UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-06500
Name of Fund: MuniYield New York Insured Fund, Inc.
Fund Address: P.O. Box 9011
Princeton, NJ 08543-9011
Name and address of agent for service: Terry K. Glenn, President, MuniYield New
York Insured Fund, Inc., 800 Scudders Mill Road, Plainsboro, NJ 08536.
Mailing address: P.O. Box 9011, Princeton, NJ 08543-9011
Registrant's telephone number, including area code: (609) 282-2800
Date of fiscal year end: 10/31/04
Date of reporting period: 11/01/03 - 10/31/04
Item 1 - Report to Stockholders
[LOGO] Merrill Lynch Investment Managers www.mlim.ml.com
MuniYield New York
Insured Fund, Inc.
Annual Report
October 31, 2004
[LOGO] Merrill Lynch Investment Managers
MuniYield New York Insured Fund, Inc.
The Benefits and Risks of Leveraging
MuniYield 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 in long-term municipal bonds. The interest earned on
these investments, net of dividends to Preferred Stock, 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 strong,
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 of 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.
As a part of its investment strategy, the Fund may invest in certain securities
whose potential income return is inversely related to changes in a floating
interest rate ("inverse floaters"). In general, income on inverse floaters will
decrease when short-term interest rates increase and increase when short-term
interest rates decrease. Investments in inverse floaters may be characterized as
derivative securities and may subject the Fund to the risks of reduced or
eliminated interest payments and losses of invested principal. In addition,
inverse floaters have the effect of providing investment leverage and, as a
result, the market value of such securities will generally be more volatile than
that of fixed rate, tax-exempt securities. To the extent the Fund invests in
inverse floaters, the market value of the Fund's portfolio and the net asset
value of the Fund's shares may also be more volatile than if the Fund did not
invest in such securities. As of October 31, 2004, the percentage of the Fund's
total net assets invested in inverse floaters was 11.71%, before the deduction
of Preferred Stock.
Swap Agreements
The Fund may also invest in swap agreements, which are over-the-counter
contracts in which one party agrees to make periodic payments based on the
change in market value of a specified bond, basket of bonds, or index in return
for periodic payments based on a fixed or variable interest rate or the change
in market value of a different bond, basket of bonds or index. Swap agreements
may be used to obtain exposure to a bond or market without owning or taking
physical custody of securities. Swap agreements involve the risk that the party
with whom the Fund has entered into the swap will default on its obligation to
pay the Fund and the risk that the Fund will not be able to meet its obligations
to pay the other party to the agreement.
2 MUNIYIELD NEW YORK INSURED FUND, INC. OCTOBER 31, 2004
A Letter From the President
Dear Shareholder
As we ended the current reporting period, the financial markets were facing a
number of uncertainties. At the top of investors' minds were questions about
economic expansion, corporate earnings, interest rates and inflation, politics,
oil prices and terrorism.
After benefiting from aggressive monetary and fiscal policy stimulus, some fear
the U.S. economy has hit a "soft patch." In fact, economic expansion has slowed
somewhat in recent months, but we believe it is easing into a pace of growth
that is sustainable and healthy. The favorable economic environment has served
to benefit American corporations, which have continued to post strong earnings.
Although the most impressive results were seen earlier in the year, solid
productivity, improved revenue growth and cost discipline all point to a vital
corporate sector.
In terms of inflation and interest rates, the Federal Reserve Board (the Fed)
has signaled its confidence in the economic recovery by increasing the Federal
Funds target rate four times in the past several months, from 1% to 2% as of the
November 10 Federal Open Market Committee meeting. Inflation, for its part, has
remained in check. Investors and economists are focused on how quickly Fed
policy will move from here.
With the presidential election now behind us, any politically provoked market
angst should subside to some extent. The effect of oil prices, however, is more
difficult to predict. At around $50 per barrel, the price of oil is clearly a
concern. However, on an inflation-adjusted basis and considering modern usage
levels, the situation is far from the crisis proportions we saw in the 1980s.
Finally, although terrorism and geopolitical tensions are realities we are
forced to live with today, history has shown us that the financial effects of
any single event tend to be short-lived.
Amid the uncertainty, the Lehman Brothers Municipal Bond Index posted a 12-month
return of +6.03% and a six-month return of +4.79% as of October 31, 2004.
Long-term bond yields were slightly lower at October 31, 2004 than they were a
year earlier. As always, our investment professionals are closely monitoring the
markets, the economy and the overall environment in an effort to make
well-informed decisions for the portfolios they manage. For the individual
investor, the key during uncertain times is to remain focused on the big
picture. Investment success comes not from reacting to short-term volatility,
but from maintaining a long-term perspective and adhering to the disciplines of
asset allocation, diversification and rebalancing. We encourage you to work with
your financial advisor to ensure these time-tested techniques are incorporated
into your investment plan.
We thank you for trusting Merrill Lynch Investment Managers with your investment
assets, and we look forward to serving you in the months and years ahead.
Sincerely,
/s/ Terry K. Glenn
Terry K. Glenn
President and Director
MUNIYIELD NEW YORK INSURED FUND, INC. OCTOBER 31, 2004 3
[LOGO] Merrill Lynch Investment Managers
A Discussion With Your Fund's Portfolio Manager
We continued to focus on increasing the Fund's yield while also looking to
improve the portfolio's liquidity and flexibility in order to better respond to
changing market conditions.
Describe the recent market environment relative to municipal bonds.
Over the past 12 months, amid considerable monthly volatility, long-term U.S.
Treasury bond yields generally moved lower -- despite an increase in short-term
interest rates by the Federal Reserve Board (the Fed). On October 31, 2004, the
30-year Treasury bond yield stood at 4.79%, a decline of 34 basis points (.34%)
from a year earlier. The yield on the 10-year U.S. Treasury note was 4.02%, a 27
basis point drop during the same 12-month period.
While tax-exempt bond yields followed the same pattern as their taxable
counterparts, volatility in the municipal market was more subdued. Yields on
long-term revenue bonds, as measured by the Bond Buyer Revenue Bond Index, fell
27 basis points during the past 12 months. According to Municipal Market Data,
yields on AAA-rated issues maturing in 30 years declined 22 basis points to
4.60%, while yields on 10-year AAA-rated issues dropped 28 basis points to
3.40%.
While more than $360 billion in new long-term tax-exempt bonds was issued in the
past 12 months, this represented a decline of approximately 6% compared to the
previous year. In New York, supply was even further limited, with a
year-over-year decline of 16% as of October 31, 2004.
Describe conditions in the State of New York.
New York maintains credit ratings of A2 from Moody's Investors Service, AA from
Standard & Poor's and AA- from Fitch. Moody's recently assigned a positive
outlook to the state's credit rating, while Fitch carries a stable trend and
Standard & Poor's applies a negative outlook.
The weakened economy continued to put pressure on New York's budget. Despite
spending cuts and significant increases in personal and sales tax rates, the
state relied on one-time revenue sources, particularly $4.2 billion in proceeds
from tobacco settlement revenue bonds, to close its budget gap in fiscal year
2004 (which ended March 31, 2004).
The state's 2005 fiscal year opened without an adopted budget. The governor's
executive budget totals $99 billion and recommends closing a $5 billion gap
through $2.6 billion in spending cuts and $1.5 billion in non-recurring sources,
significantly less than the prior two fiscal years. Adopting and maintaining a
balanced budget has been complicated by political resistance to additional tax
hikes and cuts in popular programs, as well as pressures from local governments
for pension and Medicaid relief, and a lack of readily available one-time
revenue sources. The proposed budget also does not address a lawsuit recently
won by the Campaign for Fiscal Equity that could require up to $2 billion in
annual state education spending.
How did the Fund perform during the fiscal year in light of the existing market
conditions?
For the 12-month period ended October 31, 2004, the Common Stock of MuniYield
New York Insured Fund, Inc. had net annualized yields of 5.66% and 6.35%, based
on a year-end per share net asset value of $14.81 and a per share market price
of $13.20, respectively, and $.838 per share income dividends. Over the same
period, the total investment return on the Fund's Common Stock was +6.53%, based
on an unchanged per share net asset value of $14.81, and assuming reinvestment
of ordinary income dividends.
The Fund's total return, based on net asset value, lagged the +8.35% average
return of the Lipper New York Insured Municipal Debt Funds category for the
12-month period. (Funds in this Lipper category invest primarily in securities
exempt from taxation in New York and insured as to timely payment.) Fund
performance was a reflection of our defensive market stance, which we employed
in anticipation of a growing economy and rising interest rates. The defensive
positioning, including a relatively short duration, was designed to reduce
volatility in the portfolio and mitigate the negative price impact associated
with a rise in interest rates.
The Fund's yield continued to be attractive throughout the year. In fact, the
Fund was able to increase its dividend reserves, which should help maintain an
attractive income stream, even in less favorable market scenarios.
For the six-month period ended October 31, 2004, the total investment return on
the Fund's Common Stock was +6.62%, based on a change in per share net asset
value from $14.35 to $14.81, and assuming reinvestment of ordinary income
dividends.
4 MUNIYIELD NEW YORK INSURED FUND, INC. OCTOBER 31, 2004
For a description of the Fund's total investment return based on a change in the
per share market value of the Fund's Common Stock (as measured by the trading
price of the Fund's shares on the New York Stock Exchange), and assuming
reinvestment of dividends, please refer to the Financial Highlights section of
this report. As a closed-end fund, the Fund's shares may trade in the secondary
market at a premium or discount to the Fund's net asset value. As a result,
total investment returns based on changes in the market value of the Fund's
Common stock may vary significantly from total investment returns based on
changes in the Fund's net asset value.
What changes were made to the portfolio during the year?
Given the decline in new issuance of New York municipal bonds, opportunities to
restructure the portfolio have been somewhat limited. In general, we focused on
increasing the Fund's yield while also improving liquidity and diversification
in the portfolio, giving it the flexibility to capitalize on market
opportunities as they arise. This involved selling some of the portfolio's
lower-yielding, less-appealing bonds while seeking to add more attractively
structured issues in the 25-year to 30-year maturity range. In addition, by
selling some of our less-appealing uninsured bonds, we freed up the portfolio's
uninsured basket somewhat, thereby allowing us the flexibility to add
higher-yielding uninsured bonds as they become available.
The Fund also disposed of its holding of Cicero bonds and liquidated its
position in unenhanced tobacco bonds.
The average yields for the Fund's Auction Market Preferred Stock (AMPS) for the
six months ended October 31, 2004, were: 1.12% for Series A; .86% for Series B;
1.11% for Series C; 1.01% for Series D; and 1.09% for Series E. These attractive
funding levels, in combination with the steep municipal yield curve, continued
to provide a significant income benefit to the Fund's Common Stock shareholders
from the leveraging of Preferred Stock. While the Fed is likely to continue
raising short-term interest rates, the increases are expected to be gradual and
should not have an immediate material impact on the positive advantage leverage
has had on the Fund's Common Stock yield. However, should the spread between
short-term and long-term interest rates narrow, the benefits of leveraging will
decline and, as a result, reduce the yield on the Fund's Common Stock. At the
end of the period, the Fund's leverage amount, due to AMPS, was 30.74% of total
net assets. (For a more complete explanation of the benefits and risks of
leveraging, see page 2 of this report to shareholders.)
How would you characterize the portfolio's position at the close of the period?
We found ourselves in an unprecedented market in the past year. As the Fed
increased short-term interest rates, yields on longer-dated bonds actually
declined as their prices rallied. While our defensive stance was a detriment
under these circumstances, we believe it is the prudent course going forward. We
expect the Fed to continue its measured program of interest rate increases,
which should force long-term bond yields higher. Thus, our defensive stance
should lessen the Fund's net asset value volatility, while also continuing to
generate an attractive yield for our shareholders.
We continue to maintain a fully invested portfolio targeting bonds with 25- to
30-year maturities. We are looking for opportunities to participate in bonds
that appeal to retail as well as institutional investors, and believe that
legislation through the "Liberty Program" should encourage new issuance. The
legislation, passed after the events of September 11, 2001, allows for
additional re-funding and provides for certain projects that would benefit New
York City rebuilding efforts. The increased issuance could provide more
attractive trading opportunities and the potential to further diversify the
portfolio.
Timothy T. Browse, CFA
Vice President and Portfolio Manager
November 9, 2004
MUNIYIELD NEW YORK INSURED FUND, INC. OCTOBER 31, 2004 5
[LOGO] Merrill Lynch Investment Managers
Schedule of Investments (in Thousands)
S&P Moody's Face
State Ratings+ Ratings+ Amount Municipal Bonds Value
===================================================================================================================================
New York--132.0%
-----------------------------------------------------------------------------------------------------------------------------------
AAA Aaa $ 23,790 Albany County, New York, Airport Authority, Airport Revenue
Bonds, AMT, 6% due 12/15/2023 (c) $ 26,293
---------------------------------------------------------------------------------------------------------
AAA Aaa 8,200 Buffalo and Fort Erie, New York, Public Bridge Authority, Toll
Bridge System Revenue Bonds, 5.75% due 1/01/2025 (d) 8,330
---------------------------------------------------------------------------------------------------------
Buffalo, New York, School, GO, Series D (b):
AAA Aaa 1,250 5.50% due 12/15/2014 1,424
AAA Aaa 1,500 5.50% due 12/15/2016 1,701
---------------------------------------------------------------------------------------------------------
AAA Aaa 4,300 Buffalo, New York, Sewer Authority, Revenue Refunding Bonds,
Series F, 6% due 7/01/2013 (b) 5,126
---------------------------------------------------------------------------------------------------------
AAA Aaa 1,700 Dutchess County, New York, Resource Recovery Agency Revenue
Bonds (Solid Waste System--Forward), Series A, 5.40%
due 1/01/2013 (d) 1,915
---------------------------------------------------------------------------------------------------------
Erie County, New York, IDA, School Facility Revenue Bonds (City
of Buffalo Project) (c):
AAA Aaa 1,900 5.75% due 5/01/2020 2,184
AAA Aaa 5,250 5.75% due 5/01/2024 5,907
---------------------------------------------------------------------------------------------------------
Huntington, New York, GO, Refunding (a):
NR* Aaa 485 5.50% due 4/15/2011 553
NR* Aaa 460 5.50% due 4/15/2012 532
NR* Aaa 455 5.50% due 4/15/2013 525
NR* Aaa 450 5.50% due 4/15/2014 521
NR* Aaa 450 5.50% due 4/15/2015 524
---------------------------------------------------------------------------------------------------------
NR* Aaa 1,675 Ilion, New York, Central School District, GO, Series B, 5.50%
due 6/15/2010 (b)(e) 1,924
---------------------------------------------------------------------------------------------------------
Long Island Power Authority, New York, Electric System Revenue
Bonds, Series A (a):
AAA Aaa 7,000 5% due 9/01/2029 7,225
AAA Aaa 5,000 5% due 9/01/2034 5,148
---------------------------------------------------------------------------------------------------------
NR* Aaa 975 Manhasset, New York, Union Free School District, GO, 4.50%
due 9/15/2027 (b) 976
---------------------------------------------------------------------------------------------------------
AAA Aaa 2,000 Metropolitan Transportation Authority, New York, Commuter
Facilities Revenue Bonds, Series A, 5.75% due 1/01/2008 (d)(e) 2,248
---------------------------------------------------------------------------------------------------------
AAA Aaa 10,000 Metropolitan Transportation Authority, New York, Commuter
Facilities Revenue Refunding Bonds, Series B, 4.875%
due 7/01/2018 (b)(h) 10,772
---------------------------------------------------------------------------------------------------------
Metropolitan Transportation Authority, New York, Dedicated Tax
Fund Revenue Bonds, Series A:
AAA Aaa 7,280 5% due 11/15/2031 (b) 7,462
AAA Aaa 1,015 5% due 11/15/2032 (c) 1,043
---------------------------------------------------------------------------------------------------------
Metropolitan Transportation Authority, New York, Dedicated Tax
Fund Revenue Refunding Bonds, Series A:
AAA Aaa 7,500 5.50% due 11/15/2026 (c) 8,242
AAA Aaa 10,000 5% due 11/15/2030 (d) 10,286
---------------------------------------------------------------------------------------------------------
Metropolitan Transportation Authority, New York, Revenue
Refunding Bonds:
NR* Aaa 28,900 RIB, Series 724X, 9.49% due 11/15/2032 (c)(f) 36,250
AAA Aaa 2,500 Series A, 5.50% due 11/15/2018 (a) 2,854
AAA Aaa 1,740 Series A, 5.125% due 11/15/2022 1,861
AAA Aaa 2,500 Series A, 5.25% due 11/15/2031 (b) 2,654
AAA Aaa 1,500 Series B, 5% due 11/15/2028 (d) 1,549
---------------------------------------------------------------------------------------------------------
AAA Aaa 2,000 Metropolitan Transportation Authority, New York, Service
Contract Revenue Refunding Bonds, Series A, 5% due 7/01/2025 (b) 2,083
Portfolio Abbreviations
To simplify the listings of MuniYield 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)
COP Certificates of Participation
DRIVERS Derivative Inverse Tax-Exempt Receipts
GO General Obligation Bonds
HFA Housing Finance Agency
IDA Industrial Development Authority
IDR Industrial Development Revenue Bonds
RIB Residual Interest Bonds
VRDN Variable Rate Demand Notes
6 MUNIYIELD NEW YORK INSURED FUND, INC. OCTOBER 31, 2004
Schedule of Investments (continued) (in Thousands)
S&P Moody's Face
State Ratings+ Ratings+ Amount Municipal Bonds Value
===================================================================================================================================
New York (continued)
-----------------------------------------------------------------------------------------------------------------------------------
Metropolitan Transportation Authority, New York, Transit
Facilities Revenue Refunding Bonds, Series C (c)(e):
AAA Aaa $ 2,885 5.125% due 1/01/2012 $ 3,252
AAA Aaa 1,640 5.125% due 7/01/2012 1,858
---------------------------------------------------------------------------------------------------------
AAA Aaa 2,500 Metropolitan Transportation Authority, New York, Transportation
Revenue Bonds, Series A, 5% due 11/15/2032 (b) 2,575
---------------------------------------------------------------------------------------------------------
Metropolitan Transportation Authority, New York, Transportation
Revenue Refunding Bonds (d):
AAA Aaa 800 Series E, 5.125% due 11/15/2024 846
AAA Aaa 6,235 Series F, 5.25% due 11/15/2027 6,614
AAA Aaa 8,200 Series F, 5% due 11/15/2031 8,429
---------------------------------------------------------------------------------------------------------
Monroe County, New York, IDA, Revenue Bonds (Southview Towers
Project), AMT:
NR* Aa1 1,400 6.125% due 2/01/2020 1,543
NR* Aa1 1,125 6.25% due 2/01/2031 1,231
---------------------------------------------------------------------------------------------------------
AAA Aaa 12,130 Nassau Health Care Corporation, New York, Health System Revenue
Bonds, 5.75% due 8/01/2009 (c)(e)(m) 14,035
---------------------------------------------------------------------------------------------------------
BBB A3 455 New York City, New York, City Health and Hospital Corporation,
Health System Revenue Bonds, Series A, 5.375% due 2/15/2026 470
---------------------------------------------------------------------------------------------------------
AAA Aaa 3,000 New York City, New York, City Health and Hospital Corporation,
Health System Revenue Refunding Bonds, Series A, 5.25%
due 2/15/2012 (a) 3,367
---------------------------------------------------------------------------------------------------------
AAA Aaa 1,275 New York City, New York, City IDA, Civic Facility Revenue
Refunding Bonds (Nightingale-Bamford School), 5.25%
due 1/15/2018 (a) 1,406
---------------------------------------------------------------------------------------------------------
AAA Aaa 13,175 New York City, New York, City IDA, IDR (Japan Airlines Company),
AMT, 6% due 11/01/2015 (c) 13,574
---------------------------------------------------------------------------------------------------------
AAA Aaa 7,970 New York City, New York, City IDA, Parking Facility Revenue
Bonds (Royal Charter--New York Presbyterian), 5.75%
due 12/15/2029 (c) 8,967
---------------------------------------------------------------------------------------------------------
AAA Aaa 14,970 New York City, New York, City IDA, Special Facilities Revenue
Bonds (Terminal One Group), AMT, 6.125% due 1/01/2024 (d) 15,343
---------------------------------------------------------------------------------------------------------
AAA Aaa 500 New York City, New York, City Municipal Water Finance Authority,
Water and Sewer System Crossover Revenue Refunding Bonds,
Series F, 5% due 6/15/2029 (c) 512
---------------------------------------------------------------------------------------------------------
New York City, New York, City Municipal Water Finance Authority,
Water and Sewer System Revenue Bonds:
NR* Aaa 12,500 RIB, Series 726X, 9.49% due 6/15/2027 (d)(f) 15,569
AAA Aaa 2,850 Series A, 5.75% due 6/15/2031 (b) 3,164
AAA Aaa 4,085 Series B, 5.75% due 6/15/2006 (d)(e) 4,382
AAA Aaa 17,200 Series B, 5.75% due 6/15/2029 (d) 18,611
---------------------------------------------------------------------------------------------------------
New York City, New York, City Municipal Water Finance Authority,
Water and Sewer System Revenue Refunding Bonds:
AAA Aaa 5,000 5.50% due 6/15/2033 (d) 5,410
AAA Aaa 2,250 Series A, 5.375% due 6/15/2026 (c) 2,359
AAA Aaa 1,250 Series A, 5.125% due 6/15/2034 (d) 1,295
AAA Aaa 7,015 Series B, 5.75% due 6/15/2026 (d) 7,496
---------------------------------------------------------------------------------------------------------
AAA Aaa 1,020 New York City, New York, City Transit Authority, Metropolitan
Transportation Authority, Triborough, COP, Series A, 5.625%
due 1/01/2012 (a) 1,155
---------------------------------------------------------------------------------------------------------
AAA Aaa 1,000 New York City, New York, City Transitional Finance Authority,
Refunding Bonds, Future Tax Secured Revenue Series B, 5%
due 5/01/2030 (a) 1,029
---------------------------------------------------------------------------------------------------------
New York City, New York, City Transitional Finance Authority
Revenue Bonds, Future Tax Secured:
AAA Aaa 6,805 Series B, 6.25% due 5/15/2010 (b)(e) 8,067
AA+ Aa2 800 Series B, 6.25% due 5/15/2010 (e) 948
AA+ Aa2 3,160 Series C, 5.50% due 5/01/2025 3,435
AAA Aaa 16,195 Series C, 5% due 2/01/2033 (b) 16,690
AAA Aaa 8,020 Series E, 5.25% due 2/01/2017 (b) 8,879
AAA Aaa 2,500 Series E, 5.25% due 2/01/2022 (d) 2,709
MUNIYIELD NEW YORK INSURED FUND, INC. OCTOBER 31, 2004 7
[LOGO] Merrill Lynch Investment Managers
Schedule of Investments (continued) (in Thousands)
S&P Moody's Face
State Ratings+ Ratings+ Amount Municipal Bonds Value
===================================================================================================================================
New York (continued)
-----------------------------------------------------------------------------------------------------------------------------------
New York City, New York, City Transitional Finance Authority,
Revenue Refunding Bonds:
AAA Aaa $ 3,000 Future Tax Secured, Series D, 5.25% due 2/01/2021 (d) $ 3,266
AAA Aaa 1,000 Series A, 5% due 11/15/2026 (b) 1,036
---------------------------------------------------------------------------------------------------------
New York City, New York, GO:
NR* Aaa 11,042 RIB, Series 725X, 9.49% due 3/15/2027 (c)(f) 13,737
AAA Aaa 3,000 Series A, 5.75% due 5/15/2024 (b) 3,398
AAA Aaa 2,500 Series B, 5.75% due 8/01/2013 (d) 2,864
A A2 3,750 Series D, 5.25% due 10/15/2023 3,978
A A2 8,000 Series J, 5% due 5/15/2023 8,326
A A2 2,295 Sub-Series C-1, 4.75% due 8/15/2025 2,306
A A2 1,150 Sub-Series C-1, 5.25% due 8/15/2026 1,210
A A2 750 Sub-Series C-1, 5.10% due 8/15/2027 773
---------------------------------------------------------------------------------------------------------
New York City, New York, GO, Refunding:
AAA A2 315 Series A, 6.375% due 5/15/2010 (b)(e) 375
AAA A2 685 Series A, 6.375% due 5/15/2013 (b) 804
AAA A2 70 Series B, 7% due 2/01/2018 (a) 70
A A2 2,285 Series G, 5.75% due 2/01/2006 (e) 2,431
A A2 1,365 Series G, 5.75% due 2/01/2020 1,437
---------------------------------------------------------------------------------------------------------
New York City, New York, Sales Tax Asset Receivable Corporation
Revenue Bonds, Series A (a):
AAA Aaa 10,000 5.25% due 10/15/2027 10,746
AAA Aaa 10,000 5% due 10/15/2032 10,341
---------------------------------------------------------------------------------------------------------
New York City, New York, Trust for Cultural Resources Revenue
Refunding Bonds (American Museum of Natural History),
Series A (d):
AAA Aaa 4,250 5% due 7/01/2036 4,395
AAA Aaa 6,250 5% due 7/01/2044 6,379
---------------------------------------------------------------------------------------------------------
AAA Aaa 2,345 New York State Dormitory Authority, Hospital Revenue Refunding
Bonds (The New York-Presbyterian Hospital), Series A, 5.25%
due 8/15/2019 (c) 2,588
---------------------------------------------------------------------------------------------------------
AAA Aaa 1,230 New York State Dormitory Authority, Mental Health Facilities
Revenue Bonds, Series B, 5.25% due 2/15/2017 (d) 1,371
---------------------------------------------------------------------------------------------------------
New York State Dormitory Authority Revenue Bonds:
AAA NR* 4,045 (Eger Health Care and Rehabilitation Center), 6.10%
due 8/01/2037 (i) 4,644
AAA Aaa 500 (Fordham University), 5% due 7/01/2020 (b) 534
AA NR* 1,500 (Long Island University), Series B, 5.25%
due 9/01/2028 (k) 1,562
AA- NR* 1,840 (Mental Health Services Facilities Improvement), Series B,
5.25% due 2/15/2023 1,961
AAA Aaa 2,000 (New School for Social Research), 5.75% due 7/01/2026 (d) 2,185
AAA Aaa 1,180 (New York State Rehabilitation Association), Series A,
5.25% due 7/01/2019 (j) 1,288
AAA Aaa 1,000 (New York State Rehabilitation Association), Series A,
5.125% due 7/01/2023 (j) 1,055
AAA Aaa 6,900 (School Districts Financing Program), Series E, 5.75%
due 10/01/2030 (d) 7,766
AAA Aaa 1,000 Series B, 6.50% due 2/15/2011 (d)(h) 1,200
AAA Aaa 3,560 (State University Adult Facilities), Series B, 5.75%
due 5/15/2010 (c)(e) 4,129
AAA Aaa 710 (Upstate Community Colleges), Series A, 6%
due 7/01/2015 (c) 824
AAA Aaa 1,070 (Upstate Community Colleges), Series A, 6%
due 7/01/2016 (c) 1,242
---------------------------------------------------------------------------------------------------------
New York State Dormitory Authority, Revenue Refunding Bonds:
AAA Aaa 1,000 (City University System), Consolidated, Series 1, 5.625%
due 1/01/2008 (c)(e) 1,125
AAA Aaa 4,400 (City University System), Series C, 7.50%
due 7/01/2010 (b) 5,100
AAA A3 4,255 (Mental Health Services Facilities Improvement), Series A,
5.75% due 2/15/2007 (d)(e) 4,698
AAA A3 150 (Mental Health Services Facilities Improvement), Series A,
5.75% due 2/15/2027 (d) 162
AAA Aaa 1,370 (School District Financing Program), Series I, 5.75%
due 10/01/2018 (d) 1,585
AAA Aaa 6,000 (Siena College), 5.75% due 7/01/2026 (d) 6,556
---------------------------------------------------------------------------------------------------------
8 MUNIYIELD NEW YORK INSURED FUND, INC. OCTOBER 31, 2004
Schedule of Investments (continued) (in Thousands)
S&P Moody's Face
State Ratings+ Ratings+ Amount Municipal Bonds Value
===================================================================================================================================
New York (continued)
-----------------------------------------------------------------------------------------------------------------------------------
New York State Dormitory Authority, State Personal Income Tax
Education Revenue Bonds, Series A:
AA A1 $ 1,625 5% due 3/15/2027 $ 1,667
AAA Aaa 3,000 5% due 3/15/2032 (d) 3,085
---------------------------------------------------------------------------------------------------------
AAA Aaa 12,750 New York State Energy Research and Development Authority,
Facilities Revenue Refunding Bonds (Consolidated Edison Co. of
New York), Series A, 6.10% due 8/15/2020 (a) 13,367
---------------------------------------------------------------------------------------------------------
AAA Aaa 4,555 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 (d) 4,618
---------------------------------------------------------------------------------------------------------
AAA Aaa 3,500 New York State Environmental Facilities Corporation, Special
Obligation Revenue Refunding Bonds (Riverbank State Park),
6.25% due 4/01/2012 (a) 4,182
---------------------------------------------------------------------------------------------------------
AAA Aaa 2,405 New York State HFA Revenue Refunding Bonds (Housing Mortgage
Project), Series A, 6.10% due 11/01/2015 (c) 2,488
---------------------------------------------------------------------------------------------------------
AAA Aaa 800 New York State Housing Finance Agency, State Personal Income
Tax Revenue Bonds (Economic Development and Housing), Series A,
5% due 9/15/2023 (d) 845
---------------------------------------------------------------------------------------------------------
A1+ Aaa 8,000 New York State Local Government Assistance Corporation Revenue
Refunding Bonds, Sub Lien, VRDN, Series 4V, 1.73%
due 4/01/2022 (c)(g) 8,000
---------------------------------------------------------------------------------------------------------
New York State Medical Care Facilities Finance Agency Revenue
Bonds, Series A:
AAA Aaa 5,375 (Health Center Project--Second Mortgage), 6.375%
due 11/15/2019 (a) 5,717
AAA Aaa 1,500 (Mental Health Services), 6% due 2/15/2005 (d)(e) 1,549
---------------------------------------------------------------------------------------------------------
AAA Aa2 2,000 New York State Medical Care Facilities Finance Agency, Revenue
Refunding Bonds (Hospital and Nursing Homes), Series B, 6.25%
due 2/15/2025 (i) 2,100
---------------------------------------------------------------------------------------------------------
AAA Aaa 9,645 New York State Mortgage Agency, Homeowner Mortgage Revenue
Refunding Bonds, AMT, Series 67, 5.80% due 10/01/2028 (d) 10,057
---------------------------------------------------------------------------------------------------------
AAA Aaa 2,850 New York State Mortgage Agency Revenue Bonds, DRIVERS, AMT,
Series 295, 9.676% due 4/01/2030 (d)(f) 3,232
---------------------------------------------------------------------------------------------------------
New York State Municipal Bond Bank Agency, Special School
Purpose Revenue Bonds, Series C:
A+ NR* 3,470 5.25% due 6/01/2019 3,756
A+ NR* 3,920 5.25% due 6/01/2020 4,220
A+ NR* 2,250 5.25% due 6/01/2021 2,409
---------------------------------------------------------------------------------------------------------
AAA Aaa 2,820 New York State Thruway Authority, Highway and Bridge Trust Fund
Revenue Bonds, Series A, 6.25% due 4/01/2011 (c) 3,294
---------------------------------------------------------------------------------------------------------
AAA Aaa 2,000 New York State Thruway Authority, Local Highway and Bridge
Service Contract Revenue Bonds, Series A-2, 5.375%
due 4/01/2008 (d)(e) 2,228
---------------------------------------------------------------------------------------------------------
New York State Thruway Authority, Local Highway and Bridge
Service Contract Revenue Refunding Bonds (d):
AAA Aaa 2,170 6% due 4/01/2007 (e) 2,418
AAA Aaa 1,330 6% due 4/01/2011 1,470
AAA Aaa 2,075 6% due 4/01/2012 2,294
---------------------------------------------------------------------------------------------------------
AAA Aaa 3,045 New York State Thruway Authority, Second General Highway and
Bridge Trust Fund Revenue Bonds, Series A, 5.25%
due 4/01/2023 (d) 3,285
---------------------------------------------------------------------------------------------------------
AAA Aaa 3,000 New York State Thruway Authority, Service Contract Revenue
Bonds (Local Highway and Bridges Project), 5.75%
due 4/01/2010 (a)(e) 3,473
---------------------------------------------------------------------------------------------------------
AAA Aaa 1,525 New York State Thruway, Transportation Authority, State
Personal Income Tax Revenue Bonds, Series A, 5%
due 3/15/2020 (d) 1,636
---------------------------------------------------------------------------------------------------------
New York State Urban Development Corporation, Personal Income
Tax Revenue Bonds, Series C-1 (d):
AAA Aaa 1,750 5% due 3/15/2023 1,847
AAA Aaa 3,000 5% due 3/15/2033 3,085
---------------------------------------------------------------------------------------------------------
AAA Aaa 3,190 New York State Urban Development Corporation, Revenue Refunding
Bonds (Correctional Capital Facilities), Series A, 6.50%
due 1/01/2011 (c) 3,795
---------------------------------------------------------------------------------------------------------
MUNIYIELD NEW YORK INSURED FUND, INC. OCTOBER 31, 2004 9
[LOGO] Merrill Lynch Investment Managers
Schedule of Investments (continued) (in Thousands)
S&P Moody's Face
State Ratings+ Ratings+ Amount Municipal Bonds Value
===================================================================================================================================
New York (continued)
-----------------------------------------------------------------------------------------------------------------------------------
Niagara County, New York, IDA, Solid Waste Disposal Revenue
Refunding Bonds, AMT:
BBB Baa1 $ 8,000 Series A, 5.45% due 11/15/2026 $ 8,659
BBB Baa1 2,000 Series C, 5.625% due 11/15/2024 2,144
---------------------------------------------------------------------------------------------------------
AAA Aaa 1,000 Niagara Falls, New York, GO (Water Treatment Plant), AMT, 7.25%
due 11/01/2010 (d) 1,209
---------------------------------------------------------------------------------------------------------
AAA Aaa 1,100 Niagara Falls, New York, Public Water Authority, Water and
Sewer System Revenue Bonds, Series A, 5.50% due 7/15/2026 (d) 1,152
---------------------------------------------------------------------------------------------------------
AAA Aaa 2,705 Niagara, New York, Frontier Authority, Airport Revenue Bonds
(Buffalo Niagara International Airport), Series B, 5.50%
due 4/01/2019 (d) 3,012
---------------------------------------------------------------------------------------------------------
AAA Aaa 1,260 North Country, New York, Development Authority, Solid Waste
Management System Revenue Refunding Bonds, 6% due 5/15/2015 (c) 1,484
---------------------------------------------------------------------------------------------------------
North Hempstead, New York, GO, Refunding, Series B (b):
AAA Aaa 1,745 6.40% due 4/01/2013 2,126
AAA Aaa 555 6.40% due 4/01/2017 698
---------------------------------------------------------------------------------------------------------
AAA Aaa 1,665 Oneida County, New York, IDA, Civic Facilities Revenue Bonds
(Mohawk Valley), Series A, 5.20% due 2/01/2013 (c) 1,816
---------------------------------------------------------------------------------------------------------
Port Authority of New York and New Jersey, Consolidated Revenue
Bonds, AMT:
AAA Aaa 2,180 97th Series, 6.50% due 7/15/2019 (b) 2,221
AAA Aaa 2,500 137th Series, 5.125% due 7/15/2030 (c) 2,585
---------------------------------------------------------------------------------------------------------
AAA Aaa 4,000 Port Authority of New York and New Jersey, Consolidated Revenue
Refunding Bonds, AMT, 119th Series, 5.50% due 9/15/2016 (b) 4,212
---------------------------------------------------------------------------------------------------------
NR* Aaa 4,075 Port Authority of New York and New Jersey, Revenue Bonds, Trust
Receipts, AMT, Class R, Series 10, 9.654% due 1/15/2017 (c)(f) 4,634
---------------------------------------------------------------------------------------------------------
AAA NR* 7,500 Port Authority of New York and New Jersey Revenue Refunding
Bonds, DRIVERS, AMT, Series 177, 9.932% due 10/15/2032 (d)(f) 8,890
---------------------------------------------------------------------------------------------------------
Port Authority of New York and New Jersey, Special Obligation
Revenue Bonds, AMT (d):
AAA NR* 1,750 DRIVERS, Series 192, 9.431% due 12/01/2025 (f) 1,993
AAA NR* 5,080 DRIVERS, Series 278, 9.43% due 12/01/2022 (f) 5,985
AAA Aaa 14,750 (JFK International Air Terminal), Series 6, 6.25%
due 12/01/2010 16,793
AAA Aaa 7,175 (JFK International Air Terminal LLC), Series 6, 6.25%
due 12/01/2011 8,228
AAA Aaa 4,425 (Special Project--JFK International Air Terminal),
Series 6, 6.25% due 12/01/2013 5,128
AAA Aaa 7,380 (Special Project--JFK International Air Terminal),
Series 6, 6.25% due 12/01/2014 8,620
---------------------------------------------------------------------------------------------------------
AAA Aaa 1,255 Rensselaer County, New York, IDA, Civic Facility Revenue Bonds
(Polytech Institute), Series B, 5.50% due 8/01/2022 (a) 1,394
---------------------------------------------------------------------------------------------------------
A A3 4,625 Suffolk County, New York, IDA, IDR (Keyspan-Port Jefferson),
AMT, 5.25% due 6/01/2027 4,736
---------------------------------------------------------------------------------------------------------
Suffolk County, New York, IDA, Solid Waste Disposal Facility,
Revenue Refunding Bonds (Ogden Martin System Huntington
Project), AMT (a):
AAA Aaa 8,530 6% due 10/01/2010 9,772
AAA Aaa 9,170 6.15% due 10/01/2011 10,661
AAA Aaa 6,470 6.25% due 10/01/2012 7,625
---------------------------------------------------------------------------------------------------------
Tobacco Settlement Financing Corporation of New York Revenue
Bonds:
AAA Aaa 5,000 Series A-1, 5.25% due 6/01/2020 (a) 5,439
AAA Aaa 5,000 Series A-1, 5.25% due 6/01/2021 (a) 5,394
AAA Aaa 2,000 Series A-1, 5.25% due 6/01/2022 (a) 2,153
AA- A3 2,000 Series C-1, 5.50% due 6/01/2021 2,187
AA- A3 1,900 Series C-1, 5.50% due 6/01/2022 2,065
---------------------------------------------------------------------------------------------------------
Triborough Bridge and Tunnel Authority, New York, General
Purpose Revenue Refunding Bonds (d):
AAA Aaa 2,500 Series A, 5% due 1/01/2032 2,562
AAA Aa3 2,305 Series Y, 6% due 1/01/2012 (h) 2,653
---------------------------------------------------------------------------------------------------------
10 MUNIYIELD NEW YORK INSURED FUND, INC. OCTOBER 31, 2004
Schedule of Investments (continued) (in Thousands)
S&P Moody's Face
State Ratings+ Ratings+ Amount Municipal Bonds Value
===================================================================================================================================
New York (concluded)
-----------------------------------------------------------------------------------------------------------------------------------
Triborough Bridge and Tunnel Authority, New York, Revenue
Refunding Bonds (d):
AAA Aaa $ 7,000 5.25% due 11/15/2023 $ 7,532
AAA Aaa 22,175 5% due 11/15/2032 22,780
AAA Aaa 1,500 Series B, 5% due 11/15/2032 1,541
---------------------------------------------------------------------------------------------------------
Triborough Bridge and Tunnel Authority, New York, Subordinate
Revenue Bonds:
AAA Aaa 2,465 5% due 11/15/2028 (a) 2,545
AAA Aaa 2,500 5% due 11/15/2032 (b) 2,575
AAA Aaa 6,000 Series A, 5.25% due 11/15/2030 (d) 6,363
---------------------------------------------------------------------------------------------------------
NR* A3 2,500 United Nations Development Corporation, New York, Revenue
Refunding Bonds, Senior Lien, Series A, 5.25% due 7/01/2020 2,651
---------------------------------------------------------------------------------------------------------
AAA Aaa 1,680 Warren & Washington Counties, New York, IDA, Civic Facility
Revenue Bonds (Glens Falls Hospital Project), Series A, 5%
due 12/01/2035 (c) 1,721
---------------------------------------------------------------------------------------------------------
AAA Aaa 2,010 Yonkers, New York, GO, Series A, 5.75% due 10/01/2017 (b) 2,308
===================================================================================================================================
Guam--0.8%
-----------------------------------------------------------------------------------------------------------------------------------
A.B. Won Guam International Airport Authority, General Revenue
Refunding Bonds, AMT, Series C (d):
AAA Aaa 2,240 5.25% due 10/01/2021 2,412
AAA Aaa 2,050 5.25% due 10/01/2022 2,208
===================================================================================================================================
Puerto Rico--10.4%
-----------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth, GO, Refunding, Series A:
AAA Aaa 9,395 4% due 7/01/2031 (b) 9,753
AAA Aaa 2,500 5% due 7/01/2031 (c) 2,763
---------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth Highway and Transportation Authority,
Transportation Revenue Bonds:
AAA Aaa 1,900 5.25% due 7/01/2018 (b) 2,118
AAA Aaa 2,265 Series G, 5.25% due 7/01/2019 (b) 2,514
AAA Aaa 1,000 Series G, 5.25% due 7/01/2021 (b) 1,100
AAA Aaa 1,250 Trust Receipts, Class R, Series B, 9.654%
due 7/01/2035 (d)(f) 1,615
---------------------------------------------------------------------------------------------------------
A Baa1 8,495 Puerto Rico Commonwealth, Highway and Transportation Authority,
Transportation Revenue Refunding Bonds, Series D, 5.75%
due 7/01/2041 9,403
---------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth, Public Improvement, GO, Series A:
A- Baa1 4,605 5.25% due 7/01/2019 4,974
A- Baa1 7,480 5.25% due 7/01/2020 8,040
---------------------------------------------------------------------------------------------------------
A- A3 4,750 Puerto Rico Electric Power Authority, Power Revenue Bonds,
Series NN, 5.125% due 7/01/2029 4,930
---------------------------------------------------------------------------------------------------------
AAA Aaa 3,000 Puerto Rico Public Buildings Authority, Government Facilities
Revenue Refunding Bonds, Series J, 5% due 7/01/2036 (a) 3,315
---------------------------------------------------------------------------------------------------------
Puerto Rico Public Finance Corporation, Commonwealth
Appropriation Revenue Bonds, Series E:
BBB+ Baa2 2,300 5.50% due 2/01/2012 (e) 2,626
BBB+ Baa2 700 5.50% due 8/01/2029 742
---------------------------------------------------------------------------------------------------------
AAA NR* 6,100 Puerto Rico Public Finance Corporation Revenue Bonds, DRIVERS,
Series 272, 9.32% due 8/01/2030 (f) 7,083
---------------------------------------------------------------------------------------------------------
Total Municipal Bonds (Cost--$785,350)--143.2% 836,738
=========================================================================================================
MUNIYIELD NEW YORK INSURED FUND, INC. OCTOBER 31, 2004 11
[LOGO] Merrill Lynch Investment Managers
Schedule of Investments (concluded) (in Thousands)
Shares
Held Short-Term Securities Value
=========================================================================================================
52 CMA New York Municipal Money Fund (l) $ 52
---------------------------------------------------------------------------------------------------------
Total Short-Term Securities (Cost--$52)--0.0% 52
=========================================================================================================
Total Investments (Cost--$785,402**)--143.2% 836,790
Other Assets Less Liabilities--1.1% 6,486
Preferred Stock, at Redemption Value--(44.3%) (259,028)
---------
Net Assets Applicable to Common Stock--100.0% $ 584,248
=========
* Not Rated.
** The cost and unrealized appreciation/depreciation of investments as of
October 31, 2004, as computed for federal income tax purposes, were as
follows:
(in Thousands)
--------------------------------------------------------------------------
Aggregate cost ............................................ $785,529
========
Gross unrealized appreciation ............................. $ 51,425
Gross unrealized depreciation ............................. (164)
--------
Net unrealized appreciation ............................... $ 51,261
========
+ Ratings of issues shown are unaudited.
(a) AMBAC Insured.
(b) FGIC Insured.
(c) FSA Insured.
(d) MBIA Insured.
(e) Prerefunded.
(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, 2004.
(g) 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,
2004.
(h) Escrowed to maturity.
(i) FHA Insured.
(j) CIFG Insured.
(k) Radian Insured.
(l) Investments in companies considered to be an affiliate of the Fund (such
companies are defined as "Affiliated Companies" in Section 2(a)(3) of the
Investment Company Act of 1940) were as follows:
(in Thousands)
--------------------------------------------------------------------------
Net Dividend
Affiliate Activity Income
--------------------------------------------------------------------------
CMA New York Municipal Money Fund 8 $6
--------------------------------------------------------------------------
(m) All or a portion of security held as collateral in connection with open
future contracts. Forward interest rate swaps outstanding as of October
31, 2004 were as follows:
(in Thousands)
--------------------------------------------------------------------------
Notional Unrealized
Amount Depreciation
--------------------------------------------------------------------------
Receive a variable rate equal to the
change in 7-Day Bond Market Association
Municipal Swap Index Rate and pay a
fixed rate equal to 3.679% interest
Broker, Morgan Stanley Capital
Services, Inc.
Expires December 2014 $83,000 $(1,493)
--------------------------------------------------------------------------
Financial futures contracts sold as of October 31, 2004 were as follows:
(in Thousands)
--------------------------------------------------------------------------
Number of Expiration Face Unrealized
Contracts Issue Date Value Depreciation
--------------------------------------------------------------------------
405 10-Year U.S.
Treasury Notes December 2004 $45,569 $(424)
--------------------------------------------------------------------------
See Notes to Financial Statements.
12 MUNIYIELD NEW YORK INSURED FUND, INC. OCTOBER 31, 2004
Statement of Net Assets
As of October 31, 2004
============================================================================================================================
Assets
----------------------------------------------------------------------------------------------------------------------------
Investments in unaffiliated securities, at value (identified
cost--$785,350,281) $ 836,737,933
Investments in affiliated securities, at value (identified
cost--$51,720) 51,720
Cash ............................................................. 52,302
Receivables:
Securities sold ............................................... $ 17,163,797
Interest ...................................................... 14,883,579
Dividends from affiliates ..................................... 2 32,047,378
-------------
Prepaid expenses ................................................. 13,376
-------------
Total assets ..................................................... 868,902,709
-------------
============================================================================================================================
Liabilities
----------------------------------------------------------------------------------------------------------------------------
Unrealized depreciation on forward interest rate swaps ........... 1,493,004
Payables:
Securities purchased .......................................... 23,139,795
Investment adviser ............................................ 401,824
Dividends to Common Stock shareholders ........................ 342,453
Variation margin .............................................. 151,875
Other affiliates .............................................. 5,813 24,041,760
-------------
Accrued expenses and other liabilities ........................... 92,777
-------------
Total liabilities ................................................ 25,627,541
-------------
============================================================================================================================
Preferred Stock
----------------------------------------------------------------------------------------------------------------------------
Preferred Stock, at redemption value, par value $.05 per share
(1,700 Series A Shares, 1,700 Series B Shares, 2,800 Series C
Shares, 1,960 Series D Shares and 2,200 Series E Shares of AMPS*
authorized, issued and outstanding at $25,000 per share
liquidation preference) ......................................... 259,027,507
-------------
============================================================================================================================
Net Assets Applicable to Common Stock
----------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common Stock ............................ $ 584,247,661
=============
============================================================================================================================
Analysis of Net Assets Applicable to Common Stock
----------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $.10 per share (39,445,962 shares issued
and outstanding) ................................................ $ 3,944,596
Paid-in capital in excess of par ................................. 557,669,466
Undistributed investment income--net ............................. $ 7,444,216
Accumulated realized capital losses--net ......................... (34,279,762)
Unrealized appreciation--net ..................................... 49,469,145
-------------
Total accumulated earnings--net .................................. 22,633,599
-------------
Total--Equivalent to $14.81 net asset value per share of Common
Stock (market price--$13.20) .................................... $ 584,247,661
=============
* Auction Market Preferred Stock.
See Notes to Financial Statements.
MUNIYIELD NEW YORK INSURED FUND, INC. OCTOBER 31, 2004 13
[LOGO] Merrill Lynch Investment Managers
Statement of Operations
For the Year Ended October 31, 2004
============================================================================================================================
Investment Income
----------------------------------------------------------------------------------------------------------------------------
Interest ......................................................... $ 41,507,640
Dividends from affiliates ........................................ 6,105
-------------
Total income ..................................................... 41,513,745
-------------
============================================================================================================================
Expenses
----------------------------------------------------------------------------------------------------------------------------
Investment advisory fees ......................................... $ 4,174,910
Commission fees .................................................. 660,860
Accounting services .............................................. 246,467
Transfer agent fees .............................................. 96,969
Printing and shareholder reports ................................. 54,879
Professional fees ................................................ 54,617
Custodian fees ................................................... 43,369
Listing fees ..................................................... 30,495
Directors' fees and expenses ..................................... 26,692
Pricing fees ..................................................... 25,846
Other ............................................................ 51,245
-------------
Total expenses before reimbursement .............................. 5,466,349
Reimbursement of expenses ........................................ (4,248)
-------------
Total expenses after reimbursement ............................... 5,462,101
-------------
Investment income--net ........................................... 36,051,644
-------------
============================================================================================================================
Realized & Unrealized Gain (Loss)--Net
----------------------------------------------------------------------------------------------------------------------------
Realized loss on:
Investments--net .............................................. (6,644,150)
Forward interest rate swaps and futures contracts--net ........ (8,740,783) (15,384,933)
-------------
Change in unrealized appreciation/depreciation on:
Investments--net .............................................. 14,024,768
Forward interest rate swaps and futures contracts--net ........ 991,058 15,015,826
-------------------------------
Total realized and unrealized loss--net .......................... (369,107)
-------------
============================================================================================================================
Dividends to Preferred Stock Shareholders
----------------------------------------------------------------------------------------------------------------------------
Investment income--net ........................................... (2,455,390)
-------------
Net Increase in Net Assets Resulting from Operations ............. $ 33,227,147
=============
See Notes to Financial Statements.
14 MUNIYIELD NEW YORK INSURED FUND, INC. OCTOBER 31, 2004
Statements of Changes in Net Assets
For the Year Ended
October 31,
-------------------------------
Increase (Decrease) in Net Assets: 2004 2003
============================================================================================================================
Operations
----------------------------------------------------------------------------------------------------------------------------
Investment income--net ........................................... $ 36,051,644 $ 38,408,538
Realized gain (loss)--net ........................................ (15,384,933) 12,352,354
Change in unrealized appreciation/depreciation--net .............. 15,015,826 (15,964,533)
Dividends to Preferred Stock shareholders ........................ (2,455,390) (2,950,941)
-------------------------------
Net increase in net assets resulting from operations ............. 33,227,147 31,845,418
-------------------------------
============================================================================================================================
Dividends to Common Stock Shareholders
----------------------------------------------------------------------------------------------------------------------------
Investment income--net ........................................... (33,004,436) (32,613,922)
-------------------------------
Net decrease in net assets resulting from dividends to Common
Stock shareholders .............................................. (33,004,436) (32,613,922)
-------------------------------
============================================================================================================================
Net Assets Applicable to Common Stock
----------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets applicable to Common Stock 222,711 (768,504)
Beginning of year ................................................ 584,024,950 584,793,454
-------------------------------
End of year* ..................................................... $ 584,247,661 $ 584,024,950
===============================
* Undistributed investment income--net ........................ $ 7,444,216 $ 6,852,398
===============================
See Notes to Financial Statements.
MUNIYIELD NEW YORK INSURED FUND, INC. OCTOBER 31, 2004 15
[LOGO] Merrill Lynch Investment Managers
Financial Highlights
The following per share data and ratios have been derived
from information provided in the financial statements. For the Year Ended October 31,
-------------------------------------------------------------
Increase (Decrease) in Net Asset Value: 2004 2003 2002 2001 2000
================================================================================================================================
Per Share Operating Performance
--------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year ...... $ 14.81 $ 14.83 $ 15.01 $ 13.76 $ 13.02
-------------------------------------------------------------
Investment income--net .................. .91++ .97++ .94 .96 .87
Realized and unrealized gain
(loss)--net ............................ (.01) (.09) (.19) 1.26 .90
Dividends and distributions to
Preferred Stock shareholders:
Investment income--net ............... (.06) (.07) (.10) (.20) (.25)
Realized gain--net ................... -- -- --@ -- --
-------------------------------------------------------------
Total from investment operations ........ .84 .81 .65 2.02 1.52
-------------------------------------------------------------
Less dividends and distributions
to Common Stock shareholders:
Investment income--net ............... (.84) (.83) (.83) (.77) (.78)
Realized gain--net ................... -- -- --@ -- --
-------------------------------------------------------------
Total dividends and distributions
to Common Stock shareholders ........... (.84) (.83) (.83) (.77) (.78)
-------------------------------------------------------------
Net asset value, end of year ............ $ 14.81 $ 14.81 $ 14.83 $ 15.01 $ 13.76
=============================================================
Market price per share, end of year ..... $ 13.20 $ 13.25 $ 13.36 $ 14.02 $ 12.25
=============================================================
================================================================================================================================
Total Investment Return*
--------------------------------------------------------------------------------------------------------------------------------
Based on net asset value per share ...... 6.53% 6.19% 4.97% 15.57% 12.79%
=============================================================
Based on market price per share ......... 6.13% 5.45% 1.24% 21.26% 5.11%
=============================================================
================================================================================================================================
Ratios Based on Average Net Assets of Common Stock
--------------------------------------------------------------------------------------------------------------------------------
Total expenses, net of
reimbursement and excluding
reorganization expenses** .............. .94% .94% .96% .97% 1.01%
=============================================================
Total expenses, excluding
reorganization expenses** .............. .95% .94% .96% .97% 1.01%
=============================================================
Total expenses** ........................ .95% .94% .96% .97% 1.16%
=============================================================
Total investment income--net** .......... 6.23% 6.49% 6.37% 6.66% 7.21%
=============================================================
Amount of dividends to Preferred
Stock shareholders ..................... .42% .50% .66% 1.38% 1.93%
=============================================================
Investment income--net, to Common
Stock shareholders ..................... 5.81% 5.99% 5.71% 5.28% 5.28%
=============================================================
================================================================================================================================
Ratios Based on Average Net Assets of Common & Preferred Stock**
--------------------------------------------------------------------------------------------------------------------------------
Total expenses, net of
reimbursement and excluding
reorganization expenses ................ .65% .65% .66% .67% .68%
=============================================================
Total expenses, excluding
reorganization expenses ................ .65% .65% .66% .67% .68%
=============================================================
Total expenses .......................... .65% .65% .66% .67% .78%
=============================================================
Total investment income--net ............ 4.31% 4.51% 4.41% 4.59% 4.82%
=============================================================
================================================================================================================================
Ratios Based on Average Net Assets of Preferred Stock
--------------------------------------------------------------------------------------------------------------------------------
Dividends to Preferred Stock
shareholders ........................... .95% 1.13% 1.49% 3.07% 3.91%
=============================================================
16 MUNIYIELD NEW YORK INSURED FUND, INC. OCTOBER 31, 2004
Financial Highlights (concluded)
For the Year Ended October 31,
The following per share data and ratios have been derived --------------------------------------------------------
from information provided in the financial statements. 2004 2003 2002 2001 2000
==========================================================================================================================
Supplemental Data
--------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common
Stock, end of year (in thousands) ..... $584,248 $584,025 $584,793 $591,942 $542,709
========================================================
Preferred Stock outstanding, end
of year (in thousands) ................ $259,000 $259,000 $259,000 $259,000 $259,000
========================================================
Portfolio turnover ..................... 19.91% 51.89% 87.56% 83.08% 148.51%
========================================================
==========================================================================================================================
Leverage
--------------------------------------------------------------------------------------------------------------------------
Asset coverage per $1,000 .............. $ 3,256 $ 3,255 $ 3,258 $ 3,285 $ 3,095
========================================================
==========================================================================================================================
Dividends Per Share on Preferred Stock Outstanding
--------------------------------------------------------------------------------------------------------------------------
Series A--Investment income--net ....... $ 254 $ 249 $ 334 $ 791 $ 980
========================================================
Series B--Investment income--net ....... $ 203 $ 232 $ 305 $ 731 $ 941
========================================================
Series C+--Investment income--net ...... $ 240 $ 214 $ 356 $ 774 $ 661
========================================================
Series D+--Investment income--net ...... $ 231 $ 454 $ 503 $ 715 $ 634
========================================================
Series E+--Investment income--net ...... $ 251 $ 255 $ 356 $ 812 $ 653
========================================================
* 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
charges.
** Do not reflect the effect of dividends to Preferred Stock shareholders.
+ Series C, Series D and Series E were issued on March 6, 2000.
++ Based on average shares outstanding.
@ Amount is less than $(.01) per share.
See Notes to Financial Statements.
MUNIYIELD NEW YORK INSURED FUND, INC. OCTOBER 31, 2004 17
[LOGO] Merrill Lynch Investment Managers
Notes to Financial Statements
1. Significant Accounting Policies:
MuniYield New York Insured Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940, as amended, as a non-diversified, closed-end
management investment company. The Fund's financial statements are prepared in
conformity with U.S. generally accepted accounting principles, which may require
the use of management accruals and estimates. Actual results may differ from
these estimates. The Fund determines and makes available for publication the net
asset value of its Common Stock on a daily basis. The Fund's Common Stock is
listed on the New York Stock Exchange under the symbol MYN. 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 last available bid price in the
over-the-counter market or on the basis of values as obtained by a pricing
service. Pricing services use valuation matrixes that incorporate both
dealer-supplied valuations and valuation models. The procedures of the pricing
service and its valuations are reviewed by the officers of the Fund under the
general direction of the Board of Directors. Such valuations and procedures will
be reviewed periodically by the Board of Directors of the Fund. 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 written or
purchased are valued at the last sale price in the case of exchange-traded
options. In the case of options traded in the over-the-counter market, valuation
is the last asked price (options written) or the last bid price (options
purchased). Swap agreements are valued by quoted fair values received daily by
the Fund's pricing service. Short-term investments with a remaining maturity of
60 days or less are valued at amortized cost, which approximates market value,
under which method the investment is valued at cost and any premium or discount
is amortized on a straight line basis to maturity. Investments in open-end
investment companies are valued at their net asset value each business day.
Securities and other 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.
(b) Derivative financial instruments -- The Fund may engage in various portfolio
investment strategies both to increase the return of the Fund and to hedge, or
protect, its exposure to interest rate movements and movements in the securities
markets. Losses may arise due to changes in the value of the contract or if the
counterparty does not perform under the contract.
o Financial futures contracts -- The Fund may purchase or sell financial
futures contracts and options on such futures contracts. 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.
o Options -- The Fund may 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.
o Forward interest rate swaps -- The Fund may enter into forward interest
rate swaps. In a forward interest rate swap, the Fund and the counterparty
agree to make periodic net payments on a specified notional contract
amount, commencing on a specified future effective date, unless terminated
earlier. When the agreement is closed, the Fund records a realized gain or
loss in an amount equal to the value of the agreement.
(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.
18 MUNIYIELD NEW YORK INSURED FUND, INC. OCTOBER 31, 2004
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).
Realized gains and losses on security transactions are determined on the
identified cost basis. Dividend income is recorded on the ex-dividend dates.
Interest income is recognized on the accrual basis. The Fund amortizes all
premiums and discounts on debt securities.
(e) 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 .50% of the Fund's average weekly net assets, including
proceeds from the issuance of Preferred Stock. The Investment Adviser has agreed
to reimburse its management fee by the amount of management fees the Fund pays
to FAM indirectly through its investment in CMA New York Municipal Money Fund.
For the year ended October 31, 2004, FAM reimbursed the Fund in the amount of
$4,248.
For the year ended October 31, 2004, the Fund reimbursed FAM $16,087 for certain
accounting services.
Certain officers and/or directors of the Fund are officers and/or directors of
FAM, PSI, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities, for the
year ended October 31, 2004 were $247,795,449 and $156,836,816, respectively.
4. Stock Transactions:
The Fund is authorized to issue 200,000,000 shares of 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 stock without approval of the holders of Common Stock.
Preferred Stock
Auction Market Preferred Stocks are redeemable shares of Preferred Stock of the
Fund, with a par value of $.05 per share and a liquidation preference of $25,000
per share, plus accrued and unpaid dividends, that entitle their holders to
receive cash dividends at an annual rate that may vary for the successive
dividend periods. The yields in effect at October 31, 2004 were as follows:
Series A, 1.459%; Series B, 1.40%; Series C, 1.20%; Series D, 1.40%; and Series
E, 1.40%.
The Fund pays commissions to certain broker-dealers at the end of each auction
at an annual rate ranging from .25% to .375%, calculated on the proceeds of each
auction. For the year ended October 31, 2004, Merrill Lynch, Pierce, Fenner &
Smith Incorporated, an affiliate of FAM, earned $253,691 as commissions.
5. Distributions to Shareholders:
The Fund paid a tax-exempt income dividend to holders of Common Shares in the
amount of $.070000 per share on November 29, 2004 to shareholders of record on
November 12, 2004.
The tax character of distributions paid during the fiscal years ended October
31, 2004 and October 31, 2003 was as follows:
--------------------------------------------------------------------------------
10/31/2004 10/31/2003
--------------------------------------------------------------------------------
Distributions paid from:
Tax-exempt income .................... $35,459,826 $35,564,863
===============================
Total distributions .................... $35,459,826 $35,564,863
===============================
As of October 31, 2004, the components of accumulated earnings on a tax basis
were as follows:
-----------------------------------------------------------------------------
Undistributed tax-exempt income--net .................... $ 7,289,401
Undistributed long-term capital gains--net .............. --
------------
Total undistributed earnings--net ....................... 7,289,401
Capital loss carryforward ............................... (28,156,850)*
Unrealized gains--net ................................... 43,501,048**
------------
Total accumulated earnings--net ......................... $ 22,633,599
============
* On October 31, 2004, the Fund had a net capital loss carryforward of
$28,156,850, of which $8,566,493 expires in 2008, $3,007,157 expires in
2010 and $16,583,200 expires in 2012. This amount will be available to
offset like amounts of any future taxable gains.
** The difference between book-basis and tax-basis net unrealized gains is
attributable primarily to the tax deferral of losses on wash sales, the
tax deferral of losses on straddles, the difference between book and tax
amortization methods for premiums and discounts on fixed income securities
and the realization for tax purposes of unrealized gains on certain future
contracts.
MUNIYIELD NEW YORK INSURED FUND, INC. OCTOBER 31, 2004 19
[LOGO] Merrill Lynch Investment Managers
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors of
MuniYield New York Insured Fund, Inc.:
We have audited the accompanying statement of net assets, including the schedule
of investments, of MuniYield New York Insured Fund, Inc. as of October 31, 2004,
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
the financial highlights for each of the five years in the period then ended.
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 the standards of the Public Company
Accounting Oversight Board (United States). 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, 2004, by correspondence with the custodian
and brokers; where replies were not received from brokers we performed other
auditing procedures. 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
MuniYield New York Insured Fund, Inc. as of October 31, 2004, 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 its financial highlights for each of
the five years in the period then ended, in conformity with U.S. generally
accepted accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
December 14, 2004
Important Tax Information (unaudited)
All of the net investment income distributions paid by MuniYield New York
Insured Fund, Inc. during its taxable year ended October 31, 2004 qualify as
tax-exempt interest dividends for federal income tax purposes.
20 MUNIYIELD NEW YORK INSURED FUND, INC. OCTOBER 31, 2004
Quality Profile (unaudited)
The quality ratings of securities in the Fund as of October 31, 2004 were as
follows:
--------------------------------------------------------------------------------
Quality Rating Percent of
S&P/Moody's Total Investments
--------------------------------------------------------------------------------
AAA/Aaa ...................................................... 88.4%
AA/Aa ........................................................ 2.0
A/A .......................................................... 7.9
BBB/Baa ...................................................... 1.7
Other* ....................................................... --**
--------------------------------------------------------------------------------
* Includes portfolio holdings in short-term investments.
** Holdings are less than 0.1%.
Dividend Policy (unaudited)
The Fund's dividend policy is to distribute all or a portion of its net
investment income to its shareholders on a monthly basis. In order to provide
shareholders with a more stable level of dividend distributions, the Fund may at
times pay out less than the entire amount of net investment income earned in any
particular month and may at times in any month pay out such accumulated but
undistributed income in addition to net investment income earned in that month.
As a result, the dividends paid by the Fund for any particular month may be more
or less than the amount of net investment income earned by the Fund during such
month. The Fund's current accumulated but undistributed net investment income,
if any, is disclosed in the Statement of Net Assets, which comprises part of the
financial information included in this report.
MUNIYIELD NEW YORK INSURED FUND, INC. OCTOBER 31, 2004 21
[LOGO] Merrill Lynch Investment Managers
Automatic Dividend Reinvestment Plan (unaudited)
The following description of the Fund's Automatic Dividend Reinvestment Plan
(the "Plan") is sent to you annually as required by federal securities laws.
Pursuant to the Fund's Plan, unless a holder of Common Stock otherwise elects,
all dividend and capital gains distributions will be automatically reinvested by
The Bank of New York (the "Plan Agent"), as agent for shareholders in
administering the Plan, in additional shares of Common Stock of the Fund.
Holders of Common Stock who elect not to participate in the Plan will receive
all distributions in cash paid by check mailed directly to the shareholder of
record (or, if the shares are held in street or other nominee name then to such
nominee) by The Bank of New York, as dividend paying agent. Such participants
may elect not to participate in the Plan and to receive all distributions of
dividends and capital gains in cash by sending written instructions to The Bank
of New York, as dividend paying agent, at the address set forth below.
Participation in the Plan is completely voluntary and may be terminated or
resumed at any time without penalty by written notice if received by the Plan
Agent not less than ten days prior to any dividend record date; otherwise such
termination will be effective with respect to any subsequently declared dividend
or distribution.
Whenever the Fund declares an income dividend or capital gains distribution
(collectively referred to as "dividends") payable either in shares or in cash,
non-participants in the Plan will receive cash and participants in the Plan will
receive the equivalent in shares of Common Stock. The shares will be acquired by
the Plan Agent for the participant's account, depending upon the circumstances
described below, either (i) through receipt of additional unissued but
authorized shares of Common Stock from the Fund ("newly issued shares") or (ii)
by purchase of outstanding shares of Common Stock on the open market
("open-market purchases") on the New York Stock Exchange or elsewhere. If on the
payment date for the dividend, the net asset value per share of the Common Stock
is equal to or less than the market price per share of the Common Stock plus
estimated brokerage commissions (such conditions being referred to herein as
"market premium"), the Plan Agent will invest the dividend amount in newly
issued shares on behalf of the participant. The number of newly issued shares of
Common Stock to be credited to the participant's account will be determined by
dividing the dollar amount of the dividend by the net asset value per share on
the date the shares are issued, provided that the maximum discount from the then
current market price per share on the date of issuance may not exceed 5%. If, on
the dividend payment date, the net asset value per share is greater than the
market value (such condition being referred to herein as "market discount"), the
Plan Agent will invest the dividend amount in shares acquired on behalf of the
participant in open-market purchases.
In the event of a market discount on the dividend payment date, the Plan Agent
will have until the last business day before the next date on which the shares
trade on an "ex-dividend" basis or in no event more than 30 days after the
dividend payment date (the "last purchase date") to invest the dividend amount
in shares acquired in open-market purchases. It is contemplated that the Fund
will pay monthly income dividends. Therefore, the period during which
open-market purchases can be made will exist only from the payment date on the
dividend through the date before the next "ex-dividend" date, which typically
will be approximately ten days. If, before the Plan Agent has completed its
open-market purchases, the market price of a share of Common Stock exceeds the
net asset value per share, the average per share purchase price paid by the Plan
Agent may exceed the net asset value of the Fund's shares, resulting in the
acquisitions of fewer shares than if the dividend had been paid in newly issued
shares on the dividend payment date. Because of the foregoing difficulty with
respect to open-market purchases, the Plan provides that if the Plan Agent is
unable to invest the full dividend amount in open-market purchases during the
purchase period or if the market discount shifts to a market premium during the
purchase period, the Plan Agent will cease making open-market purchases and will
invest the uninvested portion of the dividend amount in newly issued shares at
the close of business on the last purchase date determined by dividing the
uninvested portion of the dividend by the net asset value per share.
The Plan Agent maintains all shareholders' accounts in the Plan and furnishes
written confirmation of all transactions in the account, including information
needed by shareholders for tax records. Shares in the account of each Plan
participant will be held by the Plan Agent in non-certificated form in the name
of the participant, and each shareholder's proxy will include those shares
purchased or received pursuant to the Plan. The Plan Agent will forward all
proxy solicitation materials to participants and vote proxies for shares held
pursuant to the Plan in accordance with the instructions of the participants.
In the case of shareholders such as banks, brokers or nominees which hold shares
of others who are the beneficial
22 MUNIYIELD NEW YORK INSURED FUND, INC. OCTOBER 31, 2004
owners, the Plan Agent will administer the Plan on the basis of the number of
shares certified from time to time by the record shareholders as representing
the total amount registered in the record shareholder's name and held for the
account of beneficial owners who are to participate in the Plan.
There will be no brokerage charges with respect to shares issued directly by the
Fund as a result of dividends or capital gains distributions payable either in
shares or in cash. However, each participant will pay a pro rata share of
brokerage commissions incurred with respect to the Plan Agent's open-market
purchases in connection with the reinvestment of dividends.
The automatic reinvestment of dividends and distributions will not relieve
participants of any federal, state or local income tax that may be payable (or
required to be withheld) on such dividends.
Shareholders participating in the Plan may receive benefits not available to
shareholders not participating in the Plan. If the market price plus commissions
of the Fund's shares is above the net asset value, participants in the Plan will
receive shares of the Fund at less than they could otherwise purchase them and
will have shares with a cash value greater than the value of any cash
distribution they would have received on their shares. If the market price plus
commissions is below the net asset value, participants will receive
distributions in shares with a net asset value greater than the value of any
cash distribution they would have received on their shares. However, there may
be insufficient shares available in the market to make distributions in shares
at prices below the net asset value. Also, since the Fund does not redeem
shares, the price on resale may be more or less than the net asset value.
The value of shares acquired pursuant to the Plan will generally be excluded
from gross income to the extent that the cash amount reinvested would be
excluded from gross income. If, when the Fund's shares are trading at a premium
over net asset value, the Fund issues shares pursuant to the Plan that have a
greater fair market value than the amount of cash reinvested, it is possible
that all or a portion of such discount (which may not exceed 5% of the fair
market value of the Fund's shares) could be viewed as a taxable distribution. If
the discount is viewed as a taxable distribution, it is also possible that the
taxable character of this discount would be allocable to all the shareholders,
including shareholders who do not participate in the Plan. Thus, shareholders
who do not participate in the Plan might be required to report as ordinary
income a portion of their distributions equal to their allocable share of the
discount.
Experience under the Plan may indicate that changes are desirable. Accordingly,
the Fund reserves the right to amend or terminate the Plan. There is no direct
service charge to participants in the Plan; however, the Fund reserves the right
to amend the Plan to include a service charge payable by the participants.
All correspondence concerning the Plan should be directed to the Plan Agent at
The Bank of New York, Church Street Station, P.O. Box 11258, New York, NY
10286-1258, Telephone: 800-432-8224.
MUNIYIELD NEW YORK INSURED FUND, INC. OCTOBER 31, 2004 23
[LOGO] Merrill Lynch Investment Managers
Officers and Directors (unaudited)
Number of
Portfolios in Other Public
Position(s) Length of Fund Complex Directorships
Held with Time Overseen by Held by
Name Address & Age Fund Served Principal Occupation(s) During Past 5 Years Director Director
====================================================================================================================================
Interested Director
------------------------------------------------------------------------------------------------------------------------------------
Terry K. P.O. Box 9011 President 1999 to President of the Merrill Lynch Investment Managers, 124 Funds None
Glenn* Princeton, NJ and present L.P. ("MLIM")/Fund Asset Management, L.P. 157 Portfolios
08543-9011 Director ("FAM")-advised funds since 1999; Chairman
Age: 64 (Americas Region) of MLIM from 2000 to 2002;
Executive Vice President of MLIM and FAM (which
terms as used herein include their corporate
predecessors) from 1983 to 2002; President of
FAM Distributors, Inc. ("FAMD") from 1986 to 2002
and Director thereof from 1991 to 2002; Executive
Vice President and Director of Princeton Services,
Inc. ("Princeton Services") from 1993 to 2002;
President of Princeton Administrators, L.P. from
1989 to 2002; Director of Financial Data Services,
Inc. since 1985.
------------------------------------------------------------------------------------------------------------------------
* Mr. Glenn is a director, trustee or member of an advisory board of certain other investment companies for which MLIM
or FAM acts as investment adviser. Mr. Glenn is an "interested person," as described in the Investment Company Act, of
the Fund based on his present and former positions with MLIM, FAM, FAMD, Princeton Services and Princeton
Administrators, L.P. The Director's term is unlimited. Directors serve until their resignation, removal or death, or
until December 31 of the year in which they turn 72. As Fund President, Mr. Glenn serves at the pleasure of the Board
of Directors.
====================================================================================================================================
Independent Directors*
------------------------------------------------------------------------------------------------------------------------------------
James H. P.O. Box 9095 Director 1995 to Director, The China Business Group, Inc. since 1996 38 Funds None
Bodurtha Princeton, NJ present and Executive Vice President thereof from 1996 to 55 Portfolios
08543-9095 2003; Chairman of the Board, Berkshire Holding
Age: 60 Corporation since 1980; Partner, Squire, Sanders &
Dempsey from 1980 to 1993.
------------------------------------------------------------------------------------------------------------------------------------
Joe Grills P.O. Box 9095 Director 2002 to Member of the Committee of Investment of Employee 38 Funds Kimco Realty
Princeton, NJ present Benefit Assets of the Association of Financial 55 Portfolios Corporation
08543-9095 Professionals ("CIEBA") since 1986; Member of
Age: 69 CIEBA's Executive Committee since 1988 and its
Chairman from 1991 to 1992; Assistant Treasurer
of International Business Machines Corporation
("IBM") and Chief Investment Officer of IBM
Retirement Funds from 1986 to 1993; Member of
the Investment Advisory Committee of the State of
New York Common Retirement Fund since 1989;
Member of the Investment Advisory Committee of
the Howard Hughes Medical Institute from 1997 to
2000; Director, Duke University Management Company
from 1992 to 2004, Vice Chairman thereof from 1998
to 2004 and Director Emeritus thereof since 2004;
Director, LaSalle Street Fund from 1995 to 2001;
Director, Kimco Realty Corporation since 1997;
Member of the Investment Advisory Committee of
the Virginia Retirement System since 1998 and Vice
Chairman thereof since 2002; Director, Montpelier
Foundation since 1998 and its Vice Chairman since
2000; Member of the Investment Committee of the
Woodberry Forest School since 2000; Member of the
Investment Committee of the National Trust for
Historic Preservation since 2000.
24 MUNIYIELD NEW YORK INSURED FUND, INC. OCTOBER 31, 2004
Officers and Directors (unaudited) (continued)
Number of
Portfolios in Other Public
Position(s) Length of Fund Complex Directorships
Held with Time Overseen by Held by
Name Address & Age Fund Served Principal Occupation(s) During Past 5 Years Director Director
====================================================================================================================================
Independent Directors* (concluded)
------------------------------------------------------------------------------------------------------------------------------------
Herbert I. P.O. Box 9095 Director 1992 to John M. Olin Professor of Humanities, New York 38 Funds None
London Princeton, NJ present University since 1993 and Professor thereof since 55 Portfolios
08543-9095 1980; President, Hudson Institute since 1997 and
Age: 65 Trustee thereof since 1980; Dean, Gallatin Division
of New York University from 1976 to 1993;
Distinguished Fellow, Herman Kahn Chair, Hudson
Institute from 1984 to 1985; Director, Damon Corp.
from 1991 to 1995; Overseer, Center for Naval
Analyses from 1983 to 1993.
------------------------------------------------------------------------------------------------------------------------------------
Roberta P.O. Box 9095 Director 1999 to Shareholder, Modrall, Sperling, Roehl, Harris & 38 Funds None
Cooper Princeton, NJ present Sisk, P.A. since 1993; President, American Bar 55 Portfolios
Ramo 08543-9095 Association from 1995 to 1996 and Member of the Board
Age: 62 of Governors thereof from 1994 to 1997; Shareholder,
Poole, Kelly & Ramo, Attorneys at Law, P.C. from
1977 to 1993; Director of ECMC Group (service
provider to students, schools and lenders) since
2001; Director, United New Mexico Bank (now
Wells Fargo) from 1983 to 1988; Director, First
National Bank of New Mexico (now Wells Fargo)
from 1975 to 1976; Vice President, American
Law Institute since 2004.
------------------------------------------------------------------------------------------------------------------------------------
Robert S. P.O. Box 9095 Director 2002 to Principal of STI Management (investment adviser) 38 Funds None
Salomon, Princeton, NJ present since 1994; Chairman and CEO of Salomon Brothers 55 Portfolios
Jr. 08543-9095 Asset Management from 1992 to 1995; Chairman
Age: 67 of Salomon Brothers equity mutual funds from 1992
to 1995; regular columnist with Forbes Magazine
from 1992 to 2002; Director of Stock Research and
U.S. Equity Strategist at Salomon Brothers from 1975
to 1991; Trustee, Common fund from 1980 to 2001.
------------------------------------------------------------------------------------------------------------------------------------
Stephen B. P.O. Box 9095 Director 2002 to Chairman of Fernwood Advisors, Inc. (investment 39 Funds None
Swensrud Princeton, NJ present adviser) since 1996; Principal, Fernwood Associates 56 Portfolios
08543-9095 (financial consultants) since 1975; Chairman of R.P.P.
Age: 71 Corporation (manufacturing company) since 1978;
Director of International Mobile Communications,
Incorporated (telecommunications) since 1998.
------------------------------------------------------------------------------------------------------------------------
* The Director's term is unlimited. Directors serve until their resignation, removal or death, or until December 31 of
the year in which they turn 72.
MUNIYIELD NEW YORK INSURED FUND, INC. OCTOBER 31, 2004 25
[LOGO] Merrill Lynch Investment Managers
Officers and Directors (unaudited) (concluded)
Position(s) Length of
Held with Time
Name Address & Age Fund Served Principal Occupation(s) During Past 5 Years
====================================================================================================================================
Fund Officers*
------------------------------------------------------------------------------------------------------------------------------------
Donald C. P.O. Box 9011 Vice 1993 to First Vice President of MLIM and FAM since 1997 and Treasurer thereof since 1999;
Burke Princeton, NJ President present Senior Vice President and Treasurer of Princeton Services since 1999 and Director
08543-9011 and and since 2004; Vice President of FAMD since 1999; Vice President of MLIM and FAM from
Age: 44 Treasurer 1999 to 1990 to 1997; Director of MLIM Taxation since 1990.
present
------------------------------------------------------------------------------------------------------------------------------------
Kenneth A. P.O. Box 9011 Senior Vice 2002 to Managing Director of MLIM since 2000; Director (Municipal Tax-Exempt Fund
Jacob Princeton, NJ President present Management) of MLIM from 1997 to 2000.
08543-9011
Age: 53
------------------------------------------------------------------------------------------------------------------------------------
John M. P.O. Box 9011 Senior Vice 2002 to Managing Director of MLIM since 2000; Director (Municipal Tax-Exempt Fund
Loffredo Princeton, NJ President present Management) of MLIM from 1998 to 2000.
08543-9011
Age: 40
------------------------------------------------------------------------------------------------------------------------------------
Jeffrey P.O. Box 9011 Chief 2004 to Chief Compliance Officer of the MLIM/FAM-advised funds and First Vice President and
Hiller Princeton, NJ Compliance present Chief Compliance Officer of MLIM since 2004; Global Director of Compliance at
08543-9011 Officer Morgan Stanley Investment Management from 2002 to 2004; Managing Director and
Age: 53 Global Director of Compliance at Citigroup Asset Management from 2000 to 2002;
Chief Compliance Officer at Soros Fund Management in 2000; Chief Compliance Officer
at Prudential Financial from 1995 to 2000.
------------------------------------------------------------------------------------------------------------------------------------
Alice A. P.O. Box 9011 Secretary 2004 to Director (Legal Advisory) of MLIM since 2002; Vice President of MLIM from 1999 to
Pellegrino Princeton, NJ present 2002; Attorney associated with MLIM since 1997.
08543-9011
Age: 44
------------------------------------------------------------------------------------------------------------------------
* Officers of the Fund serve at the pleasure of the Board of Directors.
------------------------------------------------------------------------------------------------------------------------------------
Custodian
The Bank of New York
100 Church Street
New York, NY 10286
Transfer Agents
Common Stock:
The Bank of New York
101 Barclay Street -- 11 East
New York, NY 10286
Preferred Stock:
The Bank of New York
101 Barclay Street -- 7 West
New York, NY 10286
NYSE Symbol
MYN
------------------------------------------------------------------------------
Andre F. Perold resigned as a Director of the Fund effective October 22, 2004.
------------------------------------------------------------------------------
26 MUNIYIELD NEW YORK INSURED FUND, INC. OCTOBER 31, 2004
Availability of Quarterly Schedule of Investments
The Fund files its complete schedule of portfolio holdings with the Securities
and Exchange Commission ("SEC") for the first and third quarters of each fiscal
year on Form N-Q. The Fund's Forms N-Q are available on the SEC's Web site at
http://www.sec.gov. The Fund's Forms N-Q may also be reviewed and copied at the
SEC's Public Reference Room in Washington, DC. Information on the operation of
the Public Reference Room may be obtained by calling 1-800-SEC-0330.
Electronic Delivery
The Fund offers electronic delivery of communications to its shareholders. In
order to receive this service, you must register your account and provide us
with e-mail information. To sign up for this service, simply access this Web
site http://www.icsdelivery.com/live and follow the instructions. When you visit
this site, you will obtain a personal identification number (PIN). You will need
this PIN should you wish to update your e-mail address, choose to discontinue
this service and/or make any other changes to the service. This service is not
available for certain retirement accounts at this time.
MUNIYIELD NEW YORK INSURED FUND, INC. OCTOBER 31, 2004 27
[LOGO] Merrill Lynch Investment Managers www.mlim.ml.com
MuniYield New York Insured Fund, Inc. seeks to provide shareholders with as high
a level of current income exempt from federal income tax and New York State and
New York City personal income taxes as is consistent with its investment
policies and prudent investment management by investing primarily in a portfolio
of long-term municipal obligations the interest on which, in the opinion of bond
counsel to the issuer, is exempt from federal income tax and New York State and
New York City personal income taxes.
This report, including the financial information herein, is transmitted to
shareholders of MuniYield New York Insured Fund, Inc. for their information. It
is not a prospectus. Past performance results shown in this report should not be
considered a representation of future performance. The Fund has leveraged its
Common Stock and intends to remain leveraged 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.
A description of the policies and procedures that the Fund uses to determine how
to vote proxies relating to portfolio securities is available (1) without
charge, upon request, by calling toll-free 1-800-MER-FUND (1-800-637-3863); (2)
at www.mutualfunds.ml.com; and (3) on the Securities and Exchange Commission's
Web site at http://www.sec.gov. Information about how the Fund voted proxies
relating to securities held in the Fund's portfolio during the most recent
12-month period ended June 30 is available (1) at www.mutualfunds.ml.com and (2)
on the Securities and Exchange Commission's Web site at http://www.sec.gov.
MuniYield New York Insured Fund, Inc.
Box 9011
Princeton, NJ 08543-9011
#16159 -- 10/04
Item 2 - Code of Ethics - The registrant has adopted a code of ethics, as of the
end of the period covered by this report, that applies to the
registrant's principal executive officer, principal financial officer
and principal accounting officer, or persons performing similar
functions. A copy of the code of ethics is available without charge
upon request by calling toll-free 1-800-MER-FUND (1-800-637-3863).
Item 3 - Audit Committee Financial Expert - The registrant's board of directors
has determined that (i) the registrant has the following audit
committee financial experts serving on its audit committee and (ii)
each audit committee financial expert is independent: (1) Joe Grills,
(2) Andre F. Perold (resigned as of October 1, 2004), (3) Robert S.
Salomon, Jr., and (4) Stephen B. Swensrud.
Item 4 - Principal Accountant Fees and Services
(a) Audit Fees - Fiscal Year Ending October 31, 2004 - $28,000
Fiscal Year Ending October 31, 2003 - $26,000
(b) Audit-Related Fees - Fiscal Year Ending October 31, 2004 - $3,000
Fiscal Year Ending October 31, 2003 - $5,600
The nature of the services include assurance and related services
reasonably related to the performance of the audit of financial
statements not included in Audit Fees.
(c) Tax Fees - Fiscal Year Ending October 31, 2004 - $5,610
Fiscal Year Ending October 31, 2003 - $4,800
The nature of the services include tax compliance, tax advice and tax
planning.
(d) All Other Fees - Fiscal Year Ending October 31, 2004 - $0
Fiscal Year Ending October 31, 2003 - $0
(e)(1) The registrant's audit committee (the "Committee") has adopted
policies and procedures with regard to the pre-approval of services.
Audit, audit-related and tax compliance services provided to the
registrant on an annual basis require specific pre-approval by the
Committee. The Committee also must approve other non-audit services
provided to the registrant and those non-audit services provided to the
registrant's affiliated service providers that relate directly to the
operations and the financial reporting of the registrant. Certain of
these non-audit services that the Committee believes are a) consistent
with the SEC's auditor independence rules and b) routine and recurring
services that will not impair the independence of the independent
accountants may be approved by the Committee without consideration on a
specific case-by-case basis ("general pre-approval"). However, such
services will only be deemed pre-approved provided that any individual
project does not exceed $5,000 attributable to the registrant or
$50,000 for all of the registrants the Committee oversees. Any proposed
services exceeding the pre-approved cost levels will require specific
pre-approval by the Committee, as will any other services not subject
to general pre-approval (e.g., unanticipated but permissible services).
The Committee is informed of each service approved subject to general
pre-approval at the next regularly scheduled in-person board meeting.
(e)(2) 0%
(f) Not Applicable
(g) Fiscal Year Ending October 31, 2004 - $13,270,096
Fiscal Year Ending October 31, 2003 - $18,737,552
(h) The registrant's audit committee has considered and determined that
the provision of non-audit services that were rendered to the
registrant's investment adviser and any entity controlling, controlled
by, or under common control with the investment adviser that provides
ongoing services to the registrant that were not pre-approved pursuant
to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible
with maintaining the principal accountant's independence.
Regulation S-X Rule 2-01(c)(7)(ii) - $945,000, 0%
Item 5 - Audit Committee of Listed Registrants - The following individuals are
members of the registrant's separately-designated standing audit
committee established in accordance with Section 3(a)(58)(A) of the
Exchange Act (15 U.S.C. 78c(a)(58)(A)):
James H. Bodurtha
Joe Grills
Herbert I. London
Andre F. Perold (resigned as of October 1, 2004)
Roberta Cooper Ramo
Robert S. Solomon, Jr.
Stephen B. Swensrud
Item 6 - Schedule of Investments - Not Applicable
Item 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies - Proxy Voting Policies and Procedures
Each Fund's Board of Directors/Trustees has delegated to Merrill Lynch
Investment Managers, L.P. and/or Fund Asset Management, L.P. (the
"Investment Adviser") authority to vote all proxies relating to the
Fund's portfolio securities. The Investment Adviser has adopted
policies and procedures ("Proxy Voting Procedures") with respect to the
voting of proxies related to the portfolio securities held in the
account of one or more of its clients, including a Fund. Pursuant to
these Proxy Voting Procedures, the Investment Adviser's primary
objective when voting proxies is to make proxy voting decisions solely
in the best interests of each Fund and its shareholders, and to act in
a manner that the Investment Adviser believes is most likely to enhance
the economic value of the securities held by the Fund. The Proxy Voting
Procedures are designed to ensure that that the Investment Adviser
considers the interests of its clients, including the Funds, and not
the interests of the Investment Adviser, when voting proxies and that
real (or perceived) material conflicts that may arise between the
Investment Adviser's interest and those of the Investment Adviser's
clients are properly addressed and resolved.
In order to implement the Proxy Voting Procedures, the Investment
Adviser has formed a Proxy Voting Committee (the "Committee"). The
Committee is comprised of the Investment Adviser's Chief Investment
Officer (the "CIO"), one or more other senior investment professionals
appointed by the CIO, portfolio managers and investment analysts
appointed by the CIO and any other personnel the CIO deems appropriate.
The Committee will also include two non-voting representatives from the
Investment Adviser's Legal department appointed by the Investment
Adviser's General Counsel. The Committee's membership shall be limited
to full-time employees of the Investment Adviser. No person with any
investment banking, trading, retail brokerage or research
responsibilities for the Investment Adviser's affiliates may serve as a
member of the Committee or participate in its decision making (except
to the extent such person is asked by the Committee to present
information to the Committee, on the same basis as other interested
knowledgeable parties not affiliated with the Investment Adviser might
be asked to do so). The Committee determines how to vote the proxies of
all clients, including a Fund, that have delegated proxy voting
authority to the Investment Adviser and seeks to ensure that all votes
are consistent with the best interests of those clients and are free
from unwarranted and inappropriate influences. The Committee
establishes general proxy voting policies for the Investment Adviser
and is responsible for determining how those policies are applied to
specific proxy votes, in light of each issuer's unique structure,
management, strategic options and, in certain circumstances, probable
economic and other anticipated consequences of alternate actions. In so
doing, the Committee may determine to vote a particular proxy in a
manner contrary to its generally stated policies. In addition, the
Committee will be responsible for ensuring that all reporting and
recordkeeping requirements related to proxy voting are fulfilled.
The Committee may determine that the subject matter of a recurring
proxy issue is not suitable for general voting policies and requires a
case-by-case determination. In such cases, the Committee may elect not
to adopt a specific voting policy applicable to that issue. The
Investment Adviser believes that certain proxy voting issues require
investment analysis - such as approval of mergers and other significant
corporate transactions - akin to investment decisions, and are,
therefore, not suitable for general guidelines. The Committee may elect
to adopt a common position for the Investment Adviser on certain proxy
votes that are akin to investment decisions, or determine to permit the
portfolio manager to make individual decisions on how best to maximize
economic value for a Fund (similar to normal buy/sell investment
decisions made by such portfolio managers). While it is expected that
the Investment Adviser will generally seek to vote proxies over which
the Investment Adviser exercises voting authority in a uniform manner
for all the Investment Adviser's clients, the Committee, in conjunction
with a Fund's portfolio manager, may determine that the Fund's specific
circumstances require that its proxies be voted differently.
To assist the Investment Adviser in voting proxies, the Committee has
retained Institutional Shareholder Services ("ISS"). ISS is an
independent adviser that specializes in providing a variety of
fiduciary-level proxy-related services to institutional investment
managers, plan sponsors, custodians, consultants, and other
institutional investors. The services provided to the Investment
Adviser by ISS include in-depth research, voting recommendations
(although the Investment Adviser is not obligated to follow such
recommendations), vote execution, and recordkeeping. ISS will also
assist the Fund in fulfilling its reporting and recordkeeping
obligations under the Investment Company Act.
The Investment Adviser's Proxy Voting Procedures also address special
circumstances that can arise in connection with proxy voting. For
instance, under the Proxy Voting Procedures, the Investment Adviser
generally will not seek to vote proxies related to portfolio securities
that are on loan, although it may do so under certain circumstances. In
addition, the Investment Adviser will vote proxies related to
securities of foreign issuers only on a best efforts basis and may
elect not to vote at all in certain countries where the Committee
determines that the costs associated with voting generally outweigh the
benefits. The Committee may at any time override these general policies
if it determines that such action is in the best interests of a Fund.
From time to time, the Investment Adviser may be required to vote proxies in
respect of an issuer where an affiliate of the Investment Adviser (each, an
"Affiliate"), or a money management or other client of the Investment Adviser
(each, a "Client") is involved. The Proxy Voting Procedures and the Investment
Adviser's adherence to those procedures are designed to address such conflicts
of interest. The Committee intends to strictly adhere to the Proxy Voting
Procedures in all proxy matters, including matters involving Affiliates and
Clients. If, however, an issue representing a non-routine matter that is
material to an Affiliate or a widely known Client is involved such that the
Committee does not reasonably believe it is able to follow its guidelines (or if
the particular proxy matter is not addressed by the guidelines) and vote
impartially, the Committee may, in its discretion for the purposes of ensuring
that an independent determination is reached, retain an independent fiduciary to
advise the Committee on how to vote or to cast votes on behalf of the Investment
Adviser's clients.
In the event that the Committee determines not to retain an independent
fiduciary, or it does not follow the advice of such an independent
fiduciary, the powers of the Committee shall pass to a subcommittee,
appointed by the CIO (with advice from the Secretary of the Committee),
consisting solely of Committee members selected by the CIO. The CIO
shall appoint to the subcommittee, where appropriate, only persons
whose job responsibilities do not include contact with the Client and
whose job evaluations would not be affected by the Investment Adviser's
relationship with the Client (or failure to retain such relationship).
The subcommittee shall determine whether and how to vote all proxies on
behalf of the Investment Adviser's clients or, if the proxy matter is,
in their judgment, akin to an investment decision, to defer to the
applicable portfolio managers, provided that, if the subcommittee
determines to alter the Investment Adviser's normal voting guidelines
or, on matters where the Investment Adviser's policy is case-by-case,
does not follow the voting recommendation of any proxy voting service
or other independent fiduciary that may be retained to provide research
or advice to the Investment Adviser on that matter, no proxies relating
to the Client may be voted unless the Secretary, or in the Secretary's
absence, the Assistant Secretary of the Committee concurs that the
subcommittee's determination is consistent with the Investment
Adviser's fiduciary duties
In addition to the general principles outlined above, the Investment
Adviser has adopted voting guidelines with respect to certain recurring
proxy issues that are not expected to involve unusual circumstances.
These policies are guidelines only, and the Investment Adviser may
elect to vote differently from the recommendation set forth in a voting
guideline if the Committee determines that it is in a Fund's best
interest to do so. In addition, the guidelines may be reviewed at any
time upon the request of a Committee member and may be amended or
deleted upon the vote of a majority of Committee members present at a
Committee meeting at which there is a quorum.
The Investment Adviser has adopted specific voting guidelines with
respect to the following proxy issues:
o Proposals related to the composition of the Board of Directors of issuers
other than investment companies. As a general matter, the Committee
believes that a company's Board of Directors (rather than shareholders) is
most likely to have access to important, nonpublic information regarding a
company's business and prospects, and is therefore best-positioned to set
corporate policy and oversee management. The Committee, therefore,
believes that the foundation of good corporate governance is the election
of qualified, independent corporate directors who are likely to diligently
represent the interests of shareholders and oversee management of the
corporation in a manner that will seek to maximize shareholder value over
time. In individual cases, the Committee may look at a nominee's history
of representing shareholder interests as a director of other companies or
other factors, to the extent the Committee deems relevant.
o Proposals related to the selection of an issuer's independent auditors. As
a general matter, the Committee believes that corporate auditors have a
responsibility to represent the interests of shareholders and provide an
independent view on the propriety of financial reporting decisions of
corporate management. While the Committee will generally defer to a
corporation's choice of auditor, in individual cases, the Committee may
look at an auditors' history of representing shareholder interests as
auditor of other companies, to the extent the Committee deems relevant.
o Proposals related to management compensation and employee benefits. As a
general matter, the Committee favors disclosure of an issuer's
compensation and benefit policies and opposes excessive compensation, but
believes that compensation matters are normally best determined by an
issuer's board of directors, rather than shareholders. Proposals to
"micro-manage" an issuer's compensation practices or to set arbitrary
restrictions on compensation or benefits will, therefore, generally not be
supported.
o Proposals related to requests, principally from management, for approval
of amendments that would alter an issuer's capital structure. As a general
matter, the Committee will support requests that enhance the rights of
common shareholders and oppose requests that appear to be unreasonably
dilutive.
o Proposals related to requests for approval of amendments to an issuer's
charter or by-laws. As a general matter, the Committee opposes poison pill
provisions.
o Routine proposals related to requests regarding the formalities of
corporate meetings.
o Proposals related to proxy issues associated solely with holdings of
investment company shares. As with other types of companies, the Committee
believes that a fund's Board of Directors (rather than its shareholders)
is best-positioned to set fund policy and oversee management. However, the
Committee opposes granting Boards of Directors authority over certain
matters, such as changes to a fund's investment objective, that the
Investment Company Act envisions will be approved directly by
shareholders.
o Proposals related to limiting corporate conduct in some manner that
relates to the shareholder's environmental or social concerns. The
Committee generally believes that annual shareholder meetings are
inappropriate forums for discussion of larger social issues, and opposes
shareholder resolutions "micromanaging" corporate conduct or requesting
release of information that would not help a shareholder evaluate an
investment in the corporation as an economic matter. While the Committee
is generally supportive of proposals to require corporate disclosure of
matters that seem relevant and material to the economic interests of
shareholders, the Committee is generally not supportive of proposals to
require disclosure of corporate matters for other purposes.
Item 8 - Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers - Not Applicable
Item 9 - Submission of Matters to a Vote of Security Holders - Not Applicable
Item 10 - Controls and Procedures
10(a) - The registrant's certifying officers have reasonably designed such
disclosure controls and procedures to ensure material information
relating to the registrant is made known to us by others particularly
during the period in which this report is being prepared. The
registrant's certifying officers have determined that the registrant's
disclosure controls and procedures are effective based on our evaluation
of these controls and procedures as of a date within 90 days prior to
the filing date of this report.
10(b) - There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR
270.30a-3(d)) that occurred during the second fiscal half-year of the
period covered by this report that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting.
Item 11 - Exhibits attached hereto
11(a)(1) - Code of Ethics - See Item 2
11(a)(2) - Certifications - Attached hereto
11(a)(3) - Not Applicable
11(b) - Certifications - Attached hereto
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
MuniYield New York Insured Fund, Inc.
By: /s/ Terry K. Glenn
-----------------------
Terry K. Glenn,
President of
MuniYield New York Insured Fund, Inc.
Date: December 13, 2004
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Terry K. Glenn
-----------------------
Terry K. Glenn,
President of
MuniYield New York Insured Fund, Inc.
Date: December 13, 2004
By: /s/ Donald C. Burke
-----------------------
Donald C. Burke,
Chief Financial Officer of
MuniYield New York Insured Fund, Inc.
Date: December 13, 2004