MUNIVEST
PENNSYLVANIA
INSURED
FUND
FUND LOGO
Annual Report
October 31, 1996
Officers and Trustees
Arthur Zeikel, President and Trustee
James H. Bodurtha, Trustee
Herbert I. London, Trustee
Robert R. Martin, Trustee
Joseph L. May, Trustee
Andre F. Perold, 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>
Transfer Agents
Common Shares:
The Bank of New York
101 Barclay Street
New York, NY 10286
Preferred Shares:
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
MVP
This report, including the financial information herein, is
transmitted to the shareholders of MuniVest Pennsylvania 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 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.
MuniVest Pennsylvania
Insured Fund
Box 9011
Princeton, NJ
08543-9011
Printed on post-consumer recycled paper
<PAGE>
MUNIVEST PENNSYLVANIA INSURED FUND
The Benefits and
Risks of
Leveraging
MuniVest Pennsylvania 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
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 Shares will be reduced or eliminated completely. At the same
time, the market value on 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>
Important Tax
Information
(unaudited)
All of the net investment income distributions paid by MuniVest
Pennsylvania Insured Fund 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 Shares of MuniVest
Pennsylvania Insured Fund earned $0.721 per share income dividends,
which included earned and unpaid dividends of $0.060. This
represents a net annualized yield of 5.69%, based on a month-end net
asset value of $12.68 per share. Over the same period, the total
investment return on the Fund's Common Shares was +4.32%, based on a
change in per share net asset value from $12.91 to $12.68, and
assuming reinvestment of $0.724 per share income dividends.
For the six-month period ended October 31, 1996, the total
investment return on the Fund's Common Shares was +5.56%, based on a
change in per share net asset value from $12.38 to $12.68, and
assuming reinvestment of $0.355 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 3.35%.
The Environment
Investor perceptions regarding the direction of the US economy
shifted over the course of the six-month period ended October 31,
1996. Throughout the summer months, concerns of an overheating
economy and spiraling inflation dominated the financial markets as
investors focused on the increasing possibility of monetary policy
tightening by the Federal Reserve Board. However, as it became
apparent that inflationary pressures were still under control--and
when the Federal Reserve Board did not tighten monetary policy at
its September 24 meeting--the investment outlook became more
positive. These developments, coupled with several economic data
releases that showed growth was at or below expectations, helped to
assuage investors' concerns about an overheating economy. Stock and
bond prices improved, with most broad-based stock market averages
reaching historic high levels. However, one factor potentially
overshadowing investor enthusiasm is the possibility that corporate
profits may have peaked for this economic cycle.
<PAGE>
The US economy clearly has slowed from its strong growth rate during
the first half of 1996. Gross domestic product (GDP) growth is
slowing, labor-cost pressures are subsiding, consumer confidence is
easing, and commodity prices are dropping. Investors are also
anticipating that President Clinton's re-election, combined with
continued Republican majorities in the House of Representatives and
the Senate, will prove positive for the nation's budget deficit. As
1996 draws to a close, investors are likely to continue to focus on
the economy. Evidence of continued growth at a non-inflationary pace
would be positive for the US capital markets.
The Municipal Market and
Portfolio Strategy
During the past 12 months, the municipal bond market was extremely
volatile. As measured by the Bond Buyer Revenue Bond Index, long-
term tax-exempt bond yields ranged from a low of 5.63% on January 4,
1996 to a high of 6.34% on June 13, 1996. At year-end October 31,
1996, the Index was roughly back to the levels at which it began the
period, having retraced the losses associated with a surge in
economic growth during the first six months of the calendar year.
The change in direction of long-term interest rates occurred as a
result of the slower economic pace exhibited during the third
quarter of 1996. The change of pace led investors to alter the
consensus view of future monetary policy from that of a tightening
to no change. Since August, prices of long-term fixed-income
securities have risen modestly while short-term securities have
reacted more dramatically.
During the 12 months ended October 31, 1996, we sought to provide a
generous level of tax-exempt income for shareholders without
sacrificing the strong credit quality characteristics of the
portfolio. We ended the prior year constructive on the interest rate
environment and extended the duration of the portfolio by purchasing
securities which we believed would enhance the total return to the
shareholder in a period of declining interest rates. However, strong
job growth led an economic revival from February through July which
forced a major change in investor psychology. We shifted the
portfolio to a more defensive posture to protect the net asset value
as yields on long-term municipal bonds surged approximately 0.75%
between January and mid-June. Since peaking in June, interest rates
have declined somewhat as the economy has shown early signs of
cooling. We shifted to a more neutral posture once again. By
remaining fully invested during the period, we were able to provide
an attractive dividend while limiting interest rate risk.
For the 12-month period ended October 31, 1996, the Fund experienced
a 3.97% increase in cumulative total return versus an average
increase of 5.95% for all Pennsylvania tax-exempt closed-end
leveraged bond funds as reported by Lipper Analytical Services, Inc.
The Fund's Common Shares also produced a 5.71% yield for the 12-
month period ended October 31, 1996 as compared to the industry
average of 5.84% as reported by Lipper Analytical Services, Inc.
<PAGE>
In Conclusion
We appreciate your ongoing interest in MuniVest Pennsylvania Insured
Fund, and we look forward to assisting you with your financial needs
in the months and years ahead.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President
(William M. Petty)
William M. Petty
Portfolio Manager
November 27, 1996
Proxy Results
<TABLE>
During the six-month period ended October 31, 1996, MuniVest
Pennsylvania Insured Fund Common Shareholders voted on the following
proposals. The proposals were approved at a special shareholders'
meeting on September 19, 1996. The description of each proposal and
number of shares voted are as follows:
<CAPTION>
Shares Voted Shares Voted
For Without Authority
<S> <S> <C> <C>
1. To elect the Fund's Board of Trustees: Herbert I. London 3,858,141 69,981
Robert R. Martin 3,858,494 69,628
Andre F. Perold 3,858,494 69,628
Arthur Zeikel 3,856,341 71,781
<CAPTION>
<PAGE>
Shares Voted Shares Voted Shares Voted
For Against Abstain
<S> <C> <C> <C>
2. To select Deloitte & Touche LLP as the Fund's independent auditors. 3,853,281 19,842 54,999
<CAPTION>
During the six-month period ended October 31, 1996, MuniVest
Pennsylvania Insured Fund Preferred Shareholders voted on the
following proposals. The proposals were approved at a special
shareholders' meeting on September 19, 1996. The description of each
proposal and number of shares voted are as follows:
Shares Voted Shares Voted
For Without Authority
<S> <S> <C> <C>
1. To elect the Fund's Board of Trustees: James H. Bodurtha 909 68
Herbert I. London 909 68
Robert R. Martin 909 68
Joseph L. May 909 68
Andre F. Perold 909 68
Arthur Zeikel 909 68
<CAPTION>
Shares Voted Shares Voted Shares Voted
For Against Abstain
<S> <C> <C> <C>
2. To select Deloitte & Touche LLP as the Fund's independent auditors. 909 52 16
</TABLE>
Portfolio
Abbreviations
To simplify the listings of MuniVest Pennsylvania 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)
GO General Obligation Bonds
HFA Housing Finance Agency
IDA Industrial Development Authority
PCR Pollution Control Revenue Bonds
S/F Single Family
UT Unlimited Tax
VRDN Variable Rate Demand Notes
YCN Yield Curve 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>
Pennsylvania-- Allegheny County, Pennsylvania, Hospital Development
93.9% Authority Revenue Bonds:
A1 VMIG1++ $ 500 (Presbyterian Health Center), VRDN, Series A, 3.50%
due 3/01/2020 (a)(b) $ 500
AAA Aaa 2,000 Refunding (Pittsburgh Mercy Health System), 5.625%
due 8/15/2026 (d) 1,964
NR* A1 200 Allegheny County, Pennsylvania, IDA, Revenue Refunding
Bonds (Commercial Development Parkway Center Mall
Project), VRDN, Series A, 3.85% due 5/01/2009 (a) 200
AAA Aaa 1,600 Altoona, Pennsylvania, City Authority, Water Revenue Bonds,
Series A, 6.50% due 11/01/2019 (c) 1,752
AAA Aaa 3,000 Bethlehem, Pennsylvania, Water Authority Revenue Refunding Bonds,
6.25% due 11/15/2001 (b)(g) 3,237
AAA Aaa 2,550 Blair County, Pennsylvania, Hospital Authority Revenue Bonds
(Altoona Hospital Project), 6.375% due 7/01/2013 (d) 2,703
AAA Aaa 1,000 Bucks County, Pennsylvania, IDA, Revenue Refunding Bonds
(Grand View Hospital), Series A, 5.25% due 7/01/2021 (d) 929
AAA Aaa 1,590 Bucks County, Pennsylvania, Water and Sewer Authority, Sewer
System Revenue Bonds, 6.75% due 12/01/2019 (c) 1,757
AAA Aaa 2,000 Delaware County, Pennsylvania, IDA, PCR (Philadelphia Electric
Company Project), Series A, 7.375% due 4/01/2021 (d) 2,253
AAA Aaa 2,225 Ephrata, Pennsylvania, Area School District, GO, UT, 5.75% due
10/15/2013 (c) 2,262
AAA Aaa 5,000 Exeter Township, Pennsylvania, Sewer Authority Revenue
Refunding Bonds (Berks County), 6.20% due 7/15/2022 (b) 5,159
AAA Aaa 2,750 Hampton Township, Pennsylvania, School District, GO, UT,
6.75% due 11/15/2004 (d)(g) 3,106
AAA Aaa 3,280 Johnstown, Pennsylvania, Refunding Bonds, UT, 6.45% due
10/01/2019 (c) 3,504
<PAGE>
A A 1,730 Lehigh County, Pennsylvania, General Purpose Authority Revenue
Bonds (Muhlenberg Hospital Center), Series B, 5.75% due 7/15/2010 1,711
Lehigh County, Pennsylvania, IDA, PCR, Refunding (Pennsylvania
Power & Light Company Project), Series A (b):
AAA Aaa 3,000 6.40% due 11/01/2021 3,197
AAA Aaa 2,575 5.50% due 2/15/2027 2,497
AAA Aaa 3,000 Luzerne County, Pennsylvania, IDA, Exempt Facilities Revenue
Refunding Bonds (Pennsylvania Gas & Water Company Project), AMT,
Series A, 7% due 12/01/2017 (d) 3,375
AAA NR* 1,200 Montgomery County, Pennsylvania, Higher Education and Health
Authority, Revenue Refunding Bonds (Saint Joseph's University),
6.50% due 12/15/2022 (h) 1,296
AAA Aaa 3,000 North Penn, Pennsylvania, Water Authority Revenue Bonds,
7% due 11/01/2004 (c)(g) 3,457
AAA Aaa 1,000 Northeastern, Pennsylvania, Hospital and Education Authority,
College Revenue Bonds (Luzerne County Community College), 6.625%
due 8/15/2015 (d) 1,089
BBB+ Baa1 2,500 Pennsylvania Economic Development Financing Authority, Wastewater
Treatment Revenue Bonds (Sun Company Inc.--R & M Project), AMT,
Series A, 7.60% due 12/01/2024 2,783
AAA Aaa 3,000 Pennsylvania State, GO, Refunding, UT, 5.375% due 11/15/2003 (c) 3,127
AA+ Aa 2,500 Pennsylvania State, HFA, S/F Mortgage, Series 39B, AMT, 6.875%
due 10/01/2024 2,635
AAA Aaa 4,000 Pennsylvania State Higher Educational Assistance Agency, Student
Loan Revenue Bonds, AMT, Series C, 7.15% due 9/01/2021 (d) 4,268
AAA Aaa 2,005 Pennsylvania State Higher Educational Facilities Authority,
Health Services Revenue Refunding Bonds (Allegheny Delaware
Valley), Series A, 5.875% due 11/15/2021 (b) 2,023
AAA Aaa 2,000 Philadelphia, Pennsylvania, Water and Wastewater Revenue
Refunding Bonds, 5% due 6/15/2019 (b) 1,816
AAA Aaa 4,500 Pittsburgh, Pennyslvania, Water and Sewer Authority, Water and
Sewer System Revenue Bonds, First Lien, Series A, 5.60% due
9/01/2022 (c) 4,439
AAA Aaa 2,000 Solanco, Pennsylvania, School District, GO, UT, 6.30% due
2/15/2014 (c) 2,116
AAA Aaa 3,000 Somerset County, Pennsylvania, General Authority, Commonwealth
Lease Revenue Bonds, 6.25% due 10/15/2001 (c)(g) 3,234
<PAGE>
AA+ Aa1 1,350 Swarthmore Boro Authority, Pennsylvania College Revenue
Refunding Bonds, 6% due 9/15/2020 1,371
Puerto Rico-- AAA Aaa 1,500 Commonwealth of Puerto Rico, GO, YCN, 8.022% due 7/01/2020 (e)(f) 1,517
1.9%
Total Investments (Cost--$71,658)--95.8% 75,277
Other Assets Less Liabilities--4.2% 3,273
-------
Net Assets--100.0% $78,550
=======
<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)MBIA Insured.
(c)FGIC Insured.
(d)AMBAC Insured.
(e)FSA Insured.
(f)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.
(g)Prerefunded.
(h)Connie Lee Insured.
*Not Rated.
++Highest short-term rating by Moody's Investors Service, Inc.
Ratings of issues shown have not been audited by Deloitte & Touche LLP.
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF ASSETS, LIABILITIES AND CAPITAL
<CAPTION>
As of October 31, 1996
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$71,658,465) (Note 1a) $ 75,276,774
Cash 139,651
Receivables:
Securities sold $ 2,002,425
Interest 1,291,120 3,293,545
------------
Deferred organization expenses (Note 1e) 22,300
Prepaid expenses and other assets 5,578
------------
Total assets 78,737,848
------------
<PAGE>
Liabilities: Payables:
Dividends to shareholders (Note 1f) 67,332
Investment adviser (Note 2) 33,148 100,480
------------
Accrued expenses and other liabilities 87,696
------------
Total liabilities 188,176
------------
Net Assets: Net assets $ 78,549,672
============
Capital: Capital Shares (unlimited number of shares authorized) (Note 4):
Preferred Shares, par value $.05 per share (1,100 shares of AMPS*
issued and outstanding at $25,000 per share liquidation
preference) $ 27,500,000
Common Shares, par value $.10 per share (4,024,856 shares
issued and outstanding) $ 402,486
Paid-in capital in excess of par 55,795,642
Undistributed investment income--net 269,382
Accumulated realized capital losses on investments--net (Note 5) (9,036,147)
Unrealized appreciation on investments--net 3,618,309
------------
Total--Equivalent to $12.68 net asset value per Common Share
(market price--$11.625) 51,049,672
------------
Total capital $ 78,549,672
============
<FN>
*Auction Market Preferred Shares.
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 $ 4,584,654
Income (Note 1d):
<PAGE>
Expenses: Investment advisory fees (Note 2) $ 393,137
Commission fees (Note 4) 71,126
Professional fees 66,916
Accounting services (Note 2) 50,554
Printing and shareholder reports 41,960
Transfer agent fees 33,401
Trustees' fees and expenses 22,997
Amortization of organization expenses (Note 1e) 12,833
Custodian fees 7,896
Listing fees 10,320
------------
Total expenses 711,140
------------
Investment income--net 3,873,514
------------
Realized & Unreal- Realized loss on investments--net (886,000)
ized Gain (Loss) Change in unrealized appreciation on investments--net 109
on Investments-- ------------
Net (Notes 1b, Net Increase in Net Assets Resulting from Operations $ 2,987,623
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 $ 3,873,514 $ 4,074,200
Realized loss on investments--net (886,000) (3,458,573)
Change in unrealized appreciation on investments--net 109 8,950,224
------------ ------------
Net increase in net assets resulting from operations 2,987,623 9,565,851
------------ ------------
Dividends to Investment income--net:
Shareholders Common Shares (2,910,646) (3,026,364)
(Note 1f): Preferred Shares (966,790) (1,062,765)
------------ ------------
Net decrease in net assets resulting from dividends
to shareholders (3,877,436) (4,089,129)
------------ ------------
<PAGE>
Capital Share Value of shares issued to Common Shareholders in reinvestment
Transactions of dividends 72,730 --
(Note 4): ------------ ------------
Net increase in net assets derived from capital share
transactions 72,730 --
------------ ------------
Net Assets: Total increase (decrease) in net assets (817,083) 5,476,722
Beginning of year 79,366,755 73,890,033
------------ ------------
End of year* $ 78,549,672 $ 79,366,755
============ ============
<FN>
*Undistributed investment income--net $ 269,382 $ 273,304
============ ============
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
For the
Period
The following per share data and ratios have been derived July 30,
from information provided in the financial statements. 1993++ to
For the Year Ended 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 $ 12.91 $ 11.54 $ 14.70 $ 14.18
Operating -------- -------- -------- --------
Performance: Investment income--net .97 1.01 1.05 .25
Realized and unrealized gain (loss) on
investments--net (.23) 1.37 (3.08) .64
-------- -------- -------- --------
Total from investment operations .74 2.38 (2.03) .89
-------- -------- -------- --------
Less dividends and distributions to Common
Shareholders:
Investment income--net (.73) (.75) (.86) (.13)
Realized gain on investments--net -- -- (.06) --
-------- -------- -------- --------
Total dividends and distributions to
Common Shareholders (.73) (.75) (.92) (.13)
-------- -------- -------- --------
<PAGE> Capital charge resulting from issuance
of Common Shares -- -- -- (.05)
-------- -------- -------- --------
Effect of Preferred Share activity:++++
Dividends and distributions to Preferred Shareholders:
Investment income--net (.24) (.26) (.20) (.03)
Realized gain on investments--net -- -- (.01) --
Capital charge resulting from issuance of
Preferred Shares -- -- -- (.16)
-------- -------- -------- --------
Total effect of Preferred Share activity (.24) (.26) (.21) (.19)
-------- -------- -------- --------
Net asset value, end of period $ 12.68 $ 12.91 $ 11.54 $ 14.70
======== ======== ======== ========
Market price per share, end of period $ 11.625 $ 11.875 $ 10.875 $ 15.00
======== ======== ======== ========
Total Investment Based on market price per share 3.98% 16.58% (22.20%) .92%+++
Return:** ======== ======== ======== ========
Based on net asset value per share 4.32% 19.44% (15.76%) 4.62%+++
======== ======== ======== ========
Ratios to Average Expenses, net of reimbursement .90% .83% .51% .90%*
Net Assets:*** ======== ======== ======== ========
Expenses .90% .95% .86% .90%*
======== ======== ======== ========
Investment income--net 4.91% 5.332% 5.24% 5.27%*
======== ======== ======== ========
Supplemental Net assets, net of Preferred Shares, end of period
Data: (in thousands) $ 51,050 $ 51,867 $ 46,390 $ 57,869
======== ======== ======== ========
Preferred Shares outstanding, end of
period (in thousands) $ 27,500 $ 27,500 $ 27,500 $ 27,500
======== ======== ======== ========
Portfolio turnover 113.65% 73.19% 93.00% 22.31%
======== ======== ======== ========
Leverage: Asset coverage per $1,000 $ 2,856 $ 2,886 $ 2,687 $ 3,104
======== ======== ======== ========
Dividends Investment income--net $ 879 $ 966 $ 721 $ 119
Per Shares on ======== ======== ======== ========
Preferred Stock
Outstanding:++++++
<PAGE>
<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 effect of sales loads.
***Do not reflect the effect of dividends to Preferred Shareholders.
++Commencement of Operations.
++++The Fund's Preferred Shares were issued on September 2, 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>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
MuniVest Pennsylvania 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 MVP. 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
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.
<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.
NOTES TO FINANCIAL STATEMENTS (concluded)
(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.
<PAGE>
(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.
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 $85,786,126 and
$85,831,206, respectively.
Net realized and unrealized gains (losses) as of October 31, 1996
were as follows:
Realized Unrealized
Losses Gains
Long-term investments $ (481,200) $ 3,618,309
Financial futures contracts (404,800) --
============ ============
Total $ (886,000) $ 3,618,309
============ ============
As of October 31, 1996, net unrealized appreciation for Federal
income tax purposes aggregated $3,618,309, of which $3,766,405
related to appreciated securities and $148,096 related to
depreciated securities. The aggregate cost of investments at October
31, 1996 for Federal income tax purposes was $71,658,465.
<PAGE>
4. Capital Shares Transactions:
The Fund is authorized to issue an unlimited number of shares of
beneficial interest, 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
increased by 5,823 to 4,024,856. At October 31, 1996, total paid-in
capital amounted to $56,198,128.
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%.
As of October 31, 1996, there were 1,100 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 $48,089 as
commissions.
5. Capital Loss Carryforward:
At October 31, 1996, the Fund had a net capital loss carryforward of
approximately $8,545,000, of which $4,474,000 expires in 2002,
$3,117,000 expires in 2003 and $954,000 expires in 2004. This amount
will be available to offset like amounts of any future taxable
gains.
6. Subsequent Event:
On November 8, 1996, the Fund's Board of Trustees declared an
ordinary income dividend to Common Shareholders in the amount of
$.060203 per share, payable on November 27, 1996 to shareholders of
record as of November 18, 1996.
<AUDIT-REPORT>
INDEPENDENT AUDITORS' REPORT
To the Board of Trustees and Shareholders,
MuniVest Pennsylvania Insured Fund:
We have audited the accompanying statement of assets, liabilities
and capital, including the schedule of investments, of MuniVest
Pennsylvania 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 three-year
period then ended and the period July 30, 1993 (commencement of
operations) to October 31, 1993. 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.
<PAGE>
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 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, such financial statements and financial highlights
present fairly, in all material respects, the financial position of
MuniVest Pennsylvania 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 3, 1996
</AUDIT-REPORT>
