UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-Q QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY Investment Company Act file number 811-9191 Name of Fund: MuniHoldings Insured Fund II, Inc. Fund Address: P.O. Box 9011 Princeton, NJ 08543-9011 Name and address of agent for service: Robert C. Doll, Jr., President, MuniHoldings Insured Fund II, 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: 09/30/05 Date of reporting period: 10/01/04 - 12/31/04 Item 1 - Schedule of Investments MuniHoldings Insured Fund II, Inc. Schedule of Investments as of December 31, 2004 (in Thousands) Face State Amount Municipal Bonds Value Alaska - 1.5% $ 2,995 Alaska Energy Authority, Power Revenue Refunding Bonds (Bradley Lake), 4th Series, 6% due 7/01/2020 (c) $ 3,605 2,000 Anchorage, Alaska, Water Revenue Refunding Bonds, 6% due 9/01/2024 (a) 2,265 1,700 Matanuska-Susitna Boro, Alaska, GO, Series A, 6% due 3/01/2010 (d)(e) 1,955 Arkansas - 0.7% 3,205 University of Arkansas, University Revenue Bonds (Fayetteville Campus), 5.50% due 12/01/2018 (b) 3,597 California - 16.6% 7,490 California Pollution Control Financing Authority, PCR, Refunding (Pacific Gas & Electric), AMT, Series A, 5.35% due 12/01/2016 (d) 8,095 California State Department of Water Resources, Power Supply Revenue Bonds, Series A: 6,865 5.375% due 5/01/2017 (j) 7,612 5,400 5.25% due 5/01/2020 5,801 5,040 5.375% due 5/01/2022 5,427 4,675 California State, GO, Refunding, RIB, AMT, Series 777X, 8.42% due 12/01/2021 (d)(f) 4,933 2,100 California State, Various Purpose, GO, 5.50% due 4/01/2028 2,260 2,800 Compton, California, Unified School District, GO (Election of 2002), Series B, 5.50% due 6/01/2025 (d) 3,106 Golden State Tobacco Securitization Corporation of California, Tobacco Settlement Revenue Bonds, Series B: 3,000 5.50% due 6/01/2018 3,135 2,000 5.75% due 6/01/2021 2,128 5,980 5.75% due 6/01/2022 6,342 2,700 5.375% due 6/01/2028 (b) 2,845 1,010 5.60% due 6/01/2028 1,059 515 Los Angeles, California, Department of Water and Power, Electric Plant Revenue Refunding Bonds, RIB, Series 370, 9.71% due 2/15/2024 (f) 530 3,400 Los Angeles, California, Unified School District, GO (Election of 1997), Series F, 5% due 1/01/2028 (b) 3,526 11,750 Los Angeles, California, Unified School District, GO, Series A, 5% due 1/01/2028 (d) 12,186 4,240 Modesto, California, Schools Infrastructure Financing Agency, Special Tax Bonds, 5.50% due 9/01/2036 (a) 4,608 5,000 Port Oakland, California, Revenue Refunding Bonds, AMT, Series L, 5.375% due 11/01/2027 (b) 5,235 Portfolio Abbreviations To simplify the listings of MuniHoldings Insured Fund II, Inc.'s portfolio holdings in the Schedule of Investments, we have abbreviated the names of many of the securities according to the list below. AMT Alternative Minimum Tax (subject to) COP Certificates of Participation EDA Economic Development Authority GO General Obligation Bonds HDA Housing Development Authority HFA Housing Finance Agency IDR Industrial Development Revenue Bonds PCR Pollution Control Revenue Bonds RIB Residual Interest Bonds S/F Single-Family MuniHoldings Insured Fund II, Inc. (concluded) Schedule of Investments as of December 31, 2004 (in Thousands) Face State Amount Municipal Bonds Value California (concluded) $ 1,500 Port Oakland, California, Trust Receipts, Revenue Bonds, AMT, Class R, Series K, 9.175% due 11/01/2021 (b)(f) $ 1,762 2,250 Sacramento County, California, Sanitation District Financing Authority, Revenue Refunding Bonds, RIB, Series 366, 9.462% due 12/01/2027 (f) 2,440 1,250 San Francisco, California, City and County Airport Commission, International Airport, Special Facilities Lease Revenue Bonds (SFO Fuel Company LLC), AMT, Series A, 6.10% due 1/01/2020 (c) 1,372 3,000 University of California Revenue Bonds (Multiple Purpose Projects), Series Q, 5% due 9/01/2022 (c) 3,164 Colorado - 3.4% Aurora, Colorado, COP (a): 3,055 5.75% due 12/01/2019 3,440 3,230 5.75% due 12/01/2020 3,630 460 Colorado HFA, Revenue Refunding Bonds (S/F Program), AMT, Senior Series A-2, 7.50% due 4/01/2031 473 4,000 Colorado Health Facilities Authority, Hospital Revenue Refunding Bonds (Poudre Valley Health Care), Series A, 5.75% due 12/01/2023 (c) 4,450 4,975 Larimer County, Colorado, Poudre School District Number R-1, GO, 6% due 12/15/2010 (b)(e) 5,789 Connecticut - 2.7% 8,500 Connecticut State, HFA, Revenue Bonds (Housing Mortgage Finance Program), AMT, Series D-2, 5.15% due 11/15/2022 (d) 8,766 5,000 Connecticut State Health and Educational Facilities Authority, Revenue Refunding Bonds (University of Hartford), Series E, 5.50% due 7/01/2022 (g) 5,441 Florida - 1.1% 5,500 Dade County, Florida, Water and Sewer System Revenue Bonds, 5.25% due 10/01/2021 (b) 5,858 Idaho - 0.2% 990 Idaho Housing and Finance Association, S/F Mortgage Revenue Bonds, AMT, Series E, 6% due 1/01/2032 990 Illinois - 8.1% Chicago, Illinois, GO, Series A (b): 8,800 6% due 1/01/2021 9,998 9,330 6% due 1/01/2022 10,600 2,185 Chicago, Illinois, Neighborhoods Alive 21, GO, Series PG-A, 6% due 1/01/2017 (b) 2,497 7,300 Chicago, Illinois, O'Hare International Airport Revenue Bonds, 3rd Lien, AMT, Series B-2, 6% due 1/01/2029 (j) 8,103 1,600 Kane Cook and Du Page Counties, Illinois, School District Number 46, Elgin, GO, 6.50% due 1/01/2016 (c) 1,866 Lake Cook, Kane and McHenry Counties, Illinois, Community Unit School District N220, GO (b): 8,035 6% due 12/01/2010 (e) 9,337 125 6% due 12/01/2020 142 Indiana - 2.0% 9,280 Shelbyville, Indiana, Elementary School Building Corporation Revenue Bonds, First Mortgage, 5.75% due 1/15/2009 (c)(e) 10,506 Kansas - 1.3% 3,510 Kansas State Development Finance Authority, Health Facilities Revenue Bonds (Sisters of Charity Leavenworth), Series J, 6.125% due 12/01/2020 3,916 2,805 Sedgwick and Shawnee Counties, Kansas, S/F Mortgage Revenue Bonds, AMT, Series A-2, 6.20% due 12/01/2033 (h)(i) 2,923 Louisiana - 1.4% 2,000 Louisiana Local Government, Environmental Facilities, Community Development Authority Revenue Bonds (Capital Projects and Equipment Acquisition), Series A, 6.30% due 7/01/2030 (a) 2,194 5,000 Louisiana Public Facilities Authority, Mortgage Revenue Refunding Bonds (Baton Rouge General Medical Center Project), 5.25% due 7/01/2033 (d)(l) 5,228 Maryland - 1.0% 5,000 Maryland State Economic Development Corporation, Lease Revenue Bonds (Maryland Aviation Administration Facilities), AMT, 5.375% due 6/01/2022 (c) 5,354 Massachusetts - 3.9% 110 Massachusetts State, GO, Refunding, Series D, 5.375% due 8/01/2012 (d)(e) 124 1,105 Massachusetts State Industrial Finance Agency, Higher Education Revenue Refunding Bonds (Hampshire College Project), 5.80% due 10/01/2007 (e) 1,220 Massachusetts State Special Obligation Dedicated Tax Revenue Bonds (b): 2,655 5.25% due 1/01/2025 2,866 12,345 5.25% due 1/01/2026 13,270 Massachusetts State Water Resource Authority, Revenue Refunding Bonds, Series A (b): 1,270 6% due 8/01/2016 1,453 1,500 6% due 8/01/2017 1,717 Michigan - 2.4% 2,000 Detroit, Michigan, City School District, GO, Series A, 5.50% due 5/01/2021 (c) 2,237 1,000 Michigan State Hospital Finance Authority Revenue Refunding Bonds (Mercy Mount Clemens), Series A, 6% due 5/15/2014 (d) 1,123 Michigan State Strategic Fund, Limited Obligation Revenue Refunding Bonds (Detroit Edison Company Project), AMT (j): 2,000 Series A, 5.50% due 6/01/2030 2,114 5,000 Series C, 5.65% due 9/01/2029 5,295 1,500 Saint Clair County, Michigan, Economic Revenue Refunding Bonds (Detroit Edison Company), RIB, Series 282, 10.49% due 8/01/2024 (a)(f) 1,917 Minnesota - 2.7% Prior Lake, Minnesota, Independent School District Number 719, GO (c): 2,555 5.50% due 2/01/2016 2,816 1,830 5.50% due 2/01/2017 2,013 3,570 5.50% due 2/01/2018 3,928 2,840 5.50% due 2/01/2019 3,124 2,185 Sauk Rapids, Minnesota, Independent School District Number 47, GO, Series A, 5.625% due 2/01/2018 (d) 2,449 Mississippi - 0.9% 3,725 Mississippi Business Finance Corporation, Mississippi, PCR, Refunding (System Energy Resources Inc. Project), 5.875% due 4/01/2022 3,736 1,000 Walnut Grove, Mississippi, Correctional Authority, COP, 6% due 11/01/2009 (a)(e) 1,166 Nebraska - 1.1% Omaha, Nebraska, Convention Hotel Corporation, Convention Center Revenue Bonds, First Tier, Series A (a): 1,410 5.50% due 4/01/2020 1,572 3,985 5.50% due 4/01/2022 4,424 Nevada - 3.9% 1,750 Clark County, Nevada, IDR (Power Company Project), AMT, Series A, 6.70% due 6/01/2022 (b) 1,795 7,000 Las Vegas, Nevada, New Convention and Visitors Authority Revenue Bonds, 5.75% due 7/01/2016 (a) 7,853 395 Nevada Housing Division, S/F Mortgage Revenue Bonds, AMT, Series A-2, 6.30% due 4/01/2022 (d) 397 Truckee Meadows, Nevada, Water Authority, Water Revenue Bonds, Series A (c): 5,000 5.50% due 7/01/2018 5,574 4,445 5.50% due 7/01/2019 4,955 New Jersey - 5.2% New Jersey EDA, Cigarette Tax Revenue Bonds: 8,590 5.75% due 6/15/2029 9,004 6,200 5.75% due 6/15/2034 6,742 11,000 New Jersey EDA, Motor Vehicle Surcharge Revenue Bonds, Series A, 5.25% due 7/01/2033 (d) 11,720 New Mexico - 1.0% 5,000 Farmington, New Mexico, PCR, Refunding (Public Service Company of San Juan), Series C, 5.70% due 12/01/2016 (a) 5,397 New York - 9.7% 14,000 Nassau Health Care Corporation, New York, Health System Revenue Bonds, 5.75% due 8/01/2009 (c)(e) 16,147 5,000 New York City, New York, GO, Refunding, Series G, 5.75% due 2/01/2017 (c) 5,257 5,570 New York City, New York, Sales Tax Asset Receivable Corporation Revenue Bonds, Series A, 5.25% due 10/15/2027 (a) 5,989 4,345 New York State Dormitory Authority Revenue Bonds (School Districts Financing Program), Series D, 5.25% due 10/01/2023 (d) 4,731 New York State Dormitory Authority, Revenue Refunding Bonds: 1,280 (School Districts Bond Financing Program), Series A, 5% due 4/01/2016 (d) 1,402 5,000 (State University Educational Facilities), 5.75% due 5/15/2010 (b)(e) 5,770 Tobacco Settlement Financing Corporation of New York Revenue Bonds, Series C-1: 7,850 5.50% due 6/01/2017 8,594 3,000 5.50% due 6/01/2021 3,285 North Carolina - 0.3% 1,445 North Carolina HFA, Home Ownership Revenue Bonds, AMT, Series 14-A, 5.35% due 1/01/2022 (a) 1,507 Ohio - 0.6% 1,745 Aurora, Ohio, City School District, COP, 6.10% due 12/01/2019 (d) 2,000 1,000 Kent State University, Ohio, University Revenue Bonds, 6% due 5/01/2024 (a) 1,136 Oklahoma - 0.7% 3,385 Claremore, Oklahoma, Public Works Authority, Capital Improvement Revenue Refunding Bonds, Series A, 5.25% due 6/01/2027 (c) 3,650 Pennsylvania - 2.8% Lycoming County, Pennsylvania, College Authority Revenue Bonds (Pennsylvania College of Technology) (d): 2,255 5.25% due 7/01/2007 (e) 2,438 3,345 5.25% due 7/01/2018 3,581 6,435 Pennsylvania State Higher Educational Facilities Authority, State System of Higher Education Revenue Bonds, Series O, 5.125% due 6/15/2024 (a) 6,724 2,090 Washington County, Pennsylvania, Capital Funding Authority Revenue Bonds (Capital Projects and Equipment Program), 6.15% due 12/01/2029 (a) 2,163 Rhode Island - 2.2% 5,555 Providence, Rhode Island, Redevelopment Agency, Revenue Refunding Bonds (Public Safety and Municipal Buildings), Series A, 5.75% due 4/01/2019 (a) 6,241 4,685 Rhode Island State Health and Educational Building Corporation Revenue Bonds (Rhode Island School of Design), Series D, 5.50% due 8/15/2031 (j) 5,055 South Carolina - 0.5% 2,695 South Carolina Housing Finance and Development Authority, Mortgage Revenue Refunding Bonds, AMT, Series A-2, 6.35% due 7/01/2019 (c) 2,796 Tennessee - 1.3% 3,500 Metropolitan Government of Nashville and Davidson County, Tennessee, Health and Education Facilities Board, Revenue Refunding Bonds (Ascension Health Credit), Series A, 5.875% due 11/15/2009 (a)(e) 4,020 1,080 Tennessee HDA, Revenue Bonds (Homeownership Program), AMT, Series 2B, 6% due 7/01/2011 1,127 1,515 Tennessee HDA, Revenue Refunding Bonds (Homeownership Program), AMT, Series 1, 6.05% due 7/01/2014 (d) 1,561 Texas - 9.1% 4,000 Austin, Texas, Convention Center Revenue Bonds (Convention Enterprises Inc.), Trust Certificates, Second Tier, Series B, 6% due 1/01/2023 (f) 4,240 16,000 Dallas-Fort Worth, Texas, International Airport Revenue Bonds, AMT, Series A, 5.50% due 11/01/2033 (d) 16,904 Dallas-Fort Worth, Texas, International Airport Revenue Refunding and Improvement Bonds, AMT, Series A (b): 1,835 5.875% due 11/01/2017 2,051 2,150 5.875% due 11/01/2018 2,402 2,390 5.875% due 11/01/2019 2,671 El Paso, Texas, Water and Sewer Revenue Refunding and Improvement Bonds, Series A (c): 2,650 6% due 3/01/2015 3,052 3,875 6% due 3/01/2016 4,460 4,115 6% due 3/01/2017 4,725 4,954 Houston, Texas, Community College System, Participation Interests, COP (Alief Center Project), 5.75% due 8/15/2022 (d) 5,466 1,850 Midland, Texas, Certificates of Obligation, GO, 6.10% due 3/01/2027 (b) 2,084 Utah - 1.5% 2,400 Salt Lake City, Utah, Municipal Building Authority, Lease Revenue Refunding Bonds (Municipal Improvements and Refunding Project), Series A, 5.40% due 10/15/2019 (a) 2,653 5,000 Weber County, Utah, Municipal Building Authority, Lease Revenue Refunding Bonds, 5.75% due 12/15/2019 (d) 5,491 Virginia - 0.9% 4,385 Virginia State, HDA, Commonwealth Mortgage Revenue Bonds, Series J, Sub-Series J-1, 5.20% due 7/01/2019 (d) 4,478 Washington - 4.2% 6,885 Bellevue, Washington, GO, Refunding, 5.50% due 12/01/2039 (d) 7,452 3,840 Chelan County, Washington, Public Utility District Number 001, Consolidated Revenue Bonds (Chelan Hydro System), AMT, Series A, 5.45% due 7/01/2037 (a) 4,000 3,445 Lewis County, Washington, GO, Refunding, 5.75% due 12/01/2024 (a) 3,843 2,500 Seattle, Washington, Municipal Light and Power Revenue Bonds, 6% due 10/01/2009 (d)(e) 2,886 3,500 Seattle, Washington, Water System Revenue Bonds, Series B, 6% due 7/01/2029 (b) 3,913 West Virginia - 1.2% 6,210 West Virginia State Housing Development Fund, Housing Finance Revenue Refunding Bonds, Series D, 5.20% due 11/01/2021 (d) 6,509 Wisconsin - 0.1% 750 Wisconsin State Health and Educational Facilities Authority Revenue Bonds (Blood Center of Southeastern Wisconsin Project), 5.75% due 6/01/2034 784 Puerto Rico - 1.0% 5,085 Puerto Rico Commonwealth, Public Improvement, GO, 5.125% due 7/01/2030 (c) 5,319 Total Municipal Bonds (Cost - $479,263) - 97.2% 513,047 Shares Held Short-Term Investments 5,589 Merrill Lynch Institutional Tax-Exempt Fund (k) 5,589 Total Short-Term Investments (Cost - $5,589) - 1.1% 5,589 Total Investments (Cost - $484,852*) - 98.3% 518,636 Other Assets Less Liabilities - 40.5% 213,375 Preferred Stock, at Redemption Value - (38.8%) (204,511) ----------- Net Assets Applicable to Common Stock - 100.0% $ 527,500 =========== * The cost and unrealized appreciation/depreciation of investments as of December 31, 2004, as computed for federal income tax purposes, were as follows: (in Thousands) Aggregate cost $ 484,958 =============== Gross unrealized appreciation $ 34,007 Gross unrealized depreciation (329) --------------- Net unrealized appreciation $ 33,678 =============== (a) AMBAC Insured. (b) FGIC Insured. (c) FSA Insured. (d) MBIA Insured. (e) Prerefunded. (f) Security has a maturity of more than one year, but has variable rate and demand features which qualify it as a short-term security. The rate disclosed is that currently in effect. This rate changes periodically based upon prevailing market rates. (g) Radian Insured. (h) FNMA Collateralized. (i) GNMA Collateralized. (j) XL Capital Insured. (k) 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) Dividend Affiliate Net Activity Income Merrill Lynch Institutional Tax-Exempt Fund (10,600) $ 25 (l) FHA Insured. Forward interest rate swaps outstanding as of December 31, 2004 were as follows: (in Thousands) Notional Unrealized Affiliate Amount Depreciation Receive a variable rate equal to a 7-day Bond Market Association Municipal Swap Index Rate and pay a fixed rate of 4.099% Broker, JPMorgan Chase Bank Expires January 2025 $ 25,000 $ (153) Receive a variable rate equal to a 7-day Bond Market Association Municipal Swap Index Rate and pay a fixed rate of 3.68% Broker, Morgan Stanley Capital Services Inc. Expires March 2015 $ 25,000 (127) ---------- Total $ (280) ========== Item 2 - Controls and Procedures 2(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. 2(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 last fiscal quarter 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 3 - Exhibits 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. MuniHoldings Insured Fund II, Inc. By: /s/ Robert C. Doll, Jr. Robert C. Doll, Jr., President MuniHoldings Insured Fund II, Inc. Date: February 24, 2005 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/ Robert C. Doll, Jr. Robert C. Doll, Jr. President MuniHoldings Insured Fund II, Inc. Date: February 24, 2005 By: /s/ Donald C. Burke Donald C. Burke Chief Financial Officer MuniHoldings Insured Fund II, Inc. Date: February 24, 2005