in excess of par 82,965,863
Undistributed investment income--net 406,542
Accumulated realized capital losses on investments--net (Note 5) (8,925,479)
Unrealized appreciation on investments--net 2,026,419
------------
Total--Equivalent to $12.93 net asset value per share of Common Stock (market
price--$12.50) 77,069,481
------------
Total capital $117,069,481
============
<FN>
*Auction Market Preferred Stock.
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For the Six Months Ended April 30, 1996
<S> <S> <C> <C>
Investment Interest and amortization of premium and discount earned $ 3,484,789
Income
(Note 1d):
Expenses: Investment advisory fees (Note 2) $ 301,093
Commission fees (Note 4) 50,051
Professional fees 35,378
Transfer agent fees 22,170
Accounting services (Note 2) 21,869
Printing and shareholder reports 20,592
Directors' fees and expenses 11,216
Listing fees 8,098
Custodian fees 5,092
Pricing fees 2,799
Amortization of organization expenses (Note 1e) 2,687
Other 7,929
------------
Total expenses 488,974
------------
Investment income--net 2,995,815
------------
Realized & Realized gain on investments--net 773,699
Unrealized Change in unrealized appreciation on investments--net (3,479,311)
Gain (Loss) ------------
on Invest- Net Increase in Net Assets Resulting from Operations $ 290,203
ments--Net ============
(Notes
1b, 1d & 3):
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the For the
Six Months Year Ended
April 30, October 31,
Increase (Decrease) in Net Assets: 1996 1995
<S> <C> <C>
Operations: Investment income--net $ 2,995,815 $ 6,119,609
Realized gain (loss) on investments--net 773,699 (3,594,227)
Change in unrealized appreciation/depreciation on investments--net (3,479,311) 13,039,828
------------ ------------
Net increase in net assets resulting from operations 290,203 15,565,210
------------ ------------
Dividends to Investment income--net:
Shareholders Common Stock (2,347,961) (4,602,835)
(Note 1f): Preferred Stock (693,328) (1,492,944)
------------ ------------
Net decrease in net assets resulting from dividends to shareholders (3,041,289) (6,095,779)
------------ ------------
Net Assets: Total increase (decrease) in net assets (2,751,086) 9,469,431
Beginning of period 119,820,567 110,351,136
------------ ------------
End of period* $117,069,481 $119,820,567
============ ============
<FN>
*Undistributed investment income--net $ 406,542 $ 452,016
============ ============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
The following per share data and ratios have been derived For the Six For the Period
from information provided in the financial statements. Months Ended For the April 30, 1993++
April 30, Year Ended October 31, to October 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 $ 13.39 $ 11.80 $ 15.01 $ 14.18
Operating --------- ---------- --------- ---------
Performance: Investment income--net .50 1.03 1.01 .48
Realized and unrealized gain (loss) on investments--net (.45) 1.58 (3.13) .91
--------- ---------- --------- ---------
Total from investment operations .05 2.61 (2.12) 1.39
--------- ---------- --------- ---------
Less dividends and distributions to Common Stock
shareholders:
Investment income--net (.39) (.77) (.82) (.34)
Realized gain on investments--net -- -- (.07) --
--------- ---------- --------- ---------
Total dividends and distributions to Common Stock
shareholders (.39) (.77) (.89) (.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 (.12) (.25) (.20) (.06)
Realized gain on investments--net -- -- (.01) --
Capital charge resulting from issuance of Preferred Stock -- -- .01 (.13)
--------- ---------- --------- ---------
Total effect of Preferred Stock activity (.12) (.25) (.20) (.19)
--------- ---------- --------- ---------
Net asset value, end of period $ 12.93 $ 13.39 $ 11.80 $ 15.01
========= ========== ========= =========
Market price per share, end of period $ 12.50 $ 11.875 $ 10.50 $ 14.75
========= ========== ========= =========
<PAGE>
Total Based on market price per share 8.59%++ 20.89% (23.56%) .64%+++
Investment ========= ========== ========= =========
Return:** Based on net asset value per share (.38%)++ 21.30% (15.58%) 8.34%+++
========= ========== ========= =========
Ratios to Expenses, net of reimbursement .81%* .81% .76% .41%*
Average Net ========= ========== ========= =========
Assets:*** Expenses .81%* .81% .81% .83%*
========= ========== ========= =========
Investment income--net 4.96%* 5.33% 5.06% 4.82%*
========= ========== ========= =========
Supplemental Net assets, net of Preferred Stock, end of period
Data: (in thousands) $ 77,069 $ 79,821 $ 70,351 $ 89,497
========= ========== ========= =========
Preferred Stock outstanding, end of period (in thousands) $ 40,000 $ 40,000 $ 40,000 $ 40,000
========= ========== ========= =========
Portfolio turnover 40.93% 90.41% 81.53% 38.34%
========= ========== ========= =========
Leverage: Asset coverage per $1,000 $ 2,927 $ 2,996 $ 2,759 $ 3,237
========= ========== ========= =========
Dividends Investment income--net $ 433 $ 933 $ 760 $ 239
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 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 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 California Insured Fund, Inc. (the "Fund") is registered
under the Investment Company Act of 1940 as a non-diversified,
closed-end management investment company. These unaudited
financial statements reflect all adjustments which are, in the opinion
of management, necessary to a fair statement of the results for the
interim period presented. All such adjustments are of a normal recur-
ring nature. The Fund determines and makes available for publica-
tion 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 MVC. 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 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 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.
<PAGE>
* 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.
* 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 trans-
actions 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 beginning
with the commencement of operations of the Fund.
(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.
<PAGE>
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 sub-
sidiary 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 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 six months ended April 30, 1996 were $47,480,994 and
$50,979,792, respectively.
Net realized and unrealized gains (losses) as of April 30, 1996 were
as follows:
Realized Unrealized
Gains (Losses) Gains
Long-term investments $600,348 $2,026,419
Short-term investments (384) --
Financial futures contracts 173,735 --
-------- ----------
Total $773,699 $2,026,419
======== ==========
As of April 30, 1996, net unrealized appreciation for Federal income
tax purposes aggregated $2,026,419, of which $3,254,408 related to
appreciated securities and $1,227,989 related to depreciated secu-
rities. The aggregate cost of investments at April 30, 1996 for Federal
income tax purposes was $117,311,603.
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.
<PAGE>
Common Stock
For the six months ended April 30, 1996, shares issued and outstanding
remained constant at 5,961,365. At April 30, 1996, total paid-in
capital amounted to $83,561,999.
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 April 30, 1996 was 3.79%.
As of April 30, 1996 there were 1,600 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 six months ended
April 30, 1996, MLPF&S, an affiliate of FAM, earned $38,828 as
commissions.
5. Capital Loss Carryforward:
At October 31, 1995, the Fund had a net capital loss carryforward of
approximately $8,322,000, of which $6,105,000 expires in 2002 and
$2,217,000 expires in 2003. This amount will be available to offset
like amounts of any future taxable gains.
6. Subsequent Event:
On May 10, 1996, the Fund's Board of Directors declared an
ordinary income dividend to Common Stock shareholders in the
amount of $0.061836 per share, payable on May 30, 1996 to share-
holders of record as of May 21, 1996.
