UNITED STATES
                    SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C. 20549

                               FORM N-CSR/A

          CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
                           INVESTMENT COMPANIES


Investment Company Act file number 811-08621

Name of Fund:  BlackRock MuniHoldings New Jersey Insured Fund, Inc.

Fund Address:  P.O. Box 9011
               Princeton, NJ  08543-9011

Name and address of agent for service:  Robert C. Doll, Jr., Chief Executive
       Officer, BlackRock MuniHoldings New Jersey 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: 07/31/06

Date of reporting period: 08/01/05 - 07/31/06

Item 1 - Report to Stockholders



Annual Report (As Restated)
July 31, 2006


MuniHoldings Fund II, Inc.

MuniHoldings New Jersey Insured
Fund, Inc.


(BULL Logo) Merrill Lynch Investment Managers
www.mlim.ml.com


Mercury Advisors
A Division of Merrill Lynch Investment Managers
www.mercury.ml.com


These reports, including the financial information herein, are transmitted to
shareholders of MuniHoldings Fund II, Inc. and MuniHoldings New Jersey Insured
Fund, Inc. for their information. This is not a prospectus. Past performance
results shown in these reports should not be considered a representation of
future performance. The Funds have leveraged their Common Stock and intend 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 Funds use to determine
how to vote proxies relating to portfolio securities is available (1)
without charge, upon request, by calling toll-free 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 Funds voted proxies
relating to securities held in the Funds' portfolios 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.



MuniHoldings Fund II, Inc.
MuniHoldings New Jersey Insured Fund, Inc.
P.O. Box 9011
Princeton, NJ 08543-9011


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MuniHoldings Fund II, Inc.

MuniHoldings New Jersey Insured Fund, Inc.


The financial statements and financial highlights in this report have been
restated as described in Note 6 to the financial statements. Other information
in this report affected by the restatement has been revised.


Announcement to Shareholders


On February 15, 2006, BlackRock, Inc. ("BlackRock") and Merrill Lynch & Co.,
Inc. ("Merrill Lynch") entered into an agreement to contribute Merrill Lynch's
investment management business, Merrill Lynch Investment Managers, L.P. and
certain affiliates (including Fund Asset Management, L.P. and Merrill Lynch
Investment Managers International Limited), to BlackRock to create a new
independent company ("New BlackRock") that will be one of the world's largest
asset management firms with over $1 trillion in assets under management (based
on combined assets under management as of June 30, 2006) (the "Transaction").
The Transaction is expected to close around the end of the third quarter of
2006, at which time the new company will operate under the BlackRock name.
Each Fund's Board of Directors and shareholders have approved a new investment
advisory agreement with BlackRock Advisors, Inc. or its successor on
substantially the same terms and for the same advisory fee as the Funds'
current investment advisory agreement with the Investment Adviser. BlackRock
Advisors, Inc. or its successor is expected to become the investment adviser
of the Funds upon the closing of the Transaction.



Quality Profiles as of July 31, 2006 (As Restated. See Note 6)


                                               Percent of
MuniHoldings Fund II, Inc.                       Total
By S&P/Moody's Rating                         Investments

AAA/Aaa                                           44.1%
AA/Aa                                              8.2
A/A                                               12.0
BBB/Baa                                           14.8
BB/Ba                                              0.5
B/B                                                1.2
CCC/Caa                                            2.3
NR (Not Rated)                                    16.0
Other*                                             0.9

 * Includes portfolio holdings in short-term investments and
   variable rate demand notes.



MuniHoldings New Jersey                        Percent of
Insured Fund, Inc.                               Total
By S&P/Moody's Rating                         Investments

AAA/Aaa                                           89.0%
AA/Aa                                              3.0
A/A                                                3.6
BBB/Baa                                            4.2
Other*                                             0.2

 * Includes portfolio holdings in short-term investments.



ANNUAL REPORTS                                                    JULY 31, 2006



A Letter From the President


Dear Shareholder

By now, you have probably heard of the important changes unfolding at Merrill
Lynch Investment Managers ("MLIM"). We have been communicating with
shareholders, via letters like this and in a detailed proxy mailing, about
MLIM's impending union with another highly regarded investment manager -
BlackRock, Inc. ("BlackRock"). This transaction marks the next chapter in
MLIM's growth story and, we believe, will be a benefit to our investors.

MLIM, a division of Merrill Lynch with over $583 billion in assets under
management, is a leading investment manager offering more than 100 investment
strategies in vehicles ranging from mutual funds to institutional portfolios.
BlackRock, with $464.1 billion in assets under management, is one of the
largest publicly traded investment management firms in the United States
managing assets on behalf of institutional and individual investors worldwide
through a variety of equity, fixed income, liquidity and alternative investment
products. At the completion of the transaction, which is expected around the
end of the third quarter of 2006, the resultant firm will be a top-10
investment manager worldwide with over $1 trillion in assets under management.*

The combined company, to be known as BlackRock, will provide a wide selection
of high-quality investment solutions across a range of asset classes and
investment styles. The organization will have over 4,500 employees in 18
countries and a major presence in key markets worldwide. MLIM and BlackRock
possess complementary capabilities that together create a well-rounded
organization uniting some of the finest money managers in the industry. The
firms share similar values and beliefs - each strives for excellence in all
areas, and both make investment performance their single most important
mission. As such, our combination only reinforces our commitment to
shareholders.

Most of MLIM's investment products - including mutual funds, separately
managed accounts, annuities and variable insurance funds - eventually will
carry the "BlackRock" name. This will be reflected in newspaper and online
information sources beginning in October. Your account statements will reflect
the BlackRock name beginning with the October month-end reporting period.
Unless otherwise communicated via a proxy statement, your funds will maintain
the same investment objectives that they do today. Importantly, the
MLIM/BlackRock union will not affect your brokerage account or your
relationship with your financial advisor. If you are a client of Merrill
Lynch, you will remain a client of Merrill Lynch.

As always, we thank you for entrusting us with your investment assets. We look
forward to continuing to serve your investment needs with even greater
strength and scale as the new BlackRock.


Sincerely,


(Robert C. Doll, Jr.)
Robert C. Doll, Jr.
President and Chief Investment Officer
Merrill Lynch Investment Managers


 * $1.047 trillion in assets under management as of June 30, 2006.
   Data, including assets under management, are as of June 30, 2006.



ANNUAL REPORTS                                                    JULY 31, 2006



A Discussion With Your Funds' Portfolio Managers


The Funds adopted a neutral stance on interest rates as the Federal Reserve
Board approached a pause in its prolonged interest rate tightening campaign.


Describe the recent market environment relative to municipal bonds.

During the past 12 months, long-term bond yields rose sharply while their
prices, which move in the opposite direction, declined. The drop in bond
prices largely reflects investors' focus on solid economic growth. Despite a
decline in gross domestic product growth between the first and second quarters
of 2006, U.S. economic activity so far this year has outpaced the 3.2% annual
growth rate posted in 2005. Rising commodity prices also have stoked
inflationary fears, further weighing on bond prices.

The Federal Reserve Board (the Fed) continued to raise short-term interest
rates at each of its meetings during the past year, bringing the federal
funds rate to 5.25%. Consequently, the yield curve continued to flatten, with
short-term interest rates rising more than longer-term interest rates. Overall,
30-year U.S. Treasury bond yields rose 60 basis points (.60%) during the
12-month period to 5.07%, while 10-year U.S. Treasury note yields rose 71
basis points to 4.99%. Municipal bond yields also rose in recent months,
although the tax-exempt market's strong technical position provided significant
price support. This allowed municipal bond prices to decline less than their
taxable counterparts. As measured by Municipal Market Data, yields on AAA-rated
issues maturing in 30 years rose just 12 basis points to 4.47%, and yields on
AAA-rated issues maturing in 10 years rose 33 basis points to 3.99%.

The rise in yields prompted a revival in investor demand for municipal
bonds. The increased demand also was triggered by seasonal factors that
served to generate large cash flows into investor accounts. Investors
received more than $40 billion in June and July from coupon income and the
proceeds from bond maturities and early redemptions. Consequently, municipal
bond fund flows have continued to be supportive. As reported by the
Investment Company Institute, open-end tax-exempt bond funds received net
new cash inflows of over $6.5 billion in the first six months of 2006,
compared to $2.5 billion during the same period in 2005.

Also contributing to the outperformance of the municipal bond market has been
declines in new issuance. During the past six months, more than $189 billion
in new long-term tax-exempt bonds was underwritten, a decline of 14% compared
to the same period a year earlier. Recent declines in issuance have largely
been the result of a 57% drop in refunding activity so far this year. Rising
bond yields have made the refinancing of existing higher-couponed debt issues
increasingly problematic, as the potential economic savings have rapidly
diminished. In addition, the improved fiscal condition of many state and local
governments has resulted in lower borrowing trends, with many new municipal
capital projects being financed from existing budget surpluses. The declines
in issuance have led many analysts to lower their annual issuance forecasts to
the $300 billion - $325 billion range. Lower annual issuance would further
solidify the tax-exempt market's already positive technical position.

Looking ahead, municipal market fundamentals are likely to remain favorable,
leading us to expect the tax-exempt market to perform at least as well as
comparable U.S. Treasury issues. Attractive yield ratios have continued to
draw both retail and institutional investors to the municipal market. Based on
this, and the prospect for reduced annual issuance in 2006, we believe the
municipal market should continue to perform well in the coming months.


MuniHoldings Fund II, Inc.

How did the Fund perform during the fiscal year?

For the 12-month period ended July 31, 2006, the Common Stock of MuniHoldings
Fund II, Inc. had net annualized yields of 6.00% and 6.30%, based on a year-
end per share net asset value of $14.82 and a per share market price of
$14.12, respectively, and $.889 per share income dividends. Over the same
period, the total investment return on the Fund's Common Stock was +4.89%,
based on a change in per share net asset value from $15.03 to $14.82, and
assuming reinvestment of all distributions.

The Fund's total return, based on net asset value, exceeded the +3.52% average
return of the Lipper General Municipal Debt Funds (Leveraged) category for the
12-month period. (Funds in this Lipper category invest primarily in municipal
debt issues rated in the top four credit-rating categories. These funds can be
leveraged via use of debt, preferred equity and/or reverse repurchase
agreements.)



ANNUAL REPORTS                                                    JULY 31, 2006



Fund performance during the year benefited from the continued contraction of
credit spreads in the municipal market. This had a favorable impact on our
positions in tax-backed and corporate-related debt, where we have a significant
concentration, as well as our healthcare-related holdings and land-secured
deals. The greatest contribution to performance came from the Fund's positions
in airline-related debt. While this sector lagged in the first six months,
airlines rallied strongly in the latter half of the period due to considerable
spread tightening. This proved beneficial to some of our larger holdings in
Continental Airlines, Inc., American Airlines Inc. and US Airways (formerly
America West Airlines). Also contributing to performance was strong
appreciation in the portfolio's holdings in the bonds of Pocahontas Parkway
Association, a toll road in Virginia that was constructed within the past few
years. The bonds increased in value as the roadway was sold to a private
entity resulting in the subsequent defeasance of the project's outstanding
debt. (When bonds are defeased, it typically means that the securities are
retired at their first call date, enabling the bonds to appreciate
significantly.) Finally, our yield curve strategy also proved advantageous.
For most of the period, the Fund was overweight in bonds with maturities
greater than 20 years. This benefited performance as the yield curve flattened
and longer-term bonds outperformed short-term issues.

For the six-month period ended July 31, 2006, the total investment return on
the Fund's Common Stock was +2.82%, based on a change in per share net asset
value from $14.84 to $14.82, and assuming reinvestment of all distributions.

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 distributions, 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 period?

Broadly speaking, we moved the portfolio from a slightly defensive stance to a
more neutral posture as the Fed appeared to be approaching a pause in its
interest rate-hiking campaign. Although both the Treasury and the municipal
yield curves continued to flatten during the past 12 months, the move was not
nearly as dramatic as we have seen in prior periods. Notably, the municipal
curve retained a positive slope, particularly relative to the Treasury curve,
which actually inverted early in 2006. This contributed to the municipal
market's and the Fund's positive performance.

The Fund maintained its focus on refundable, essential service securities from
high demand states. The lack of new-issue supply and increased demand for
municipal bonds has caused spreads to narrow in all sectors of the municipal
market. We took advantage of these tight spreads to move the Fund's exposure
to spread product to neutral while increasing its position in bonds exempt
from tax in specialty states. We believe this strategy should prove beneficial
with any shift in the demand/supply imbalance in both the high yield sector
and the broader municipal market.

For the six months ended July 31, 2006, the average yield for the Fund's
Auction Market Preferred Stock was 3.35% for Series A and 3.13% for Series B.
The Fed raised the short-term interest rate target 200 basis points during the
12-month period, and this continued to affect the Fund's borrowing costs. On
August 8, 2006, the Fed opted to pause its interest rate-hiking campaign and
is expected to be "data dependent" in determining monetary policy going
forward. As such, we would expect additional increases in the Fund's cost of
funds to be more limited. Despite the interest rate increases during the
period, the tax-exempt yield curve maintained a positive slope, allowing us to
borrow at a lower rate than where we invest. This continued to generate an
income benefit to the holders of Common Stock from the leveraging of Preferred
Stock. 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. (For a more complete explanation of the
benefits and risks of leveraging, see page 8 of this report to shareholders.)



ANNUAL REPORTS                                                    JULY 31, 2006



A Discussion With Your Funds' Portfolio Managers (concluded)


How would you characterize the Fund's position at the close of the period?

We remain focused on generating an attractive level of tax-exempt income for
our shareholders. The Fund ended the period fully invested and with an overall
neutral market posture. After 17 consecutive interest rate hikes, the Fed
paused its monetary tightening program in early August and has indicated that
it will look at the economic data when determining monetary policy going
forward. Because global economies and certain pockets of the U.S. economy
continue to show solid growth with higher headline inflationary figures, we
believe that it still may be early to become too aggressive in our investment
strategy. In our view, a neutral posture is prudent in the current environment
and should provide for competitive performance.


MuniHoldings New Jersey Insured Fund, Inc.

Describe conditions in the State of New Jersey.

Jon Corzine claimed victory in the state's November gubernatorial election
and, upon beginning his term in January, immediately faced the challenges of
the fiscal year 2007 budget. By the end of the second quarter, New Jersey had
failed to adopt a balanced budget for the new fiscal year (beginning July 1).
The point of contention was Governor Corzine's proposal to raise the state
sales tax to 7% from 6%. As a result, the governor ordered a shutdown of non-
essential state services for several days in early July until an agreement
could be reached with the State Assembly. In the past, deficit financing had
served as one alternative to deadlocked budget negotiations; however, the New
Jersey Supreme Court had recently prohibited the state from borrowing in order
to balance budgets. Nevertheless, throughout the shutdown, the rating agencies
maintained the state's ratings and outlook.

Ultimately, a $31 billion budget was adopted for fiscal year 2007. The 1%
sales tax increase was implemented and is expected to generate roughly
$1.2 billion in income. As part of the agreement with the Assembly, one-half
of the new sales tax receipts will be allocated to property tax rebates. The
budget also includes tax increases and surcharges on various items, such as
cigarettes, car rentals and luxury goods. Other key components in reducing the
projected $4.5 billion budget gap included approximately $2 billion in
spending reductions and freezes. The budget keeps state aid to municipalities
and school districts essentially flat for another year and, as such, local
property taxes are likely to increase. The budget also contributes $1.1
billion into the state pension system, exceeding the entire amount allocated
in the past 10 years. The adopted budget significantly reduces reliance on
onetime revenues and, therefore, is more structurally balanced than the
state's last several budgets - a positive from a credit rating perspective.

New Jersey has a high and growing debt burden com-pared to similarly rated
states. In addition, the state recently started a five-year, $6 billion debt
financing program for transportation projects, and funding of billions of
dollars in court-mandated school construction projects is yet to be
determined.


How did the Fund perform during the fiscal year?

For the 12-month period ended July 31, 2006, the Common Stock of MuniHoldings
New Jersey Insured Fund, Inc. had net annualized yields of 5.74% and 5.71%,
based on a year-end per share net asset value of $14.91 and a per share market
price of $14.98, respectively, and $.856 per share income dividends. Over the
same period, the total investment return on the Fund's Common Stock was
+1.09%, based on a change in per share net asset value from $15.62 to $14.91,
and assuming reinvestment of all distributions.

The Fund's total return, based on net asset value, trailed the +2.70% average
return of the Lipper New Jersey Municipal Debt Funds category for the 12-month
period. (Funds in this Lipper category limit their investment to those
securities exempt from taxation in New Jersey or a city in New Jersey.
Notably, the Fund was disadvantaged relative to many of its peers by its
conservative investment parameters. Specifically, the Fund is limited in its
ability to invest in lower-quality issues, which outperformed during the year
as credit spreads (versus higher-quality issues of comparable maturity)
tightened dramatically. Per its investment parameters, at least 80% of the
portfolio was invested in AAA-rated, insured bonds throughout the year.

Another factor that weighed on the Fund's performance was the fact that a
number of seasoned holdings with higher coupons were called by their issuers.
Given our limited ability to buy lower-rated issues and a decline in new-issue
supply during the period, particularly in the early months of 2006, it was
especially difficult to compensate for the income lost to calls.



ANNUAL REPORTS                                                    JULY 31, 2006



For the six-month period ended July 31, 2006, the total investment return on
the Fund's Common Stock was +.53%, based on a change in per share net asset
value from $15.24 to $14.91, and assuming reinvestment of all distributions.

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 distributions, 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 period?

For most of the fiscal year, the portfolio was positioned for the yield curve
flattening we had anticipated, and we saw little need to make significant
changes as the Fed tirelessly increased interest rates and the long end of the
curve outperformed. In more recent months, as the Fed approached the end of
its monetary tightening campaign and the curve appeared ready to resteepen, we
began to see opportunities in the intermediate maturity range. This is an area
that suffered most as interest rates rose and, in a resteepening scenario,
could be positioned for strong relative performance. To take advantage, in the
final three months of the fiscal year, we focused mainly on trimming some of
the short-term investments in the portfolio, particularly bonds that are
callable or likely to be called within the next year or two. With the proceeds,
we invested in bonds in the 10-year - 15-year portion of the curve. Despite a
decline in new municipal bond issuance, we had little trouble finding
opportunities in this maturity range. Throughout the year, we continued to
maintain a high-quality portfolio consistent with our conservative investment
parameters. Approximately 83% - 84% of the Fund's net assets was invested in
insured municipal paper.

For the six-month period ended July 31, 2006, the Fund's Auction Market
Preferred Stock had average yields as follows: Series A, 3.07%; Series B,
2.99%; Series C, 3.00%; Series D, 2.96%; and Series E, 2.94%. The Fed raised
the short-term interest rate target 200 basis points during the 12-month
period, and this continued to affect the Fund's borrowing costs. On August 8,
2006, the Fed opted to pause its interest rate-hiking campaign and is expected
to be "data dependent" in determining monetary policy going forward. As such,
we would expect additional increases in the Fund's cost of funds to be more
limited. Despite the interest rate increases during the period, the tax-exempt
yield curve maintained a positive slope, allowing us to borrow at a lower rate
than where we invest. This continued to generate an income benefit to the
holders of Common Stock from the leveraging of Preferred Stock. 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. (For a more complete explanation of the benefits and
risks of leveraging, see page 8 of this report to shareholders.)


How would you characterize the Fund's position at the close of the period?

At period-end, the Fund remained relatively neutral with respect to interest
rate risk. As mentioned earlier, our yield curve outlook changed in the final
months of the period on speculation that the Fed may be close to ending its
monetary tightening program. That pause in policy tightening came in early
August, affirming our revised yield curve strategy. Still, there remains
uncertainty as to whether the Fed will pursue additional interest rate hikes
down the road, as Chairman Bernanke and the governors have indicated that they
will let the economic and inflationary data guide their interest rate
decisions. Having said that, the consensus expectation is that economic growth
will continue to moderate, thereby alleviating inflationary pressures and
discouraging the Fed from pursuing further interest rate hikes. As such, we
will continue to seek out value closer to the middle of the municipal yield
curve, while maintaining a high-quality portfolio.


Robert A. DiMella, CFA
Vice President and Portfolio Manager
MuniHoldings Fund II, Inc.


Theodore R. Jaeckel Jr., CFA
Vice President and Portfolio Manager
MuniHoldings New Jersey Insured Fund, Inc.


August 9, 2006



ANNUAL REPORTS                                                    JULY 31, 2006



The Benefits and Risks of Leveraging


The Funds utilize leveraging to seek to enhance the yield and net asset value
of their Common Stock. However, these objectives cannot be achieved in all
interest rate environments. To leverage, each 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 each Fund's Common
Stock. However, in order to benefit Common Stock shareholders, the yield curve
must be positively sloped; that is, short-term interest rates must be lower
than long-term interest rates. At the same time, a period of generally
declining interest rates will benefit Common Stock shareholders. If either of
these conditions change, then the risks of leveraging will begin to outweigh
the benefits.

To illustrate these concepts, assume a fund's Common Stock capitalization of
$100 million and the issuance of Preferred Stock for an additional $50 million,
creating a total value of $150 million available for investment in long-term
municipal bonds. If prevailing short-term interest rates are approximately 3%
and long-term interest rates are approximately 6%, the yield curve has a
strongly positive slope. The fund pays dividends on the $50 million of
Preferred Stock based on the lower short-term interest rates. At the same time,
the fund's total portfolio of $150 million earns the income based on long-term
interest rates. Of course, increases in short-term interest rates would reduce
(and even eliminate) the dividends on the Common Stock.

In this case, the dividends paid to Preferred Stock shareholders are
significantly lower than the income earned on the fund's long-term
investments, and therefore the Common Stock shareholders are the beneficiaries
of the incremental yield. However, if short-term interest rates rise,
narrowing the differential between short-term and long-term interest rates,
the incremental yield pickup on the Common Stock will be reduced or eliminated
completely. At the same time, the market value 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 of July 31, 2006, MuniHoldings Fund II, Inc. and MuniHoldings New Jersey
Insured Fund, Inc. had leveraged amounts, due to Auction Market Preferred
Stock, of 34.45% and 39.14% of total assets, respectively, before the
deduction of Preferred Stock.

As a part of its investment strategy, the Funds 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 Funds 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 Funds invest in inverse floaters, the market value of each
Fund's portfolio and the net asset value of each Fund's shares may also be
more volatile than if the Funds did not invest in these securities.



ANNUAL REPORTS                                                    JULY 31, 2006



Schedule of Investments as of July 31, 2006 (As Restated. See Note 6)

                                  MuniHoldings Fund II, Inc.     (in Thousands)


       Face
     Amount    Municipal Bonds                                            Value

Alabama--2.1%

  $   3,450    Jefferson County, Alabama, Limited Obligation
                 School Warrants, Series A, 5% due 1/01/2024          $   3,531


Arizona--5.0%

      1,000    Arizona Health Facilities Authority Revenue Bonds
                 (Catholic Healthcare West), Series A, 6.625%
                 due 7/01/2020                                            1,101
      1,365    Maricopa County, Arizona, IDA, Education Revenue
                 Bonds (Arizona Charter Schools Project 1),
                 Series A, 6.50% due 7/01/2012                            1,375
      2,560    Phoenix, Arizona, IDA, Airport Facility, Revenue
                 Refunding Bonds (America West Airlines Inc.
                 Project), AMT, 6.30% due 4/01/2023                       2,526
      1,000    Pima County, Arizona, IDA, Education Revenue Bonds
                 (Arizona Charter Schools Project), Series C, 6.75%
                 due 7/01/2031                                            1,040
      1,000    Pinal County, Arizona, COP, 5% due 12/01/2029              1,015
      1,095    Show Low, Arizona, Improvement District Number 5,
                 Special Assessment Bonds, 6.375%
                 due 1/01/2015                                            1,128


Arkansas--0.6%

      1,000    University of Arkansas, University Construction
                 Revenue Bonds (UAMS Campus), Series B, 5%
                 due 11/01/2022 (d)                                       1,040


California--19.7%

      2,000    Benicia, California, Unified School District, GO,
                 Refunding, Series A, 5.615% due 8/01/2020 (b)(m)         1,045
      5,200    California State Public Works Board, Lease Revenue
                 Bonds (Department of Corrections), Series C, 5.25%
                 due 6/01/2028                                            5,398
      1,000    East Side Union High School District, California,
                 Santa Clara County, GO (Election of 2002),
                 Series D, 5% due 8/01/2020 (i)                           1,052
        870    Golden State Tobacco Securitization Corporation of
                 California, Tobacco Settlement Revenue Bonds,
                 Series A-3, 7.875% due 6/01/2042                         1,044
      6,030    Los Angeles, California, Unified School District, GO,
                 Series A, 5% due 1/01/2028 (d)                           6,223
      1,750    Poway, California, Unified School District, Special
                 Tax (Community Facilities District Number 6 Area),
                 Series A, 6.125% due 9/01/2033                           1,859
               San Marino, California, Unified School District, GO,
                 Series A (d)(m):
      1,820         5.50% due 7/01/2017                                   1,121
      1,945         5.55% due 7/01/2018                                   1,135
      2,070         5.60% due 7/01/2019                                   1,145
      5,525    Sequoia, California, Unified High School District, GO,
                 Refunding, Series B, 5.50% due 7/01/2035 (c)             6,037



       Face
     Amount    Municipal Bonds                                            Value

California (concluded)

  $   5,000    Tracy, California, Area Public Facilities Financing
                 Agency, Special Tax Refunding Bonds (Community
                 Facilities District Number 87-1), Series H,
                 5.875% due 10/01/2019 (d)                            $   5,149
      1,250    Tustin, California, Unified School District, Senior
                 Lien Special Tax Bonds (Community Facilities
                 District Number 97-1), Series A, 5% due
                 9/01/2032 (c)                                            1,274


Colorado--1.7%

      1,845    Elk Valley, Colorado, Public Improvement Revenue
                 Bonds (Public Improvement Fee), Series A, 7.10%
                 due 9/01/2014                                            1,971
        860    Plaza Metropolitan District Number 1, Colorado, Tax
                 Allocation Revenue Bonds (Public Improvement Fees),
                 8.125% due 12/01/2025                                      862


Connecticut--0.8%

      1,715    Bridgeport, Connecticut, Senior Living Facilities
                 Revenue Bonds (3030 Park Retirement Community
                 Project), 7.25% due 4/01/2035                            1,291


Florida--7.6%

      1,640    Ballantrae, Florida, Community Development District,
                 Capital Improvement Revenue Bonds, 6%
                 due 5/01/2035                                            1,708
      1,765    Miami-Dade County, Florida, Subordinate Special
                 Obligation Revenue Bonds, Series A, 5.24%
                 due 10/01/2037 (d)(m)                                      344
      2,450    Midtown Miami, Florida, Community Development
                 District, Special Assessment Revenue Bonds,
                 Series A, 6.25% due 5/01/2037                            2,656
      2,400    Orange County, Florida, Health Facilities Authority,
                 Hospital Revenue Bonds (Orlando Regional
                 Healthcare), 6% due 12/01/2012 (h)                       2,669
      1,515    Orlando, Florida, Greater Orlando Aviation Authority,
                 Airport Facilities Revenue Bonds (JetBlue Airways
                 Corp.), AMT, 6.50% due 11/15/2036                        1,580
        525    Palm Coast Park Community Development District,
                 Florida, Special Assesment Revenue Bonds, 5.70%
                 due 5/01/2037                                              527
      1,270    Preserve at Wilderness Lake, Florida, Community
                 Development District, Capital Improvement Bonds,
                 Series A, 5.90% due 5/01/2034                            1,307
      1,700    West Villages Improvement District, Florida, Special
                 Assessment Revenue Refunding Bonds (Unit of
                 Development Number 2), 5.80% due 5/01/2036               1,742


Georgia--3.7%

      1,250    Atlanta, Georgia, Tax Allocation Bonds (Atlantic
                 Station Project), 7.90% due 12/01/2024                   1,381
      1,535    Brunswick & Glynn County, Georgia, Development
                 Authority, First Mortgage Revenue Bonds (Coastal
                 Community Retirement Corporation Project),
                 Series A, 7.25% due 1/01/2035                            1,513


Portfolio Abbreviations


To simplify the listings of portfolio holdings in the Schedules 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
EDA          Economic Development Authority
GO           General Obligation Bonds
HDA          Housing Development Authority
HFA          Housing Finance Agency
IDA          Industrial Development Authority
IDR          Industrial Development Revenue Bonds
PCR          Pollution Control Revenue Bonds
RIB          Residual Interest Bonds
S/F          Single Family
VRDN         Variable Rate Demand Notes



ANNUAL REPORTS                                                    JULY 31, 2006



Schedule of Investments (continued)

                                  MuniHoldings Fund II, Inc.     (in Thousands)


       Face
     Amount    Municipal Bonds                                            Value

Georgia (concluded)

  $   1,945    Fulton County, Georgia, Development Authority,
                 PCR (General Motors Corporation), Refunding,
                 VRDN, 8% due 4/01/2010 (j)                           $   1,945
      1,250    Milledgeville-Baldwin County, Georgia, Development
                 Authority Revenue Bonds (Georgia College and
                 State University Foundation), 5.50%
                 due 9/01/2024                                            1,300


Idaho--1.3%

      2,000    Power County, Idaho, Industrial Development
                 Corporation, Solid Waste Disposal Revenue
                 Bonds (FMC Corporation Project), AMT, 6.45%
                 due 8/01/2032                                            2,130


Illinois--2.8%

      1,000    Chicago, Illinois, O'Hare International Airport,
                 Special Facility Revenue Refunding Bonds (American
                 Airlines Inc. Project), 8.20% due 12/01/2024             1,027
      1,000    Chicago, Illinois, Special Assessment Bonds (Lake Shore
                 East), 6.75% due 12/01/2032                              1,074
      2,000    Illinois HDA, Homeowner Mortgage Revenue Bonds,
                 AMT, Sub-Series C-2, 5.25% due 8/01/2022                 2,039
        500    Illinois State Finance Authority Revenue Bonds (Landing
                 at Plymouth Place Project), Series A, 6%
                 due 5/15/2025                                              517


Louisiana--2.8%

      2,500    Louisiana Public Facilities Authority, Hospital Revenue
                 Bonds (Franciscan Missionaries of Our Lady Health
                 System, Inc.), Series A, 5.25% due 8/15/2036             2,573
        760    Louisiana State, Gas and Fuels Tax Revenue Bonds,
                 Series A, 5% due 5/01/2030 (b)                             782
      1,275    New Orleans, Louisiana, Financing Authority Revenue
                 Bonds (Xavier University of Louisiana Project), 5.30%
                 due 6/01/2026 (d)                                        1,326


Maine--2.2%

      3,455    Maine State Housing Authority, Mortgage Purchase
                 Revenue Refunding Bonds, Series B, 5.30%
                 due 11/15/2023                                           3,571


Maryland--0.6%

      1,050    Maryland State Energy Financing Administration,
                 Limited Obligation Revenue Bonds (Cogeneration-AES
                 Warrior Run), AMT, 7.40% due 9/01/2019                   1,059


Massachusetts--5.7%

               Massachusetts State Development Finance Agency
                 Revenue Bonds (Neville Communities Home),
                 Series A (f):
        600         5.75% due 6/20/2022                                     662
      1,500         6% due 6/20/2044                                      1,661
      2,100    Massachusetts State, HFA, Housing Revenue Bonds,
                 AMT, Series A, 5.25% due 12/01/2048                      2,117
      4,835    Massachusetts State School Building Authority,
                 Dedicated Sales Tax Revenue Bonds, Series A,
                 5% due 8/15/2030 (c)                                     5,009


Michigan--0.7%

      1,100    Flint, Michigan, Hospital Building Authority, Revenue
                 Refunding Bonds (Hurley Medical Center), Series A,
                 6% due 7/01/2020 (k)                                     1,179



       Face
     Amount    Municipal Bonds                                            Value

Minnesota--7.1%

  $   1,680    Minneapolis, Minnesota, Community Development
                 Agency, Supported Development Revenue
                 Refunding Bonds (Common Bond), Series G-3,
                 5.35% due 12/01/2011 (h)                             $   1,799
      4,220    Minnesota State Municipal Power Agency, Electric
                 Revenue Bonds, 5.25% due 10/01/2021                      4,449
               Rockford, Minnesota, Independent School District
                 Number 883, GO (c):
      2,870         5.60% due 2/01/2019                                   3,030
      2,390         5.60% due 2/01/2020                                   2,523


Mississippi--1.5%

               Mississippi Business Finance Corporation, Mississippi,
                 PCR, Refunding (System Energy Resources, Inc.
                 Project):
      2,000         5.875% due 4/01/2022                                  2,006
        500         5.90% due 5/01/2022                                     502


Missouri--1.9%

        950    Fenton, Missouri, Tax Increment Revenue Refunding
                 and Improvement Bonds (Gravois Bluffs), 7%
                 due 10/01/2011 (h)                                       1,094
      1,000    Kansas City, Missouri, IDA, First Mortgage Health
                 Facilities Revenue Bonds (Bishop Spencer Place),
                 Series A, 6.50% due 1/01/2035                            1,045
      1,000    Missouri State Development Finance Board,
                 Infrastructure Facilities Revenue Refunding Bonds
                 (Branson), Series A, 5.50% due 12/01/2032                1,030


New Jersey--11.3%

               New Jersey EDA, Cigarette Tax Revenue Bonds:
      4,050         5.75% due 6/15/2029                                   4,289
      1,890         5.50% due 6/15/2031                                   1,958
               New Jersey EDA, Retirement Community Revenue
                 Bonds, Series A:
      1,000         (Cedar Crest Village Inc. Facility), 7.25%
                    due 11/15/2031                                        1,081
      2,000         (Seabrook Village Inc.), 8.125%
                    due 11/15/2023                                        2,237
      2,000    New Jersey EDA, Special Facility Revenue Bonds
                 (Continental Airlines, Inc. Project), AMT, 6.625%
                 due 9/15/2012                                            2,105
      2,375    New Jersey Health Care Facilities Financing Authority
                 Revenue Bonds (South Jersey Hospital), 6%
                 due 7/01/2026                                            2,515
      2,500    New Jersey State Turnpike Authority, Turnpike Revenue
                 Bonds, Series C, 5% due 1/01/2030 (c)                    2,583
      1,725    Tobacco Settlement Financing Corporation of New
                 Jersey, Asset-Backed Revenue Bonds, 7%
                 due 6/01/2041                                            1,965


New Mexico--4.0%

      3,675    Farmington, New Mexico, PCR, Refunding (Public
                 Service Company of New Mexico--San Juan
                 Project), Series A, 5.80% due 4/01/2022                  3,708
      2,675    New Mexico Finance Authority, Senior Lien State
                 Transportation Revenue Bonds, Series A, 5.125%
                 due 6/15/2018 (d)                                        2,849


New York--11.5%

        900    Dutchess County, New York, IDA, Civic Facility
                 Revenue Refunding Bonds (Saint Francis Hospital),
                 Series A, 7.50% due 3/01/2029                              977
        415    New York City, New York, City IDA, Civic Facility
                 Revenue Bonds, Series C, 6.80% due 6/01/2028               446



ANNUAL REPORTS                                                    JULY 31, 2006



Schedule of Investments (continued)

                                  MuniHoldings Fund II, Inc.     (in Thousands)


       Face
     Amount    Municipal Bonds                                            Value

New York (concluded)

               New York City, New York, City IDA, Special Facility
                 Revenue Bonds (Continental Airlines, Inc. Project),
                 AMT:
   $    525         8% due 11/01/2012                                 $     572
        525         8.375% due 11/01/2016                                   580
      3,855    New York City, New York, Sales Tax Asset
                 Receivable Corporation Revenue Bonds,
                    Series A, 5% due 10/15/2020 (d)                       4,056
      2,725    New York State Dormitory Authority Revenue Bonds
                 (School Districts Financing Program), Series D,
                 5.25% due 10/01/2023 (d)                                 2,899
         20    Suffolk County, New York, IDA, Civic Facility Revenue
                 Bonds (Special Needs Facilities Pooled Program),
                 Series D-1, 5.50% due 7/01/2007                             20
               Tobacco Settlement Financing Corporation of New
                 York Revenue Bonds:
      1,100         Series A-1, 5.50% due 6/01/2015                       1,158
      2,400         Series A-1, 5.50% due 6/01/2018                       2,565
      2,750         Series C-1, 5.50% due 6/01/2020 (b)                   2,959
      1,100         Series C-1, 5.50% due 6/01/2022                       1,173
      1,575    Westchester County, New York, IDA, Continuing
                 Care Retirement, Mortgage Revenue Bonds
                 (Kendal on Hudson Project), Series A, 6.50%
                 due 1/01/2034                                            1,671


North Carolina--1.3%

      2,000    North Carolina Eastern Municipal Power Agency,
                 Power System Revenue Bonds, Series D, 6.75%
                 due 1/01/2026                                            2,169


Oklahoma--1.2%

        945    Oklahoma State Housing Finance Agency, S/F
                 Mortgage Revenue Bonds (Homeownership
                 Loan Program), Series D-2, AMT, 6.25%
                 due 9/01/2029 (f)(g)                                       946
      1,075    Tulsa, Oklahoma, Municipal Airport Trust Revenue
                 Refunding Bonds (AMR Corporation), AMT, Series A,
                 5.375% due 12/01/2035                                    1,075


Pennsylvania--4.0%

      2,750    Pennsylvania Economic Development Financing
                 Authority, Exempt Facilities Revenue Bonds
                 (National Gypsum Company), AMT, Series A,
                 6.25% due 11/01/2027                                     2,894
        540    Philadelphia, Pennsylvania, Authority for IDR,
                 Commercial Development, 7.75% due 12/01/2017               544
      2,630    Sayre, Pennsylvania, Health Care Facilities
                 Authority, Revenue Bonds (Guthrie Healthcare
                 System), Series B, 7.125% due 12/01/2031                 3,100


Rhode Island--1.5%

      2,190    Rhode Island State Health and Educational Building
                 Corporation, Hospital Financing Revenue Bonds
                 (Lifespan Obligation Group), 6.50%
                 due 8/15/2012 (h)                                        2,490


South Carolina--2.9%

      2,080    Medical University Hospital Authority, South Carolina,
                 Hospital Facilities Revenue Refunding Bonds,
                 Series A, 6.375% due 8/15/2012 (h)                       2,361
      2,000    South Carolina Jobs, EDA, Economic Development
                 Revenue Bonds (Westminster Presbyterian Center),
                 7.75% due 11/15/2010 (h)                                 2,339



       Face
     Amount    Municipal Bonds                                            Value

Tennessee--6.7%

  $   2,200    Hardeman County, Tennessee, Correctional Facilities
                 Corporation Revenue Bonds, Series B, 7.375%
                 due 8/01/2017                                        $   2,265
      3,450    Shelby County, Tennessee, Health, Educational
                 and Housing Facility Board, Hospital Revenue
                 Refunding Bonds (Methodist Healthcare), 6.50%
                 due 9/01/2012 (h)                                        3,941
      4,500    Tennessee Energy Acquisition Corporation, Gas
                 Revenue Bonds, Series A, 5.25% due 9/01/2026             4,881


Texas--8.0%

      2,665    Austin, Texas, Convention Center Revenue Bonds
                 (Convention Enterprises Inc.), First Tier, Series A,
                 6.70% due 1/01/2028                                      2,830
      1,000    Brazos River Authority, Texas, PCR, Refunding (TXU
                 Energy Company LLC Project), Series B, 4.75%
                 due 5/01/2029                                            1,002
      2,500    Brazos River, Texas, Harbor Navigation District,
                 Brazoria County Environmental Revenue Refunding
                 Bonds (Dow Chemical Company Project), AMT,
                 Series A-7, 6.625% due 5/15/2033                         2,795
        843    Harris County, Texas, Revenue Refunding
                 Bonds, DRIVERS, Series 1111, 6.53%
                 due 8/15/2009, (c)(e)                                      907
      1,300    Houston, Texas, Health Facilities Development
                 Corporation, Retirement Facility Revenue Bonds
                 (Buckingham Senior Living Community), Series A,
                 7.125% due 2/15/2034                                     1,434
      2,965    Matagorda County, Texas, Navigation District Number 1,
                 Revenue Refunding Bonds (Reliant Energy, Inc.),
                 Series C, 8% due 5/01/2029                               3,167
      1,100    Port Corpus Christi, Texas, Individual Development
                 Corporation, Environmental Facilities Revenue Bonds
                 (Citgo Petroleum Corporation Project), AMT, 8.25%
                 due 11/01/2031                                           1,144


Vermont--0.6%

      1,000    Vermont Educational and Health Buildings
                 Financing Agency, Revenue Bonds (Developmental
                 and Mental Health), Series A, 6.50%
                 due 6/15/2032                                            1,044


Virginia--13.4%

        575    Chesterfield County, Virginia, IDA, PCR, Refunding
                 (Virginia Electric and Power Company), Series B,
                 5.875% due 6/01/2017                                       622
        425    Chesterfield County, Virginia, IDA, PCR (Virginia
                 Electric and Power Company), Series A, 5.875%
                 due 6/01/2017                                              457
      5,000    Fairfax County, Virginia, EDA, Resource Recovery
                 Revenue Refunding Bonds, AMT, Series A, 6.10%
                 due 2/01/2011 (a)                                        5,398
               Pocahontas Parkway Association, Virginia, Toll Road
                 Revenue Bonds (h):
      3,885         Senior Series A, 5.50% due 8/15/2008                  4,088
     18,400         Senior Series B, 7.35% due 8/15/2008 (m)              4,818
      2,185    Tobacco Settlement Financing Corporation of Virginia,
                 Asset-Backed Revenue Bonds, 5.625%
                 due 6/01/2037                                            2,267
      1,095    Virginia State, HDA, Rental Housing Revenue Bonds,
                 AMT, Series B, 5.625% due 8/01/2011                      1,139
      3,200    Virginia State, HDA, Revenue Bonds, AMT, Series D,
                 6% due 4/01/2024                                         3,329



ANNUAL REPORTS                                                    JULY 31, 2006



Schedule of Investments (concluded)

                                  MuniHoldings Fund II, Inc.     (in Thousands)


       Face
     Amount    Municipal Bonds                                            Value

Washington--0.6%

  $   1,040    Seattle, Washington, Housing Authority Revenue
                 Bonds (Replacement Housing Project), 6.125%
                 due 12/01/2032                                       $   1,055


Wisconsin--0.9%

      1,360    Wisconsin State Health and Educational Facilities
                 Authority Revenue Bonds (Synergyhealth Inc.),
                 6% due 11/15/2032                                        1,459


Puerto Rico--0.9%

      1,550    Puerto Rico Industrial, Medical and Environmental
                 Pollution Control Facilities Financing Authority,
                 Special Facilities Revenue Bonds (American Airlines
                 Inc.), Series A, 6.45% due 12/01/2025                    1,551


U.S. Virgin Islands--1.8%

      2,680    Virgin Islands Government Refinery Facilities,
                 Revenue Refunding Bonds (Hovensa Coker
                 Project), AMT, 6.50% due 7/01/2021                       3,002

               Total Municipal Bonds
               (Cost--$215,711)--138.4%                                 229,117



               Municipal Bonds Held in Trust (o)

California--3.3%

      5,130    California Pollution Control Financing Authority,
                 PCR, Refunding (Pacific Gas and Electric), AMT,
                 Series A, 5.35% due 12/01/2016 (d)                       5,430


Maryland--4.9%

      7,765    Baltimore, Maryland, Convention Center Hotel
                 Revenue Bonds, Senior Series A, 5.25%
                 due 9/01/2039 (i)                                        8,187



       Face
     Amount    Municipal Bonds Held in Trust (o)                          Value

Michigan--3.2%

  $   5,000    Michigan State Strategic Fund, Limited Obligation
                 Revenue Refunding Bonds (Detroit Edison
                 Company Pollution Control Project), AMT,
                 Series C, 5.65% due 9/1/2029 (i)                     $   5,258


New York--2.1%

      3,205    New York City, New York, Sales Tax Asset
                 Receivable Corporation Revenue Bonds,
                 Series A, 5.25% due 10/15/2027 (a)                       3,408


South Carolina--5.2%

      8,400    South Carolina State Ports Authority, Ports
                 Revenue Bonds, AMT, 5.30% due 7/01/2026 (c)              8,613


Texas--4.4%

      7,045    Harris County, Texas, Toll Road Revenue
                 Refunding Bonds, Senior Lien, Series A,
                 5.25% due 8/15/2035 (c)                                  7,308

               Total Municipal Bonds Held in Trust
               (Cost--$38,367)--23.1%                                    38,204



     Shares
       Held    Short-Term Securities

         12    Merrill Lynch Institutional Tax-Exempt Fund,
                 3.45% (l)(n)                                                12

               Total Short-Term Securities
               (Cost--$12)--0.0%                                             12

Total Investments (Cost--$254,090*)--161.5%                             267,333
Other Assets Less Liabilities--2.3%                                       3,767
Liability for Trust Certificates, Including Interest
  Expense Payable--(11.2%)                                             (18,506)
Preferred Stock, at Redemption Value--(52.6%)                          (87,029)
                                                                     ----------
Net Assets Applicable to Common Stock--100.0%                        $  165,565
                                                                     ==========


  * The cost and unrealized appreciation (depreciation) of investments
    as of July 31, 2006, as computed for federal income tax purposes,
    were as follows:

    Aggregate cost                                  $       235,424
                                                    ===============
    Gross unrealized appreciation                   $        14,615
    Gross unrealized depreciation                             (976)
                                                    ---------------
    Net unrealized appreciation                     $        13,639
                                                    ===============

(a) AMBAC Insured.

(b) FGIC Insured.

(c) FSA Insured.

(d) MBIA Insured.

(e) The rate disclosed is that currently in effect. This rate changes
    periodically and inversely based upon prevailing market rates.

(f) GNMA Collateralized.

(g) FNMA Collateralized.

(h) Prerefunded.

(i) XL Capital Insured.

(j) Security may have a maturity of more than one year at time of issuance,
    but has variable rate and demand features that qualify it as a short-term
    security. The rate disclosed is that currently in effect. This rate
    changes periodically based upon prevailing market rates.

(k) ACA Insured.

(l) Investments in companies considered to be an affiliate of the Fund,
    for purposes of Section 2(a)(3) of the Investment Company Act of 1940,
    were as follows:


                                                      Net          Dividend
    Affiliate                                       Activity        Income

    Merrill Lynch Institutional Tax-Exempt Fund        --            --*

       * Amount is less than $1,000.


(m) Represents a zero coupon bond; the interest rate shown reflects the
    effective yield at the time of purchase.

(n) Represents the current yield as of July 31, 2006.

(o) As Restated. See Note 6. Securities represent underlying bonds
    transferred to a separate securitization trust established in a
    tender option bond transaction in which the Fund may have acquired
    the residual interest certificates. These securities serve as
    collateral in a financing transaction. See Note 1(c) to Financial
    Statements for details of Municipal Bonds Held in Trust.

    See Notes to Financial Statements.



ANNUAL REPORTS                                                    JULY 31, 2006



Schedule of Investments as of July 31, 2006
                        (As Restated. See Note 6)

                  MuniHoldings New Jersey Insured Fund, Inc.     (in Thousands)


       Face
     Amount    Municipal Bonds                                            Value

New Jersey--147.2%

   $  1,875    Atlantic Highlands, New Jersey, Highland Regional
                 Sewer Authority, Sewer Revenue Refunding Bonds,
                 5.50% due 1/01/2020 (b)                             $    2,004

               Camden County, New Jersey, Improvement Authority,
                 Lease Revenue Bonds (c)(e):
      2,635         5.375% due 9/01/2010                                  2,792
      1,540         5.50% due 9/01/2010                                   1,639

        430    Carteret, New Jersey, Board of Education, COP, 6%
                 due 1/15/2010 (d)(e)                                       464

      2,500    Delaware River and Bay Authority Revenue Bonds,
                 New Jersey, 5% due 1/01/2033 (d)                         2,566

      4,630    Delaware River Joint Toll Bridge Commission of New
                 Jersey and Pennsylvania, Bridge Revenue Refunding
                 Bonds, 5% due 7/01/2028                                  4,730

               Delaware River Port Authority of New Jersey and
                 Pennsylvania Revenue Bonds (c):
      5,000         5.50% due 1/01/2012                                   5,257
      6,000         5.625% due 1/01/2013                                  6,338
        500         5.75% due 1/01/2015                                     530
      4,865         6% due 1/01/2018                                      5,182
      5,525         6% due 1/01/2019                                      5,885
      2,425         (Port District Project), Series B, 5.625%
                    due 1/01/2026                                         2,545

      7,895    East Orange, New Jersey, Board of Education, COP,
                 5.50% due 8/01/2012 (c)                                  8,546

      1,000    East Orange, New Jersey, Water Utility, GO, Refunding,
                 5.70% due 6/15/2008 (a)(e)                               1,045

      4,000    Essex County, New Jersey, Improvement Authority,
                 Lease Revenue Bonds (Correctional Facility Project),
                 6% due 10/01/2010 (b)(e)                                 4,338

      3,300    Essex County, New Jersey, Improvement Authority,
                 Lease Revenue Refunding Bonds (County Jail and
                 Youth House Project), 5.35% due 12/01/2024 (a)           3,380

      4,400    Essex County, New Jersey, Improvement Authority
                 Revenue Bonds, Series A, 5% due 10/01/2028 (b)           4,528

      2,705    Essex County, New Jersey, Improvement Authority,
                 Utility System Revenue Bonds (East Orange Franchise),
                 6% due 7/01/2008 (d)(e)                                  2,843

               Garden State Preservation Trust of New Jersey,
                 Capital Appreciation Revenue Bonds, Series B (c)(k):
      9,000         5.12% due 11/01/2023                                  4,018
     10,000         5.20% due 11/01/2025                                  4,028

               Garden State Preservation Trust of New Jersey, Open
                 Space and Farmland Preservation Revenue Bonds,
                 Series A (c):
      1,960         5.80% due 11/01/2021                                  2,212
      2,730         5.80% due 11/01/2023                                  3,084
      9,160         5.75% due 11/01/2028                                 10,773

               Garden State Preservation Trust of New Jersey, Open
                 Space and Farmland Preservation, Revenue
                 Refunding Bonds, Series C (c):
      5,000         5.25% due 11/01/2020                                  5,519
      7,705         5.25% due 11/01/2021                                  8,517

      2,230    Jersey City, New Jersey, GO, Series B, 5.25%
                 due 9/01/2023 (c)                                        2,372



       Face
     Amount    Municipal Bonds                                            Value

New Jersey (continued)

   $  5,250    Lafayette Yard, New Jersey, Community Development
                 Revenue Bonds (Hotel/Conference Center
                 Project-Trenton), 6% due 4/01/2010 (d)(e)           $    5,689

      1,550    Middlesex County, New Jersey, COP, 5.25%
                 due 6/15/2023 (d)                                        1,608

      1,375    Middlesex County, New Jersey, COP, Refunding,
                 5.50% due 8/01/2016 (d)                                  1,473

      5,270    Middlesex County, New Jersey, Improvement Authority,
                 Lease Revenue Bonds (Educational Services
                 Commission Projects), 6% due 7/15/2010 (e)               5,739

        500    Middlesex County, New Jersey, Improvement
                 Authority Revenue Bonds (Senior Citizens Housing
                 Project), AMT, 5.50% due 9/01/2030 (a)                     518

               Monmouth County, New Jersey, Improvement
                 Authority Revenue Refunding Bonds (a):
      1,540         5.35% due 12/01/2017                                  1,622
      1,470         5.375% due 12/01/2018                                 1,550

               New Jersey EDA, Cigarette Tax Revenue Bonds:
      2,700         5.625% due 6/15/2019                                  2,819
      2,000         5.75% due 6/15/2029                                   2,118
        585         5.50% due 6/15/2031                                     606
      1,180         5.75% due 6/15/2034                                   1,242

      5,000    New Jersey EDA, Lease Revenue Bonds (University
                 of Medicine and Dentistry--International Center
                 for Public Health Project), 6% due 6/01/2032 (a)         5,352

               New Jersey EDA, Motor Vehicle Surcharge Revenue
                 Bonds, Series A (d):
      7,500         5.25% due 7/01/2026                                   8,308
     11,105         5.25% due 7/01/2033                                  11,707
      4,485         5% due 7/01/2034                                      4,616

      1,000    New Jersey EDA, Parking Facility Revenue Bonds
                 (Elizabeth Development Company Project),
                 5.60% due 10/15/2026 (b)                                 1,038

          3    New Jersey EDA, Revenue Bonds, DRIVERS, Series 219,
                 8.021% due 5/01/2016 (c)(j)                                  3

               New Jersey EDA, School Facilities Construction
                 Revenue Bonds:
      9,000         Series L, 5% due 3/01/2030 (c)                        9,278
      8,420         Series O, 5.25% due 3/01/2023                         8,914

      2,500    New Jersey EDA, Solid Waste Disposal Facilities
                 Revenue Bonds (Waste Management, Inc.), AMT,
                 Series A, 5.30% due 6/01/2015                            2,608

               New Jersey EDA, State Lease Revenue Bonds:
      2,670         (Liberty State Park Project), Series C, 5%
                    due 3/01/2022 (c)                                     2,787
      1,400         (Liberty State Park Project), Series C, 5%
                    due 3/01/2023 (c)                                     1,458
      3,000         (State Office Buildings Projects), 6%
                    due 6/15/2010 (a)(e)                                  3,237
      4,620         (State Office Buildings Projects), 6.25%
                    due 6/15/2010 (a)(e)                                  5,026

     10,775    New Jersey Health Care Facilities Financing Authority,
                 Department of Human Services Revenue Bonds
                 (Greystone Park Psychiatric Hospital Project), 5%
                 due 9/15/2023 (a)                                       11,223



ANNUAL REPORTS                                                    JULY 31, 2006



Schedule of Investments (continued)

                  MuniHoldings New Jersey Insured Fund, Inc.     (in Thousands)


       Face
     Amount    Municipal Bonds                                            Value

New Jersey (continued)

               New Jersey Health Care Facilities Financing Authority
                 Revenue Bonds:
   $  2,315         (RWJ Healthcare Corporation), Series B, 5%
                    due 7/01/2025 (i)                                $    2,370
      3,015         (RWJ Healthcare Corporation), Series B, 5%
                    due 7/01/2035 (i)                                     3,065
      2,820         (Society of the Valley Hospital), 5.375%
                    due 7/01/2025 (a)                                     2,938
      2,135         (Somerset Medical Center), 5.50%
                    due 7/01/2033                                         2,178
      5,440         (South Jersey Hospital), 6% due 7/01/2026             5,761

               New Jersey Health Care Facilities Financing Authority,
                 Revenue Refunding Bonds:
      4,000         (AHS Hospital Corporation), Series A, 6%
                    due 7/01/2013 (a)                                     4,451
      1,455         (Atlantic City Medical Center), 6.25%
                    due 7/01/2017                                         1,604
      3,500         (Atlantic City Medical Center), 5.75%
                    due 7/01/2025                                         3,704
      1,775         (Holy Name Hospital), 6% due 7/01/2025                1,827
      1,000         (Meridian Health System Obligation Group),
                    5.375% due 7/01/2024 (c)                              1,042

               New Jersey Sports and Exposition Authority,
                 Luxury Tax Revenue Refunding Bonds
                 (Convention Center) (d):
      5,890         5.50% due 3/01/2021                                   6,622
      3,000         5.50% due 3/01/2022                                   3,380

      2,400    New Jersey Sports and Exposition Authority,
                 State Contract Revenue Bonds, Series A, 6%
                 due 3/01/2013 (d)                                        2,570

      7,500    New Jersey State Educational Facilities Authority,
                 Higher Education, Capital Improvement Revenue
                 Bonds, Series A, 5.125% due 9/01/2022 (a)                7,889

               New Jersey State Educational Facilities Authority
                 Revenue Bonds:
      9,420         (Capital Improvement Fund), Series A, 5.75%
                    due 9/01/2010 (c)(e)                                 10,112
      1,200         (Montclair State University), Series A, 5%
                    due 7/01/2021 (a)                                     1,264
      2,880         (Montclair State University), Series A, 5%
                    due 7/01/2022 (a)                                     3,027
      3,615         (Rowan University), Series C, 5.125%
                    due 7/01/2028 (d)                                     3,769
      3,260         (Rowan University), Series C, 5%
                    due 7/01/2034 (d)                                     3,360

               New Jersey State Educational Facilities Authority,
                 Revenue Refunding Bonds:
      7,510         (Montclair State University), Series L, 5%
                    due 7/01/2034 (d)                                     7,740
      2,375         (Rowan University), Series C, 5.25%
                    due 7/01/2017 (b)                                     2,520
      2,820         (Rowan University), Series C, 5.25%
                    due 7/01/2018 (b)                                     2,992
      2,635         (Rowan University), Series C, 5.25%
                    due 7/01/2019 (b)                                     2,796
      1,410         (Rowan University), Series C, 5%
                    due 7/01/2031 (b)                                     1,445

     11,225    New Jersey State Housing and Mortgage Finance
                 Agency, Capital Fund Program Revenue Bonds,
                 Series A, 4.70% due 11/01/2025 (c)                      11,304



       Face
     Amount    Municipal Bonds                                            Value

New Jersey (continued)

               New Jersey State Housing and Mortgage Finance
                 Agency, Home Buyer Revenue Bonds, AMT,
                 Series U (d):
   $  1,000         5.60% due 10/01/2012                             $    1,025
      2,820         5.65% due 10/01/2013                                  2,890
      3,000         5.75% due 4/01/2018                                   3,076
        805         5.85% due 4/01/2029                                     824

      5,000    New Jersey State Transit Corporation, COP (Federal
                 Transit Administration Grants), Series A, 6.125%
                 due 9/15/2009 (a)(e)                                     5,339

               New Jersey State Transportation Trust Fund Authority,
                 Transportation System Revenue Bonds:
      7,500         Series A, 6% due 6/15/2010 (e)                        8,091
      1,400         Series C, 5.05% due 12/15/2035 (a)(k)                   340
      5,500         Series C, 5.05% due 12/15/2036 (a)(k)                 1,272
      6,200         Series D, 5% due 6/15/2015 (c)(e)                     6,659
      7,800         Series D, 5% due 6/15/2019 (c)                        8,181

               New Jersey State Transportation Trust Fund Authority,
                 Transportation System Revenue Refunding Bonds:
     10,750         Series A, 5.25% due 12/15/2020 (c)                   11,812
      9,165         Series B, 5.50% due 12/15/2021 (d)                   10,337

      7,615    New Jersey State Turnpike Authority, Turnpike
                 Revenue Bonds, Series B, 5.15%
                 due 1/01/2035 (a)(k)                                     5,101

               New Jersey State Turnpike Authority, Turnpike
                 Revenue Refunding Bonds:
        910         Series C, 6.50% due 1/01/2016 (d)                     1,049
      4,610         Series C, 6.50% due 1/01/2016 (d)(g)                  5,327
      4,665         Series C-1, 4.50% due 1/01/2031 (a)                   4,550

               North Bergen Township, New Jersey, Board of
                 Education, COP (c):
      1,000         6% due 12/15/2010 (e)                                 1,097
      3,260         6.25% due 12/15/2010 (e)                              3,608
      1,250         5% due 12/15/2018                                     1,293

      4,335    North Hudson Sewage Authority, New Jersey,
                 Sewer Revenue Refunding Bonds, 5.125%
                 due 8/01/2020 (d)                                        4,718

      3,035    Orange Township, New Jersey, Municipal Utility
                 and Lease, GO, Refunding, Series C, 5.10%
                 due 12/01/2017 (d)                                       3,135

               Paterson, New Jersey, Public School District,
                 COP (d):
      1,980         6.125% due 11/01/2015                                 2,131
      2,000         6.25% due 11/01/2019                                  2,162

      4,750    Port Authority of New Jersey and New York,
                 Consolidated Revenue Refunding Bonds, AMT,
                 119th Series, 5.50% due 9/15/2019 (b)                    4,806

               Port Authority of New Jersey and New York,
                 Special Obligation Revenue Bonds (JFK
                 International Air Terminal LLC), AMT (d):
        650         RIB, Series 157, 7.52% due 12/01/2022 (j)               704
     13,500         Series 6, 6.25% due 12/01/2011                       14,852
      1,500         Series 6, 6.25% due 12/01/2015                        1,718
      4,750         Series 6, 5.75% due 12/01/2025                        4,860

      9,600    Rahway Valley Sewerage Authority, New Jersey,
                 Sewer Revenue Bonds (Capital Appreciation),
                 Series A, 4.79% due 9/01/2028 (d)(k)                     3,310



ANNUAL REPORTS                                                    JULY 31, 2006



Schedule of Investments (concluded)

                  MuniHoldings New Jersey Insured Fund, Inc.     (in Thousands)


       Face
     Amount    Municipal Bonds                                            Value

New Jersey (concluded)

               South Jersey Port Corporation of New Jersey,
                 Revenue Refunding Bonds:
   $  3,750         4.50% due 1/01/2015                              $    3,823
      1,920         4.50% due 1/01/2016                                   1,945
      1,500         5% due 1/01/2026                                      1,531
      2,000         5.10% due 1/01/2033                                   2,046

      4,755    Tobacco Settlement Financing Corporation of
                 New Jersey, Asset-Backed Revenue Bonds, 7%
                 due 6/01/2041                                            5,417

      2,000    University of Medicine and Dentistry of New Jersey,
                 COP, 5% due 6/15/2029 (d)                                2,054

      4,740    University of Medicine and Dentistry of New Jersey,
                 Revenue Bonds, Series A, 5.50% due 12/01/2027 (a)        5,077

      8,580    West Deptford Township, New Jersey, GO, 5.625%
                 due 9/01/2010 (b)(e)                                     9,170

      3,615    West Orange, New Jersey, Board of Education, COP,
                 6% due 10/01/2009 (d)(e)                                 3,884


Puerto Rico--7.7%

               Puerto Rico Commonwealth Highway and Transportation
                 Authority, Transportation Revenue Refunding Bonds:
      4,500         Series J, 5% due 7/01/2029 (d)                        4,657
      3,480         Series K, 5% due 7/01/2040                            3,487

               Puerto Rico Electric Power Authority, Power
                 Revenue Bonds:
      6,830         Series HH, 5.25% due 7/01/2029 (c)                    7,158
      5,100         Series RR, 5% due 7/01/2028 (f)                       5,282

               Puerto Rico Industrial, Tourist, Educational, Medical and
                 Environmental Control Facilities Revenue Bonds, Series A:
      1,780         (Hospital Auxilio Mutuo Obligation Group),
                    6.25% due 7/01/2024 (d)                               1,794
      1,750         (Hospital de la Concepcion), 6.50% due 11/15/2020     1,930

               Total Municipal Bonds
               (Cost--$470,867)--154.9%                                 488,926



       Face
     Amount    Municipal Bonds Held in Trust (m)                          Value

New Jersey--15.3%

  $  25,230    New Jersey EDA, Natural Gas Facilities
                 Revenue Refunding Bonds (NUI
                 Corporation Projects), AMT, Series A,
                 5.70% due 6/01/2032 (d)                             $   25,979

      9,155    New Jersey EDA, Revenue Bonds
                 (Transportation Project), Sub-Lease,
                 Series A, 6% due 5/01/2009 (c)(e)                        9,682

      3,030    Port Authority of New York and New Jersey,
                 Special Obligation Revenue Bonds (JFK
                 International Air Terminal), AMT, Series 6,
                 5.75% due 12/01/2022 (d)                                 3,158

      8,650    Trenton, New Jersey, Parking Authority,
                 Parking Revenue Bonds, 6.10%
                 due 4/01/2010 (b)(e)                                     9,328

               Total Municipal Bonds Held in Trust
               (Cost--$46,716)--15.3%                                    48,147


     Shares
       Held    Short-Term Securities

      1,050    CMA New Jersey Municipal Money Fund,
                 3.03% (h)(l)                                             1,050

               Total Short-Term Securities
               (Cost--$1,050)--0.3%                                       1,050

Total Investments (Cost--$518,633*)--170.5%                             538,123
Other Assets Less Liabilities--1.2%                                       3,826
Liability for Trust Certificates, Including Interest
  Expense Payable--(7.4%)                                              (23,214)
Preferred Stock, at Redemption Value--(64.3%)                         (203,086)
                                                                     ----------
Net Assets Applicable to Common Stock--100.0%                        $  315,649
                                                                     ==========


  * The cost and unrealized appreciation (depreciation) of investments,
    as of July 31, 2006, as computed for federal income tax purposes,
    were as follows:

    Aggregate cost                                  $       496,593
                                                    ===============
    Gross unrealized appreciation                   $        19,170
    Gross unrealized depreciation                             (673)
                                                    ---------------
    Net unrealized appreciation                     $        18,497
                                                    ===============

(a) AMBAC Insured.

(b) FGIC Insured.

(c) FSA Insured.

(d) MBIA Insured.

(e) Prerefunded.

(f) CIFG Insured.

(g) Escrowed to maturity.

(h) Investments in companies considered to be an affiliate of the Fund,
    for purposes of Section 2(a)(3) of the Investment Company Act of 1940,
    were as follows:


                                                    Net          Dividend
    Affiliate                                     Activity        Income

    CMA New Jersey Municipal Money Fund           (5,082)        $   100


(i) Radian Insured.

(j) The rate disclosed is that currently in effect. This rate changes
    periodically and inversely based upon prevailing market rates.

(k) Represents a zero coupon bond; the interest rate shown reflects the
    effective yield at the time of purchase.

(l) Represents the current yield as of July 31, 2006.

(m) As Restated. See Note 6. Securities represent underlying bonds
    transferred to a separate securitization trust established in a
    tender option bond transaction in which the Fund may have acquired
    the residual interest certificates. These securities serve as
    collateral in a financing transaction. See Note 1(c) to Financial
    Statements for details of Municipal Bonds Held in Trust.

    See Notes to Financial Statements.



ANNUAL REPORTS                                                    JULY 31, 2006



Statements of Net Assets (As Restated. See Note 6)


                                                                                                                   MuniHoldings
                                                                                                                    New Jersey
                                                                                                 MuniHoldings        Insured
As of July 31, 2006                                                                             Fund II, Inc.       Fund, Inc.
                                                                                                         
Assets

       Investments in unaffiliated securities, at value*                                       $   267,321,334    $   537,072,154
       Investments in affiliated securities, at value**                                                 11,739          1,050,414
       Cash                                                                                             75,137             17,202
       Interest receivable                                                                           3,921,556          5,441,290
       Receivable for securities sold                                                                       --          3,338,279
       Prepaid expenses                                                                                  6,086             18,000
                                                                                               ---------------    ---------------
       Total assets                                                                                271,335,852        546,937,339
                                                                                               ---------------    ---------------

Liabilities

       Trust certificates                                                                           18,270,000         23,032,500
       Payable for securities purchased                                                                     --          4,679,763
       Interest expense payable                                                                        236,071            181,560
       Payable to investment adviser                                                                   109,889            209,008
       Payable for other affiliates                                                                      1,684              3,492
       Payable for dividends to shareholders                                                            63,643                 --
       Accrued expenses                                                                                 60,186             95,661
                                                                                               ---------------    ---------------
       Total liabilities                                                                            18,741,473         28,201,984
                                                                                               ---------------    ---------------

Preferred Stock

       Preferred Stock, at redemption value, par value $.10 per share***
       of AMPS+++ at $25,000 per share liquidation preference                                       87,029,202        203,086,423
                                                                                               ---------------    ---------------

Net Assets Applicable to Common Stock

       Net assets applicable to Common Stock                                                   $   165,565,177    $   315,648,932
                                                                                               ===============    ===============

Net Assets Consist of

       Undistributed investment income--net                                                    $     1,625,541    $     2,249,751
       Accumulated realized capital losses--net                                                   (15,643,905)       (26,492,002)
       Unrealized appreciation--net                                                                 13,243,166         19,489,326
                                                                                               ---------------    ---------------
       Total accumulated losses--net                                                                 (775,198)        (4,752,925)
                                                                                               ---------------    ---------------
       Common Stock, par value $.10 per share++                                                      1,116,863          2,117,274
       Paid-in capital in excess of par                                                            165,223,512        318,284,583
                                                                                               ---------------    ---------------
       Net Assets                                                                              $   165,565,177    $   315,648,932
                                                                                               ===============    ===============
       Net asset value per share of Common Stock                                               $         14.82    $         14.91
                                                                                               ===============    ===============
       Market price                                                                            $         14.12    $         14.98
                                                                                               ===============    ===============
             * Identified cost on unaffiliated securities                                      $   254,078,168    $   517,582,828
                                                                                               ===============    ===============
            ** Identified cost on affiliated securities                                        $        11,739    $     1,050,414
                                                                                               ===============    ===============
           *** Preferred Shares authorized, issued and outstanding:
                 Series A Shares                                                                         1,740              1,360
                                                                                               ===============    ===============
                 Series B Shares                                                                         1,740              1,360
                                                                                               ===============    ===============
                 Series C Shares                                                                            --              2,400
                                                                                               ===============    ===============
                 Series D Shares                                                                            --              1,880
                                                                                               ===============    ===============
                 Series E Shares                                                                            --              1,120
                                                                                               ===============    ===============
            ++ Common Shares issued and outstanding                                                 11,168,632         21,172,744
                                                                                               ===============    ===============
           +++ Auction Market Preferred Stock.

           See Notes to Financial Statements.



ANNUAL REPORTS                                                    JULY 31, 2006



Statements of Operations (As Restated. See Note 6)


                                                                                                                   MuniHoldings
                                                                                                                    New Jersey
                                                                                                 MuniHoldings        Insured
For the Year Ended July 31, 2006                                                                Fund II, Inc.       Fund, Inc.
                                                                                                         
Investment Income

       Interest                                                                                $    14,037,357    $    26,112,615
       Dividends from affiliates                                                                           341             99,983
                                                                                               ---------------    ---------------
       Total income                                                                                 14,037,698         26,212,598
                                                                                               ---------------    ---------------

Expenses

       Investment advisory fees                                                                      1,388,674          2,877,148
       Interest expense and fees                                                                       436,673            782,357
       Commission fees                                                                                 222,790            516,372
       Accounting services                                                                             102,922            173,812
       Professional fees                                                                                55,457             56,512
       Transfer agent fees                                                                              46,395             82,387
       Printing and shareholder reports                                                                 17,106             35,402
       Directors' fees and expenses                                                                     32,773             32,773
       Listing fees                                                                                     16,671             16,572
       Custodian fees                                                                                   16,286             28,030
       Pricing fees                                                                                     18,194             19,552
       Other (including $21,248 recovery of filing fees for MuniHoldings
       New Jersey Insured Fund, Inc.)                                                                   35,962             24,411
                                                                                               ---------------    ---------------
       Total expenses before waiver and/or reimbursement                                             2,389,903          4,645,328
       Waiver and/or reimbursement of expenses                                                            (22)          (187,809)
                                                                                               ---------------    ---------------
       Total expenses after waiver and/or reimbursement                                              2,389,881          4,457,519
                                                                                               ---------------    ---------------
       Investment income--net                                                                       11,647,817         21,755,079
                                                                                               ---------------    ---------------

Realized & Unrealized Gain (Loss)--Net

       Realized gain on:
           Investments--net                                                                          1,242,209          3,062,663
           Financial futures contracts and forward interest rate swaps--net                                 --             36,892
                                                                                               ---------------    ---------------
       Total realized gain--net                                                                      1,242,209          3,099,555
                                                                                               ---------------    ---------------
       Change in unrealized appreciation on:
           Investments--net                                                                        (2,518,967)       (15,803,646)
           Financial futures contracts and forward interest rate swaps--net                                 --          (240,015)
                                                                                               ---------------    ---------------
       Total change in unrealized appreciation                                                     (2,518,967)       (16,043,661)
                                                                                               ---------------    ---------------
       Total realized and unrealized loss--net                                                     (1,276,758)       (12,944,106)
                                                                                               ---------------    ---------------

Dividends to Preferred Shareholders

       Investment income--net                                                                      (2,570,803)        (5,509,362)
                                                                                               ---------------    ---------------
       Net Increase in Net Assets Resulting from Operations                                    $     7,800,256    $     3,301,611
                                                                                               ===============    ===============

       See Notes to Financial Statements.



ANNUAL REPORTS                                                    JULY 31, 2006



Statements of Changes in Net Assets (As Restated. See Note 6)                                          MuniHoldings Fund II, Inc.


                                                                                                       For the Year Ended
                                                                                                            July 31,
Increase (Decrease) in Net Assets:                                                                     2006           2005
                                                                                                         
Operations

       Investment income--net                                                                  $    11,647,817    $    12,054,853
       Realized gain--net                                                                            1,242,209          2,032,584
       Change in unrealized appreciation--net                                                      (2,518,967)         10,869,137
       Dividends to Preferred Stock shareholders                                                   (2,570,803)        (1,593,265)
                                                                                               ---------------    ---------------
       Net increase in net assets resulting from operations                                          7,800,256         23,363,309
                                                                                               ---------------    ---------------

Dividends to Common Stock Shareholders

       Investment income--net                                                                     (10,146,661)       (11,625,476)
                                                                                               ---------------    ---------------
       Net decrease in net assets resulting from dividends to Common Stock shareholders           (10,146,661)       (11,625,476)
                                                                                               ---------------    ---------------

Common Stock Transactions

       Value of shares issued to Common Stock shareholders in reinvestment of dividends                323,132            267,353
                                                                                               ---------------    ---------------

Net Assets Applicable to Common Stock

       Total increase (decrease) in net assets applicable to Common Stock                          (2,023,273)         12,005,186
       Beginning of year                                                                           167,588,450        155,583,264
                                                                                               ---------------    ---------------
       End of year*                                                                            $   165,565,177    $   167,588,450
                                                                                               ===============    ===============
           * Undistributed investment income--net                                              $     1,625,541    $     2,695,188
                                                                                               ===============    ===============

             See Notes to Financial Statements.





Statements of Changes in Net Assets (As Restated for 2006. See Note 6)                 MuniHoldings New Jersey Insured Fund, Inc.


                                                                                                       For the Year Ended
                                                                                                            July 31,
Increase (Decrease) in Net Assets:                                                                     2006           2005
                                                                                                         
Operations

       Investment income--net                                                                  $    21,755,079    $    21,866,673
       Realized gain--net                                                                            3,099,555          9,254,655
       Change in unrealized appreciation--net                                                     (16,043,661)          4,642,719
       Dividends to Preferred Stock shareholders                                                   (5,509,362)        (3,321,072)
                                                                                               ---------------    ---------------
       Net increase in net assets resulting from operations                                          3,301,611         32,442,975
                                                                                               ---------------    ---------------

Dividends to Common Stock Shareholders

       Investment income--net                                                                     (18,365,764)       (19,944,606)
                                                                                               ---------------    ---------------
       Net decrease in net assets resulting from dividends to Common Stock shareholders           (18,365,764)       (19,944,606)
                                                                                               ---------------    ---------------

Common Stock Transactions

       Value of shares issued to Common Stock shareholders in reinvestment of dividends              1,860,277            183,190
                                                                                               ---------------    ---------------

Net Assets Applicable to Common Stock

       Total increase (decrease) in net assets applicable to Common Stock                         (13,203,876)         12,681,559
       Beginning of year                                                                           328,852,808        316,171,249
                                                                                               ---------------    ---------------
       End of year*                                                                            $   315,648,932    $   328,852,808
                                                                                               ===============    ===============
           * Undistributed investment income--net                                              $     2,249,751    $     4,369,798
                                                                                               ===============    ===============

             See Notes to Financial Statements.



ANNUAL REPORTS                                                    JULY 31, 2006



Financial Highlights (As Restated. See Note 6)                                                         MuniHoldings Fund II, Inc.


The following per share data and ratios have been derived                          For the Year Ended July 31,
from information provided in the financial statements.             2006           2005         2004         2003           2002
                                                                                                    
Per Share Operating Performance

       Net asset value, beginning of year                     $     15.03   $     13.98   $     13.46   $     13.51   $     13.42
                                                              -----------   -----------   -----------   -----------   -----------
       Investment income--net                                      1.04++        1.08++        1.15++        1.16++          1.10
       Realized and unrealized gain (loss)--net                     (.11)          1.15           .50         (.15)         (.04)
       Less dividends to Preferred Stock shareholders
       from investment income--net                                  (.23)         (.14)         (.10)         (.10)         (.13)
                                                              -----------   -----------   -----------   -----------   -----------
       Total from investment operations                               .70          2.09          1.55           .91           .93
                                                              -----------   -----------   -----------   -----------   -----------
       Less dividends to Common Stock shareholders
       from investment income--net                                  (.91)        (1.04)        (1.03)         (.96)         (.84)
                                                              -----------   -----------   -----------   -----------   -----------
       Net asset value, end of year                           $     14.82   $     15.03   $     13.98   $     13.46   $     13.51
                                                              ===========   ===========   ===========   ===========   ===========
       Market price per share, end of year                    $     14.12   $     15.25   $     13.53   $     13.16   $     12.96
                                                              ===========   ===========   ===========   ===========   ===========

Total Investment Return**

       Based on net asset value per share                           4.89%        15.46%        11.88%         7.15%         7.56%
                                                              ===========   ===========   ===========   ===========   ===========
       Based on market price per share                            (1.50%)        21.04%        10.75%         9.21%        12.12%
                                                              ===========   ===========   ===========   ===========   ===========

Ratios Based on Average Net Assets Applicable to Common Stock

       Total expenses, net of reimbursement and excluding
       interest expense and fees*                                   1.18%         1.19%         1.21%         1.26%         1.29%
                                                              ===========   ===========   ===========   ===========   ===========
       Total expenses, net of reimbursement*                        1.44%         1.27%         1.30%         1.38%         1.48%
                                                              ===========   ===========   ===========   ===========   ===========
       Total expenses*                                              1.44%         1.27%         1.31%         1.38%         1.48%
                                                              ===========   ===========   ===========   ===========   ===========
       Total investment income--net*                                7.04%         7.38%         8.13%         8.48%         8.27%
                                                              ===========   ===========   ===========   ===========   ===========
       Amount of dividends to Preferred Stock shareholders          1.55%          .98%          .69%          .74%          .95%
                                                              ===========   ===========   ===========   ===========   ===========
       Investment income--net, to Common Stock
       shareholders                                                 5.49%         6.40%         7.44%         7.74%         7.32%
                                                              ===========   ===========   ===========   ===========   ===========

Ratios Based on Average Net Assets Applicable to Preferred Stock

       Dividends to Preferred Stock shareholders                    2.95%         1.84%         1.23%         1.28%         1.60%
                                                              ===========   ===========   ===========   ===========   ===========

Supplemental Data

       Net assets applicable to Common Stock, end of
       year (in thousands)                                    $   165,565   $   167,588   $   155,583   $   149,262   $   149,633
                                                              ===========   ===========   ===========   ===========   ===========
       Preferred Stock outstanding at liquidation
       preference, end of year (in thousands)                 $    87,000   $    87,000   $    87,000   $    87,000   $    87,000
                                                              ===========   ===========   ===========   ===========   ===========
       Portfolio turnover                                             41%           38%           29%           42%           43%
                                                              ===========   ===========   ===========   ===========   ===========

Leverage

       Asset coverage per $1,000                              $     2,903   $     2,926   $     2,788   $     2,716  $      2,720
                                                              ===========   ===========   ===========   ===========   ===========

Dividends Per Share on Preferred Stock Outstanding

       Series A--Investment income--net                       $       754   $       445   $       223   $       279   $       409
                                                              ===========   ===========   ===========   ===========   ===========
       Series B--Investment income--net                       $       724   $       471   $       395   $       363   $       394
                                                              ===========   ===========   ===========   ===========   ===========

         * Do not reflect the effect of dividends to Preferred Stock shareholders.

        ** 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.

        ++ Based on average shares outstanding.

           See Notes to Financial Statements.



ANNUAL REPORTS                                                    JULY 31, 2006



Financial Highlights (As Restated. See Note 6)                                         MuniHoldings New Jersey Insured Fund, Inc.


The following per share data and ratios have been derived                          For the Year Ended July 31,
from information provided in the financial statements.             2006           2005         2004         2003           2002
                                                                                                    
Per Share Operating Performance

       Net asset value, beginning of year                     $     15.62   $     15.03   $     14.46   $     14.90   $     14.54
                                                              -----------   -----------   -----------   -----------   -----------
       Investment income--net*                                       1.03          1.04          1.07          1.08          1.06
       Realized and unrealized gain (loss)--net                     (.61)           .66           .51         (.54)           .31
       Less dividends to Preferred Stock shareholders
       from investment income--net                                  (.26)         (.16)         (.08)         (.09)         (.15)
                                                              -----------   -----------   -----------   -----------   -----------
       Total from investment operations                               .16          1.54          1.50           .45          1.22
                                                              -----------   -----------   -----------   -----------   -----------
       Less dividends to Common Stock shareholders
       from investment income--net                                  (.87)         (.95)         (.93)         (.89)         (.86)
                                                              -----------   -----------   -----------   -----------   -----------
       Net asset value, end of year                           $     14.91   $     15.62   $     15.03   $     14.46   $     14.90
                                                              ===========   ===========   ===========   ===========   ===========
       Market price per share, end of year                    $     14.98   $     15.89   $     14.17   $     13.59   $     14.24
                                                              ===========   ===========   ===========   ===========   ===========

Total Investment Return***

       Based on net asset value per share                           1.09%        10.63%        10.90%         3.32%         9.16%
                                                              ===========   ===========   ===========   ===========   ===========
       Based on market price per share                             (.16%)        19.37%        11.24%         1.61%        20.01%
                                                              ===========   ===========   ===========   ===========   ===========

Ratios Based on Average Net Assets Applicable to Common Stock

       Total expenses, net of waiver and reimbursement
       and excluding reorganization expenses and
       interest expense and fees**                                  1.15%         1.14%         1.13%         1.15%         1.19%
                                                              ===========   ===========   ===========   ===========   ===========
       Total expenses, net of waiver and reimbursement
       and excluding reorganization expenses**                      1.39%         1.25%         1.19%         1.23%         1.33%
                                                              ===========   ===========   ===========   ===========   ===========
       Total expenses, net of waiver and reimbursement**            1.39%         1.25%         1.19%         1.23%         1.35%
                                                              ===========   ===========   ===========   ===========   ===========
       Total expenses**                                             1.45%         1.31%         1.27%         1.31%         1.43%
                                                              ===========   ===========   ===========   ===========   ===========
       Total investment income--net**                               6.80%         6.69%         6.97%         7.05%         7.32%
                                                              ===========   ===========   ===========   ===========   ===========
       Amount of dividends to Preferred Stock shareholders          1.72%         1.02%          .54%          .61%         1.00%
                                                              ===========   ===========   ===========   ===========   ===========
       Investment income--net, to Common Stock
       shareholders                                                 5.08%         5.67%         6.43%         6.44%         6.32%
                                                              ===========   ===========   ===========   ===========   ===========

Ratios Based on Average Net Assets Applicable to Preferred Stock

       Dividends to Preferred Stock shareholders                    2.71%         1.64%          .86%          .97%         1.51%
                                                              ===========   ===========   ===========   ===========   ===========

Supplemental Data

       Net assets applicable to Common Stock, end of
       year (in thousands)                                    $   315,649   $   328,853   $   316,171   $   304,126   $   313,515
                                                              ===========   ===========   ===========   ===========   ===========
       Preferred Stock outstanding at liquidation
       preference, end of year (in thousands)                 $   203,000   $   203,000   $   203,000   $   203,000   $   203,000
                                                              ===========   ===========   ===========   ===========   ===========
       Portfolio turnover                                             16%           29%            8%           28%           19%
                                                              ===========   ===========   ===========   ===========   ===========

Leverage

       Asset coverage per $1,000                              $     2,555   $     2,620   $     2,557   $     2,498   $     2,544
                                                              ===========   ===========   ===========   ===========   ===========

Dividends Per Share on Preferred Stock Outstanding

       Series A--Investment income--net                       $       683   $       402   $       206   $       233   $       356
                                                              ===========   ===========   ===========   ===========   ===========
       Series B--Investment income--net                       $       682   $       403   $       210   $       240   $       381
                                                              ===========   ===========   ===========   ===========   ===========
       Series C--Investment income--net                       $       689   $       419   $       235   $       247   $       389
                                                              ===========   ===========   ===========   ===========   ===========
       Series D--Investment income--net                       $       673   $       415   $       210   $       240   $       363
                                                              ===========   ===========   ===========   ===========   ===========
       Series E--Investment income--net                       $       655   $       394   $       197   $       247   $       393
                                                              ===========   ===========   ===========   ===========   ===========

          * Based on average shares outstanding.

         ** Do not reflect the effect of dividends to Preferred Stock shareholders.

        *** 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.

            See Notes to Financial Statements.




ANNUAL REPORTS                                                    JULY 31, 2006



Notes to Financial Statements


1. Significant Accounting Policies:
MuniHoldings Fund II, Inc. and MuniHoldings New Jersey Insured Fund, Inc. (the
"Funds" or individually as the "Fund") are registered under the Investment
Company Act of 1940, as amended, as non-diversified, closed-end management
investment companies. The Funds' 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 Funds determine and make available for
publication the net asset value of their Common Stock on a daily basis. The
Funds' Common Stock shares are listed on the New York Stock Exchange under the
symbols MUH and MUJ, respectively. The following is a summary of significant
accounting policies followed by the Funds.

(a) Valuation of investments--Municipal bonds are traded primarily in the over-
the-counter ("OTC") markets and are valued at the last available bid price in
the OTC 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 Funds under the general
direction of the Boards of Directors. Such valuations and procedures are
reviewed periodically by the Board of Directors of the Funds. 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 OTC 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 Funds' 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. Valuation of other
short-term investment vehicles is generally based on the net asset value of
the underlying investment vehicle or amortized cost. 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 Boards of Directors of the Funds.

(b) Derivative financial instruments--Each 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.

* Financial futures contracts--Each 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.

* Options--Each Fund may write covered call options and purchase call and 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.



ANNUAL REPORTS                                                    JULY 31, 2006



Notes to Financial Statements (continued)


* Forward interest rate swaps--Each Fund may enter into swap agreements, which
are OTC contracts in which the Fund and a counterparty agree to make periodic
net payments on a specified notional amount. The net payments can be made for
a set period of time or may be triggered by a predetermined credit event. The
net periodic payments may be based on a fixed or variable interest rate; the
change in market value of a specified security, basket of securities, or
index; or the return generated by a security. These periodic payments received
or made by the Fund are recorded in the accompanying Statement of Operations
as realized gains or losses, respectively. Gains or losses are also realized
upon termination of the swap agreements. Swaps are marked-to-market daily and
changes in value are recorded as unrealized appreciation (depreciation). Risks
include changes in the returns of the underlying instruments, failure of the
counterparties to perform under the contracts' terms and the possible lack of
liquidity with respect to the swap agreements.

(c) Municipal bonds held in trust--The Funds invest in leveraged residual
certificates ("TOB Residuals") issued by tender option bond trusts ("TOBs"). A
TOB is established by a third party sponsor forming a special purpose entity,
into which a Fund, or an agent on behalf of the Fund, transfers municipal
securities. A TOB typically issues two classes of beneficial interests: short-
term floating rate certificates, which are sold to third party investors, and
residual certificates, which are generally issued to the Fund which made the
transfer or to affiliates of the Fund. Each Fund's transfers of the municipal
securities to a TOB do not qualify for sale treatment under Statement of
Financial Accounting Standards No. 140 "Accounting for Transfers and Servicing
of Financial Assets and Extinguishments of Liabilities," therefore the
municipal securities deposited into a TOB are presented in the Funds' schedules
of investments and the proceeds from the transactions are reported as a
liability for trust certificates of the Funds. Similarly, proceeds from
residual certificates issued to affiliates, if any, from the transaction are
included in the liability for trust certificates. Interest income from the
underlying security is recorded by the Funds on an accrual basis. Interest
expense incurred on the secured borrowing and other expenses related to
remarketing, administration and trustee services to a TOB are reported as
expenses of a Fund. The floating rate certificates have interest rates that
generally reset weekly and their holders have the option to tender certificates
to the TOB for redemption at par at each reset date. The residual interests
held by the Funds include the right of the Funds (1) to cause the holders of
a proportional share of floating rate certificates to tender their certificates
at par, and (2) to transfer a corresponding share of the municipal securities
from the TOB to the Funds. At July 31, 2006, the aggregate value of the
underlying municipal securities transferred to TOBs and the related liability
for trust certificates were:

                                              Range of
                                              Interest       Underlying
                                              Rates on        Municipal
                        Liability for    the Liability            Bonds
                                Trust        for Trust      Transferred
                         Certificates     Certificates          to TOBs

MuniHoldings                                   3.65% -
  Fund II, Inc.           $18,270,000            3.66%      $38,203,715

MuniHoldings New
  Jersey Insured                               3.65% -
  Fund, Inc.              $23,032,500            3.66%      $48,146,538


Financial transactions executed through TOBs generally will underperform the
market for fixed rate municipal bonds in a rising interest rate environment,
but tend to outperform the market for fixed rate bonds when interest rates
decline or remain relatively stable. Should short-term interest rates rise,
the Funds' investments in TOB Residuals likely will adversely affect the
Funds' investment income - net and distributions to shareholders. Fluctuations
in the market value of municipal securities deposited into the TOB may
adversely affect the Funds' net asset value per share.

While the Funds' investment policies and restrictions expressly permit
investments in inverse floating rate securities such as TOB Residuals, they
generally do not allow the Funds to borrow money for purposes of making
investments. The Funds' management believes that the Funds' restrictions on
borrowings do not apply to the secured borrowings deemed to have occurred for
accounting purposes.

(d) Income taxes--It is each 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.

(e) Security transactions and investment income--Security transactions are
recorded on the dates the trans-actions 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 Funds amortize all
premiums and discounts on debt securities.

(f) Dividends and distributions--Dividends from net investment income are
declared and paid monthly. Distributions of capital gains are recorded on the
ex-dividend dates.



ANNUAL REPORTS                                                    JULY 31, 2006



Notes to Financial Statements (continued)


(g) Recent accounting pronouncement--In July 2006, the Financial Accounting
Standards Board ("FASB") issued Interpretation No. 48 ("FIN 48") entitled
"Accounting for Uncertainty in Income Taxes - an interpretation of FASB
Statement No. 109." FIN 48 prescribes the minimum recognition threshold a tax
position must meet in connection with accounting for uncertainties in income
tax positions taken or expected to be taken by an entity including mutual
funds before being measured and recognized in the financial statements. FIN 48
is effective for fiscal years beginning after December 15, 2006. The Funds
will adopt FIN 48 during the fiscal 2008 year and the impact on the Funds'
financial statements, if any, is currently being assessed.


2. Investment Advisory Agreement and Transactions with Affiliates:
Each 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 each Fund's portfolio and provides
the necessary personnel, facilities, equipment and certain other services
necessary to the operations of the Fund. For such services, each Fund pays a
monthly fee at an annual rate of .55% of the Fund's average weekly net assets,
including proceeds from the issuance of Preferred Stock for the year ended
July 31, 2006. The Investment Adviser has agreed to reimburse its management
fee by the amount of management fees each Fund pays to FAM indirectly through
its investment described below:

                                                          Reimbursement
                                                                For the
                                                             Year Ended
                                   Investment             July 31, 2006

MuniHoldings Fund II, Inc.         Merrill Lynch
                                   Institutional
                                   Tax-Exempt Fund              $    22

MuniHoldings New Jersey            CMA New Jersey
  Insured Fund, Inc.               Municipal Money Fund         $19,874



In addition, for MuniHoldings New Jersey Insured Fund, Inc., the Investment
Adviser has agreed to reimburse its management fee based on the proceeds of
Preferred Stock that exceeds 35% of the Fund's total net assets. For the year
ended July 31, 2006, FAM earned fees of $2,877,148, of which $167,935 was
waived.

For the year ended July 31, 2006, MuniHoldings Fund II, Inc. and MuniHoldings
New Jersey Insured Fund, Inc. reimbursed FAM $5,584 and $11,597, respectively,
for certain accounting services.

Certain officers and/or directors of the Funds are officers and/or directors
of FAM, PSI, and/or ML & Co.

In February 2006, ML & Co. and BlackRock, Inc. entered into an agreement to
contribute ML & Co.'s investment management business, including FAM, to the
investment management business of BlackRock, Inc. The transaction closed on
September 29, 2006. See Note 7.

On August 15, 2006, shareholders of each Fund approved a new Investment
Advisory Agreement with BlackRock Advisors, Inc., a subsidiary of BlackRock,
Inc., as well as a contingent sub-advisory agreement with BlackRock Advisors,
Inc. BlackRock Advisors, Inc. was recently reorganized into a limited
liability company and renamed BlackRock Advisors, LLC. The new advisory
agreement became effective on September 29, 2006 and the investment advisory
fees did not change.


3. Investments:
Purchases and sales of investments, excluding short-term securities, for the
year ended July 31, 2006 were as follows:


                                                          MuniHoldings
                                                            New Jersey
                                        MuniHoldings           Insured
                                       Fund II, Inc.        Fund, Inc.

Total Purchases                         $106,917,217       $84,862,094
Total Sales                             $111,245,334       $93,828,548



4. Stock Transactions:
Each 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 Boards of Directors are authorized, however,
to reclassify any unissued shares of stock without approval of holders of
Common Stock.


Common Stock

MuniHoldings Fund II, Inc.

Shares issued and outstanding during the years ended July 31, 2006 and July
31, 2005 increased by 21,687 and 18,116, respectively, as a result of dividend
reinvestment.



ANNUAL REPORTS                                                    JULY 31, 2006



Notes to Financial Statements (continued)


MuniHoldings New Jersey Insured Fund, Inc.

Shares issued and outstanding during the years ended July 31, 2006 and July
31, 2005 increased by 122,432 and 11,698, respectively, as a result of
dividend reinvestment.


Preferred Stock

Auction Market Preferred Stock are shares of Preferred Stock of the Funds,
with 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 July 31, 2006 were as follows:


                                                           MuniHoldings
                                                             New Jersey
                                        MuniHoldings            Insured
                                       Fund II, Inc.         Fund, Inc.

Series A                                       3.50%              3.25%
Series B                                       3.50%              3.05%
Series C                                          --              3.25%
Series D                                          --              3.00%
Series E                                          --              3.25%


Each 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 July 31, 2006, Merrill Lynch,
Pierce, Fenner & Smith, Incorporated earned commissions as follows:


                                                        Commissions

MuniHoldings Fund II, Inc.                              $   104,256
MuniHoldings New Jersey Insured Fund, Inc.              $   270,109


5. Distributions to Shareholders:
Each Fund paid a tax-exempt income dividend to holders of Common Stock in the
amounts of $.067000 per share and $.065000 per share relating to MuniHoldings
Fund II, Inc. and MuniHoldings New Jersey Insured Fund, Inc., respectively, on
August 30, 2006 to shareholders of record on August 14, 2006.


MuniHoldings Fund II, Inc.

The tax character of distributions paid during the fiscal years ended July 31,
2006 and July 31, 2005 was as follows:


                                           7/31/2006          7/31/2005

Distributions paid from:
   Tax-exempt income                 $    12,717,464    $    13,218,741
                                     ---------------    ---------------
Total distributions                  $    12,717,464    $    13,218,741
                                     ===============    ===============


As of July 31, 2006, the components of accumulated losses on a tax
basis were as follows:


Undistributed tax-exempt income--net                    $     1,141,699
Undistributed long-term capital gains - net                          --
                                                        ---------------
Total undistributed earnings--net                             1,141,699
Capital loss carryforward                                 (15,556,225)*
Unrealized gains--net                                      13,639,328**
                                                        ---------------
Total accumulated losses--net                           $     (775,198)
                                                        ===============

 * On July 31, 2006, the Fund had a net capital loss carryforward of
   $15,556,225, of which $2,476,693 expires in 2008, $12,200,919
   expires in 2009, $689,205 expires in 2010 and $189,408 expires
   in 2011. 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 difference between book and tax amortization methods
   for premiums and discounts on fixed income securities and the
   difference between the book and tax treatment of residual interests
   in tender option bond trusts.


MuniHoldings New Jersey Insured Fund, Inc.

The tax character of distributions paid during the fiscal years ended
July 31, 2006 and July 31, 2005 was as follows:


                                           7/31/2006          7/31/2005

Distributions paid from:
   Tax-exempt income                 $    23,875,126    $    23,265,678
                                     ---------------    ---------------
Total distributions                  $    23,875,126    $    23,265,678
                                     ===============    ===============


As of July 31, 2006, the components of accumulated losses on a tax
basis were as follows:

Undistributed tax-exempt income--net                    $     2,192,503
Undistributed long-term capital gains--net                           --
                                                        ---------------
Total undistributed earnings--net                             2,192,503
Capital loss carryforward                                 (25,308,382)*
Unrealized gains--net                                      18,362,954**
                                                        ---------------
Total accumulated losses--net                           $   (4,752,925)
                                                        ===============

 * On July 31, 2006, the Fund had a net capital loss carryforward of
   $25,308,382, of which $25,072,488 expires in 2009 and $235,894
   expires in 2011. 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
   straddles, the difference between book and tax amortization
   methods for premiums and discounts on fixed income securities
   and the difference between the book and tax treatment of residual
   interests in tender option bond trusts.



ANNUAL REPORTS                                                    JULY 31, 2006



Notes to Financial Statements (continued)


6. Restatement Information:
Subsequent to the issuance of their July 31, 2006 financial statements, the
Funds determined that the criteria for sale accounting in Statement of
Financial Accounting Standards No. 140 had not been met for certain transfers
of municipal bonds, and that these transfers should have been accounted for as
secured borrowings rather than as sales. Accordingly, the Funds have restated
the Statements of Net Assets, including the Schedules of Investments, as of
July 31, 2006, the Statements 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 for MuniHoldings Fund II, Inc. and for the year ended July 31, 2006
for MuniHoldings New Jersey Insured Fund, Inc. and certain financial highlights
for each of the five years in the period then ended. The effects of the
restatement were to record the transfers of the municipal bonds as secured
borrowings, to give effect to offsetting changes in realized gain - net and in
the change in unrealized appreciation/depreciation - net on the transferred
municipal securities and to give effect to interest on the bonds as interest
income and interest on the secured borrowings as interest expense.


MuniHoldings Fund II, Inc.

Statement of Net Assets
As of July 31, 2006

                                          Previously
                                            Reported           Restated

Investments in unaffiliated
  securities, at value                $  249,051,334     $  267,321,334
Investments in unaffiliated
  securities, identified cost         $  235,928,637     $  254,078,168
Interest receivable                   $    3,685,485     $    3,921,556
Total assets                          $  252,829,781     $  271,335,852
Trust certificates                                --     $   18,270,000
Interest expense payable                          --     $      236,071
Total liabilities                     $      235,402     $  184,741,473
Accumulated realized capital
  losses--net                         $ (15,523,436)     $ (15,643,905)
Unrealized appreciation--net          $   13,122,697     $   13,243,166



Statement of Operations
For the Year Ended July 31, 2006

                                          Previously
                                            Reported           Restated

Interest                              $   13,600,684     $   14,037,357
Total income                          $   13,601,025     $   14,037,698
Interest expense and fees                         --     $      436,673
Total expenses before waiver
  and/or reimbursement                $    1,953,230     $    2,389,903
Total expenses after waiver
  and/or reimbursement                $    1,953,208     $    2,389,881
Realized gain on
  investments--net                    $    1,052,644     $    1,242,209
Total realized gain--net              $    1,052,644     $    1,242,209
Change in unrealized
  appreciation on
  investments--net                    $  (2,329,402)     $  (2,518,967)
Total change in unrealized
  appreciation--net                   $  (2,329,402)     $  (2,518,967)



Statement of Changes in Net Assets
For the Year Ended July 31, 2006

                                          Previously
                                            Reported           Restated

Realized gain--net                    $    1,052,644     $    1,242,209
Change in unrealized
  appreciation--net                   $  (2,329,402)     $  (2,518,967)



Statement of Changes in Net Assets
For the Year Ended July 31, 2005
                                          Previously
                                            Reported           Restated

Realized gain--net                    $    2,156,742     $    2,032,584
Change in unrealized
  appreciation--net                   $   10,744,979     $   10,869,137




Financial Highlights
For the Years Ended July 31, 2006, 2005, 2004, 2003 and 2002


                            2006                  2005                   2004                  2003                   2002

                  Previously            Previously             Previously            Previously             Previously
                    Reported   Restated   Reported   Restated    Reported   Restated   Reported   Restated    Reported   Restated
                                                                                             
Total expenses, net
  of reimbursement*    1.18%      1.44%      1.19%      1.27%       1.21%      1.30%      1.26%      1.38%       1.29%      1.48%
Total expenses*        1.18%      1.44%      1.19%      1.27%       1.22%      1.31%      1.26%      1.38%       1.29%      1.48%
Portfolio turnover    49.12%        41%     45.11%        38%      31.03%        29%     44.03%        42%      46.31%        43%

  * Do not reflect the effect of dividends to Preferred Stock shareholders.




ANNUAL REPORTS                                                    JULY 31, 2006



Notes to Financial Statements (continued)


MuniHoldings New Jersey Insured Fund, Inc.

Statement of Net Assets
As of July 31, 2006

                                          Previously
                                            Reported           Restated

Investments in unaffiliated
  securities, at value                $  514,039,654     $  537,072,154
Investments in unaffiliated
  securities, identified cost         $  496,649,440     $  517,582,828
Interest receivable                   $    5,259,730     $    5,441,290
Total assets                          $  523,723,279     $  546,937,339
Trust certificates                                --     $   23,032,500
Interest expense payable                          --     $      181,560
Total liabilities                     $    4,987,924     $   28,201,984
Accumulated realized capital
  losses--net                         $ (24,392,890)     $ (26,492,002)
Unrealized appreciation--net          $   17,390,214     $   19,489,326



Statement of Operations
For the Year Ended July 31, 2006

                                          Previously
                                            Reported           Restated

Interest                              $   25,330,258     $   26,112,615
Total income                          $   25,430,241     $   26,212,598
Interest expense and fees                         --     $      782,357
Total expenses before waiver
  and reimbursement                   $    3,862,971     $    4,645,328
Total expenses after waiver
  and reimbursement                   $    3,675,162     $    4,457,519
Realized gain on
  investments--net                    $    3,907,246     $    3,062,663
Total realized gain--net              $    3,944,138     $    3,099,555
Change in unrealized
  appreciation on
  investments--net                    $ (16,648,229)     $ (15,803,646)
Total change in unrealized
  appreciation--net                   $ (16,888,244)     $ (16,043,661)



Statement of Changes in Net Assets
For the Year Ended July 31, 2006

                                          Previously
                                            Reported           Restated

Realized gain--net                    $    3,944,138     $    3,099,555
Change in unrealized
  appreciation--net                   $ (16,888,244)     $ (16,043,661)




Financial Highlights
For the Years Ended July 31, 2006, 2005, 2004, 2003 and 2002


                            2006                  2005                   2004                  2003                   2002

                  Previously            Previously             Previously            Previously             Previously
                    Reported   Restated   Reported   Restated    Reported   Restated   Reported   Restated    Reported   Restated
                                                                                             

Total expenses, net
  of waiver and
  reimbursement and
  excluding
  reorganization
  expenses**           1.15%      1.39%      1.14%      1.25%       1.13%      1.19%      1.15%      1.23%       1.19%      1.33%
Total expenses, net
  of waiver and
  reimbursement**      1.15%      1.39%      1.14%      1.25%       1.13%      1.19%      1.15%      1.23%       1.22%      1.35%
Total expenses**       1.21%      1.45%      1.20%      1.31%       1.21%      1.27%      1.23%      1.31%       1.29%      1.43%
Portfolio turnover    19.11%        16%     29.61%        29%       8.53%         8%     28.89%        28%      20.05%        19%

  ** Do not reflect the effect of dividends to Preferred Stock shareholders.




ANNUAL REPORTS                                                    JULY 31, 2006



Notes to Financial Statements (concluded)


While the Statements of Net Assets of the Funds as of July 31, 2005, 2004,
2003 and 2002, not presented herein, have not been reissued to give effect to
the restatement, the principal effects of the restatement would be to increase
investments and payable for floating rate certificates by corresponding
amounts at each year, with no effect on previously reported net assets.

The Statements of Operations of the Funds for the years ended July 31, 2005,
2004, 2003 and 2002, not presented herein, have not been reissued to give
effect to the restatement. However, the principal effects of the restatement
would be to increase interest income and interest expense and fees by
corresponding amounts each year, and where applicable, to revise realized gain
(loss) on investments - net, and the change in unrealized appreciation/
depreciation on investments - net, by corresponding and offsetting amounts.

The Statements of Changes in Net Assets of the Funds for the years ended July
31, 2004, 2003 and 2002, not presented herein, have not been reissued to give
effect to the restatement, but the principal effects of a restatement, where
applicable, would be to revise the previously reported realized gain (loss) on
investments - net, and change in unrealized appreciation/depreciation - net,
by corresponding and offsetting amounts.


7. Subsequent Event:
On September 29, 2006, BlackRock, Inc. and ML & Co. combined ML & Co.'s
investment management business, Merrill Lynch Investment Managers, L.P.,
and its affiliates, including FAM, with BlackRock, Inc. to create a new
independent company. MuniHoldings Fund II, Inc. and MuniHoldings New Jersey
Insured Fund, Inc. were renamed BlackRock MuniHoldings Fund II, Inc. and
BlackRock MuniHoldings New Jersey Insured Fund, Inc., respectively.



ANNUAL REPORTS                                                    JULY 31, 2006



Report of Independent Registered Public Accounting Firm


To the Shareholders and Boards of
Directors of MuniHoldings Fund II, Inc. and
MuniHoldings New Jersey Insured Fund, Inc.:

We have audited the accompanying statements of net assets, including the
schedules of investments, of MuniHoldings Fund II, Inc. and of MuniHoldings New
Jersey Insured Fund, Inc. (the "Funds") as of July 31, 2006, and the related
statements of operations, the statements of changes in net assets, and the
financial highlights for the year then ended. These financial statements and
financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on the financial statements and
financial highlights based on our audits. The statement of changes in net
assets of MuniHoldings Fund II, Inc. for the year ended July 31, 2005 (before
the restatements described in Note 6) and the financial highlights for each of
the four years in the period then ended (before the restatements described in
Note 6) and the financial highlights of MuniHoldings New Jersey Insured Fund,
Inc. for each of the four years in the period then ended (before the
restatements described in Note 6) were audited by other auditors whose report,
dated September 21, 2005, expressed qualified opinions on those financial
statements and financial highlights because of the errors described in Note 6.
Also, the statement of changes in net assets of MuniHoldings New Jersey Insured
Fund, Inc. for the year ended July 31, 2005 was audited by other auditors whose
report dated September 21, 2005, expressed an unqualified opinion on that
financial statement.

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. The Funds are not required to have, nor were we engaged to
perform, an audit of their internal control over financial reporting. Our
audits included consideration of internal control over financial reporting as a
basis for designing audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the
Funds' internal control over financial reporting. Accordingly, we express no
such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. Our procedures
included confirmation of securities owned as of July 31, 2006, by
correspondence with the custodian and brokers. Where replies were not received
by brokers, we performed other auditing procedures. We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights of
MuniHoldings Fund II, Inc. and of MuniHoldings New Jersey Insured Fund, Inc.
referred to above, present fairly, in all material respects, their respective
financial positions as of July 31, 2006, the results of their operations, the
changes in their net assets and their financial highlights for the year then
ended, in conformity with accounting principles generally accepted in the
United States of America.

As discussed in Note 6, the statements of net assets, including the schedules
of investments as of July 31, 2006, and the related statement of operations,
the statement of changes in net assets and the financial highlights for the
year then ended have been restated.

We also have audited the adjustments, applied by management, to restate the
statement of changes in net assets of MuniHoldings Fund II, Inc. for the year
ended July 31, 2005 and certain financial highlights of each of the Funds for
each of the four years in the period then ended, to correct the errors
described in Note 6. These adjustments are the responsibility of the Funds'
management. The audit procedures that we performed with respect to the
adjustments included such tests as we considered necessary in the circumstances
and were designed to obtain reasonable assurance about whether the adjustments
are appropriate and have been properly applied, in all material respects, to
the restated statement of changes in net assets of MuniHoldings Fund II, Inc.
for the year ended July 31, 2005, and to the restated information in the Funds'
financial highlights for each of the four years in the period ended July 31,
2005. We did not perform any audit procedures designed to assess whether any
additional adjustments or disclosures to the Funds' financial statements or
financial highlights as of July 31, 2005, and for each of the four years in the
period then ended, might be necessary in order for such financial statements or
financial highlights to be presented in conformity with generally accepted
accounting principles in the United States of America. In our opinion, the
adjustments to the statement of changes in net assets of the MuniHoldings Fund
II, Inc. for the year ended July 31, 2005 and to the Funds' financial
highlights for each of the four years in the period then ended, for the
restatement described in Note 6, are appropriate and have been properly
applied, in all material respects. However, we were not engaged to audit,
review, or apply any procedures to the Funds' financial statements or financial
highlights as of July 31, 2005, and for each of the four years in the period
then ended, other than with respect to the adjustments to the MuniHoldings Fund
II, Inc.'s statement of changes in net assets and the Funds' financial
highlights for the restatement described in Note 6 and, accordingly, we do not
express an opinion or any other form of assurance on the Funds' financial
statements as of July 31, 2005, or on their financial highlights for each of
the years in the four year period then ended.


Deloitte & Touche LLP
Princeton, New Jersey
September 20, 2006
(May 18, 2007 as to the effects of the restatements disclosed in
Note 6 and the subsequent event disclosed in Note 7.)



ANNUAL REPORTS                                                    JULY 31, 2006



Report of Independent Registered Public Accounting Firm


To the Shareholders and Board of Directors
of MuniHoldings Fund II, Inc. and
MuniHoldings New Jersey Insured Fund, Inc.:

We have audited, before the effects of the adjustments for the correction of
the error described in Note 6, the accompanying statement of changes in net
assets of MuniHoldings Fund II, Inc. for the year ended July 31, 2005, and
financial highlights for each of the four years in the period then ended. We
have also audited the accompanying statement of changes in net assets of
MuniHoldings New Jersey Insured Fund, Inc. for the year ended July 31, 2005,
and financial highlights, before the effects of the adjustments for the
correction of the error described in Note 6, for each of the four years in the
period then ended. The 2005 financial statement and financial highlights
referred to above for MuniHoldings Fund II and the 2005 financial highlights
referred to above for MuniHoldings New Jersey Insured Fund, Inc., before the
effects of the adjustments discussed in Note 6 are not presented herein. These
financial statements and financial highlights are the responsibility of the
Funds' 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. We were not engaged to perform an audit of the Fund's internal
control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the Fund's internal control
over financial reporting. Accordingly, we express no such opinion. An audit
also includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements and financial highlights, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.

In our opinion, except for the error described in Note 6, the 2005 financial
statement and financial highlights referred to above present fairly, in all
material respects, the changes in net assets of MuniHoldings Fund II, Inc. for
the year ended July 31, 2005, and its financial highlights for each of the
four years in the period then ended, in conformity with U.S. generally
accepted accounting principles. Also, in our opinion, the 2005 financial
statement and, except for the error described in Note 6, the financial
highlights referred to above present fairly, in all material respects, the
changes in net assets of MuniHoldings New Jersey Insured Fund, Inc., for the
year ended July 31, 2005, and its financial highlights for each of the four
years in the period then ended, in conformity with U.S. generally accepted
accounting principles.

We were not engaged to audit, review, or apply any procedures to the
adjustments for the correction of the error described in Note 6 and,
accordingly, we do not express an opinion or any other form of assurance about
whether such adjustments are appropriate and have been properly applied. Those
adjustments were audited by Deloitte & Touche LLP.


(Ernst & Young LLP)
Philadelphia, Pennsylvania
September 12, 2005



Fund Certification (Unaudited)


In February 2006, MuniHoldings Fund II, Inc. and MuniHoldings New Jersey
Insured Fund, Inc. filed their Chief Executive Officer Certification for the
prior year with the New York Stock Exchange pursuant to Section 303A.12(a) of
the New York Stock Exchange Corporate Governance Listing Standards.

The Funds' Chief Executive Officer and Chief Financial Officer Certifications
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 were filed with the
Funds' Form N-CSR and are available on the Securities and Exchange
Commission's Web site at http://www.sec.gov.



ANNUAL REPORTS                                                    JULY 31, 2006



Automatic Dividend Reinvestment Plan


How the Plan Works--The Funds offer a Dividend Reinvestment Plan (the "Plan")
under which income and capital gains dividends paid by each Fund are
automatically reinvested in additional shares of Common Stock of each Fund.
The Plan is administered on behalf of the shareholders by The Bank of New York
(the "Plan Agent"). Under the Plan, whenever the Funds declare a dividend,
participants in the Plan will receive the equivalent in shares of Common Stock
of each Fund. The Plan Agent will acquire the shares for the participant's
account either (i) through receipt of additional unissued but authorized
shares of each Fund ("newly issued shares") or (ii) by purchase of outstanding
shares of Common Stock on the open market on the New York Stock Exchange or
elsewhere. If, on the dividend payment date, each Fund's net asset value per
share is equal to or less than the market price per share plus estimated
brokerage commissions (a condition often referred to as a "market premium"),
the Plan Agent will invest the dividend amount in newly issued shares. If the
Funds' net asset value per share is greater than the market price per share (a
condition often referred to as a "market discount"), the Plan Agent will
invest the dividend amount by purchasing on the open market additional shares.
If the Plan Agent is unable to invest the full dividend amount in open market
purchases, or if the market discount shifts to a market premium during the
purchase period, the Plan Agent will invest any uninvested portion in newly
issued shares. The shares acquired are credited to each shareholder's account.
The amount credited is determined by dividing the dollar amount of the
dividend by either (i) when the shares are newly issued, the net asset value
per share on the date the shares are issued or (ii) when shares are purchased
in the open market, the average purchase price per share.

Participation in the Plan--Participation in the Plan is automatic, that is, a
shareholder is automatically enrolled in the Plan when he or she purchases
shares of Common Stock of the Funds unless the shareholder specifically elects
not to participate in the Plan. Shareholders who elect not to participate will
receive all dividend distributions in cash. Shareholders who do not wish to
participate in the Plan must advise the Plan Agent in writing (at the address
set forth below) that they elect not to participate in the Plan. Participation
in the Plan is completely voluntary and may be terminated or resumed at any
time without penalty by writing to the Plan Agent.

Benefits of the Plan--The Plan provides an easy, convenient way for
shareholders to make additional, regular investments in the Funds. The Plan
promotes a long-term strategy of investing at a lower cost. All shares
acquired pursuant to the Plan receive voting rights. In addition, if the
market price plus commissions of each Fund's shares is above the net asset
value, participants in the Plan will receive shares of the Funds for less than
they could otherwise purchase them and with a cash value greater than the
value of any cash distribution they would have received. However, there may
not be enough shares available in the market to make distributions in shares
at prices below the net asset value. Also, since each Fund does not redeem
shares, the price on resale may be more or less than the net asset value.

Plan Fees--There are no enrollment fees or brokerage fees for participating in
the Plan. The Plan Agent's service fees for handling the reinvestment of
distributions are paid for by the Funds. However, brokerage commissions may be
incurred when the Funds purchase shares on the open market and shareholders
will pay a pro rata share of any such commissions.

Tax Implications--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. Therefore,
income and capital gains may still be realized even though shareholders do not
receive cash. Participation in the Plan generally will not effect the tax-
exempt status of exempt interest dividends paid by the Fund. If, when the
Funds' shares are trading at a market premium, the Funds issue 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 the discount from the
market value (which may not exceed 5% of the fair market value of each 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.

Contact Information--All correspondence concerning the Plan, including any
questions about 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.



ANNUAL REPORTS                                                    JULY 31, 2006



Disclosure of Investment Advisory Agreement


Activities and Composition of the Boards of Directors

All but one member of each Board of Directors is an independent director,
whose only association with Fund Asset Management, L.P. (the "Investment
Adviser") or other Merrill Lynch affiliates is as a director of each Fund and
as a trustee or director of certain other funds advised by the Investment
Adviser or its affiliates. The Chairman of the Boards is also an independent
director. New director nominees are chosen by a Nominating Committee comprised
of independent directors. All independent directors also are members of each
Board's Audit Committee, and the independent directors meet in executive
session at each in-person Board meeting. Each Board and each Audit Committee
meet in person for at least two days each quarter and conduct other in-person
and telephone meetings throughout the year, some of which are formal Board
meetings and some of which are informational meetings. The independent counsel
to the independent directors attends all in-person Board and Audit Committee
meetings and other meetings at the independent directors' request.


Investment Advisory Agreement--Matters Considered by the Boards

Every year, each Board considers approval of the Fund's investment advisory
agreement (the "Investment Advisory Agreement"). Each Board assesses the
nature, scope and quality of the services provided to the Fund by the
personnel of the Investment Adviser and its affiliates, including
administrative services, shareholder services, oversight of fund accounting,
marketing services and assistance in meeting legal and regulatory
requirements. Each Board also receives and assesses information regarding the
services provided to the Fund by certain unaffiliated service providers.

At various times throughout the year, each Board also considers a range of
information in connection with its oversight of the services provided by the
Investment Adviser and its affiliates. Among the matters considered are: (a)
fees (in addition to management fees) paid to the Investment Adviser and its
affiliates by the Fund; (b) Fund operating expenses paid to third parties; (c)
the resources devoted to and compliance reports relating to the Fund's
investment objective, policies and restrictions, and its compliance with its
Code of Ethics and compliance policies and procedures; and (d) the nature,
cost and character of non-investment management services provided by the
Investment Adviser and its affiliates.

Each Board believes that the Investment Adviser is one of the most experienced
global asset management firms and considers the overall services provided by
the Investment Adviser to be of high quality. Each Board also believes that
the Investment Adviser is financially sound and well managed and notes that
the Investment Adviser is affiliated with one of America's largest financial
firms. Each Board works closely with the Investment Adviser in overseeing the
Investment Adviser's efforts to achieve good performance. As part of this
effort, each Board discusses portfolio manager effectiveness and, when
performance is not satisfactory, discusses with the Investment Adviser taking
steps such as changing investment personnel.


Annual Consideration of Approval by the Boards of Directors

In the period prior to the Board meeting to consider renewal of the Investment
Advisory Agreement, each Board requests and receives materials specifically
relating to the Investment Advisory Agreement. These materials are prepared
separately for each Fund and include (a) information compiled by Lipper Inc.
("Lipper") on the fees and expenses, investment performance and leverage of
the Fund as compared to a comparable group of funds as classified by Lipper;
(b) information comparing each Fund's market price with its net asset value
per share; (c) a discussion by the Fund's portfolio management team regarding
investment strategies used by the Fund during its most recent fiscal year; (d)
information on the profitability to the Investment Adviser and its affiliates
of the Investment Advisory Agreement and other relationships with the Fund;
and (e) information provided by the Investment Adviser concerning investment
advisory fees charged to other retail closed-end funds under similar
investment mandates. Each Board also considers other matters it deems
important to the approval process, such as payments made for services related
to the valuation and pricing of Fund portfolio holdings, the Fund's portfolio
turnover statistics, and direct and indirect benefits to the Investment
Adviser and its affiliates from their relationship with the Fund. The Boards
did not identify any particular information as controlling, and each member of
the Boards may have attributed different weights to the various items
considered.


Certain Specific Renewal Data

In connection with the most recent renewal of each Fund's Investment Advisory
Agreement in February 2006, the independent directors' and Boards' review
included the following:



ANNUAL REPORTS                                                    JULY 31, 2006



Disclosure of Investment Advisory Agreement (concluded)


Services Provided by the Investment Adviser--Each Board reviewed the nature,
extent and quality of services provided by the Investment Adviser, including
the investment advisory services and the resulting performance of the Fund.
Each Board focused primarily on the Investment Adviser's investment advisory
services and the Fund's investment performance. Each Board compared Fund
performance - both including and excluding the effects of the Fund's fees and
expenses - to the performance of a comparable group of funds and the
performance of a relevant index or combination of indexes. The Board
considered the small number of funds classified by Lipper as comparable funds
to MuniHoldings New Jersey Insured Fund, Inc. While each Board reviews
performance data at least quarterly, consistent with the Investment Adviser's
investment goals, the Boards attach more importance to performance over
relatively long periods of time, typically three to five years.

Relative to closed-end leveraged general municipal debt funds deemed comparable
by the Investment Adviser, the Board noted that for the periods ended November
30, 2005, MuniHoldings Fund II, Inc.'s performance for the one-, three- and
five-year periods ranked in the first quintile. The Board also reviewed
MuniHoldings Fund II, Inc.'s performance based on annualized total return and
annualized yield. The Board noted that with respect to both total return and
yield the Fund ranked in the first quintile for the years ended November 30,
2005, 2004 and 2003; with respect to total return in the third quintile for
the year ended November 30, 2002 and the first quintile for the year ended
November 30, 2001; and with respect to yield in the second quintile for the
years ended November 30, 2002 and 2001. The Board noted the lack of any
significant number of comparable closed-end leveraged New Jersey municipal debt
funds, but did note that relative to the three comparable funds identified
MuniHoldings New Jersey Insured Fund, Inc.'s performance for the periods ended
November 30, 2005 ranked third out of three funds for the one-year period,
second out of three funds for the three-year period and first out of two funds
for the five-year period. The Board also noted that MuniHoldings New Jersey
Insured Fund, Inc.'s performance based on annualized yields ranked second out
of three funds for the years ended November 30, 2005 and 2003, third out of
three funds for the year ended November 30, 2004, and second out of two funds
for the years ended November 30, 2002 and 2001. Each Board concluded that the
Fund's performance supported the continuation of the Investment Advisory
Agreement.

The Investment Adviser's Personnel and Investment Process--Each Board reviewed
the Fund's investment objectives and strategies. Each Board discusses with
senior management of the Investment Adviser responsible for investment
operations and the senior management of the Investment Adviser's municipal
investing group the strategies being used to achieve the stated objectives.
Among other things, each Board considers the size, education and experience of
the Investment Adviser's investment staff, its use of technology, and the
Investment Adviser's approach to training and retaining portfolio managers and
other research, advisory and management personnel. Each Board also reviews the
Investment Adviser's compensation policies and practices with respect to the
Fund's portfolio manager. Each Board also considered the experience of the
Fund's portfolio manager. It was noted that Mr. DiMella, the port-folio
manager for MuniHoldings Fund II, Inc., has more than 13 years' experience in
portfolio management and Mr. Jaeckel, the portfolio manager for MuniHoldings
New Jersey Insured Fund, Inc., has more than 15 years' experience. The Boards
considered that the Investment Adviser and its investment staff have extensive
experience in analyzing and managing the types of investments used by the
Funds. The Boards concluded that the Funds benefit from that experience.

Management Fees and Other Expenses--Each Board reviews the Fund's contractual
management fee rate and actual management fee rate as a percentage of total
assets at common asset levels - the actual rate includes advisory and
administrative service fees and the effects of any fee waivers - compared to
the other funds in its Lipper category. It also compares the Fund's total
expenses to those of other comparable funds. Each Board considered the
services provided to and the fees charged by the Investment Adviser to retail
closed-end funds with similar investment mandates. The Boards noted that the
investment advisory fees charged to each of the Funds was equal to or slightly
more than the fees charged to other retail closed-end funds of the Investment
Adviser. With respect to MuniHoldings Fund II, Inc., the Board noted that the
contractual and actual management fee rates and total expense ratio were below
the median fees charged by comparable funds, as determined by Lipper. With
respect to MuniHoldings New Jersey Insured Fund, Inc., the Board noted that
the contractual management fee rate was equal to and the actual management fee
rate was higher than the median fee charged by comparable funds, as determined
by Lipper, while the actual total expense ratio was slightly lower than the
median charged by such comparable funds. The Boards concluded that each Fund's
management fee rate (including fee waivers) and overall expense ratio are
reasonable compared to those of other comparable funds.



ANNUAL REPORTS                                                    JULY 31, 2006



Profitability--Each Board considers the cost of the ser-vices provided to the
Fund by the Investment Adviser and the Investment Adviser's and its affiliates'
profits relating to the management and distribution of the Fund and the MLIM/
FAM-advised funds. As part of its analysis, each Board reviewed the Investment
Adviser's methodology in allocating its costs to the management of the Fund
and concluded that there was a reasonable basis for the allocation. The Boards
also considered federal court decisions discussing an investment adviser's
profitability and profitability levels considered to be reasonable in those
decisions. Each Board concluded that the profits of the Investment Adviser and
its affiliates are acceptable in relation to the nature and quality of services
provided and given the level of fees and expenses overall.

Economies of Scale--Each Board considered the extent to which economies of
scale might be realized as the assets of the Fund increase and whether there
should be changes in the management fee rate or structure in order to enable
the Fund to participate in these economies of scale. Each Board considered
economies of scale to the extent applicable to each Fund's closed-end
structure and determined that each Fund appropriately benefits from any
economies of scale. Each Board determined that no changes were currently
necessary.


Conclusion

After the independent directors deliberated in executive session, each entire
Board, including all of the independent directors, approved the renewal of the
existing Investment Advisory Agreement, concluding that the advisory fee was
reasonable in relation to the services provided and that a contract renewal
was in the best interests of the shareholders.



ANNUAL REPORTS                                                    JULY 31, 2006



Disclosure of New Investment Advisory Agreement


New BlackRock Investment Advisory Agreements--Matters Considered by the Boards

In connection with the Transaction between Merrill Lynch and BlackRock, each
Fund's Board of Directors considered a new investment advisory agreement (each
a "New Investment Advisory Agreement") between the Fund and BlackRock
Advisors, Inc. or its successor ("BlackRock Advisors"). Each Fund's New
Investment Advisory Agreement has been approved by the Fund's shareholders and
is expected to become effective upon the closing of the Transaction in the
third quarter of 2006.

The Boards discussed the New Investment Advisory Agreements at telephonic and
in-person meetings held during April and May 2006. Each Board, including the
independent directors, approved the applicable New Investment Advisory
Agreement at a meeting held on May 12, 2006.

To assist each Fund's Board in its consideration of the Fund's New Investment
Advisory Agreement, BlackRock provided materials and information about
BlackRock, including its financial condition and asset management capabilities
and organization, and Merrill Lynch provided materials and information about
the Transaction. Each Fund's independent directors, through their independent
legal counsel, also requested and received additional information from Merrill
Lynch and BlackRock in connection with their consideration of the Fund's New
Investment Advisory Agreement. The additional information was provided in
advance of the May 12, 2006 meetings. In addition, each Fund's independent
directors consulted with their counsel and Fund counsel on numerous occasions,
discussing, among other things, the legal standards and certain other
considerations relevant to the directors' deliberations.

At each Fund's Board meetings, the directors discussed with Merrill Lynch
management and certain BlackRock representatives the Transaction, its strategic
rationale and BlackRock's general plans and intentions regarding the Fund. At
these Board meetings, representatives of Merrill Lynch and BlackRock made
presentations to and responded to questions from the Boards. The directors also
inquired about the plans for and anticipated roles and responsibilities of
certain employees and officers of the Investment Adviser and certain affiliates
being transferred to BlackRock in connection with the Transaction. The
independent directors also conferred separately and with their counsel about
the Transaction and other matters related to the Transaction on a number of
occasions, including in connection with the April and May 2006 meetings. After
the presentations and after reviewing the written materials provided, each
Fund's independent directors met in executive sessions with their counsel to
consider the Fund's New Investment Advisory Agreement.

In connection with each Board's review of the New Investment Advisory
Agreement, Merrill Lynch and/or BlackRock advised the directors about a
variety of matters. The advice included the following, among other matters:

* that there is not expected to be any diminution in the nature, quality and
  extent of services provided to each Fund and its shareholders by BlackRock
  Advisors, including compliance services;

* that operation of New BlackRock as an independent investment management
  firm will enhance its ability to attract and retain talented professionals;

* that each Fund should benefit from having access to BlackRock's state of
  the art technology and risk management analytic tools, including investment
  tools, provided under the BlackRock Solutions (R) brand name;

* that BlackRock has no present intention to alter any applicable expense
  waivers or reimbursements currently in effect and, while it reserves the
  right to do so in the future, it would seek Board approval before making
  any changes;

* that in connection with the Transaction, Merrill Lynch and BlackRock have
  agreed to conduct, and use reasonable best efforts to cause their
  respective affiliates to conduct, their respective businesses in compliance
  with the conditions of Section 15(f) of the Investment Company Act of 1940
  (the "1940 Act") in relation to any public funds advised by BlackRock or
  the Investment Adviser (or its affiliates), respectively; and

* that Merrill Lynch and BlackRock would derive benefits from the Transaction
  and that, as a result, they have a different financial interest in the
  matters that were being considered than do Fund shareholders.

The directors considered the information provided by Merrill Lynch and
BlackRock above, and, among other factors, the following:

* the potential benefits to each Fund's shareholders from being part of a
  combined fund family with BlackRock-sponsored funds, including possible
  economies of scale and access to investment opportunities;



ANNUAL REPORTS                                                    JULY 31, 2006



* the reputation, financial strength and resources of BlackRock and its
  investment advisory subsidiaries and the anticipated financial strength and
  resources of New BlackRock;

* the compliance policies and procedures of BlackRock Advisors;

* the terms and conditions of each New Investment Advisory Agreement,
  including the fact that neither Fund's schedule of total advisory fees will
  increase by virtue of the Fund's New Investment Advisory Agreement, but
  will remain the same;

* that in February 2006, each Fund's Board performed a full annual review of
  the investment advisory agreement currently in effect for the Fund (each a
  "Current Investment Advisory Agreement") as required by the 1940 Act and
  determined that the Investment Adviser has the capabilities, resources and
  personnel necessary to provide the advisory and administrative services
  currently provided to the Fund; and that the advisory and/or management
  fees to be paid by the Fund, taking into account any applicable agreed-upon
  fee waivers and breakpoints, represented reasonable compensation to the
  Investment Adviser in light of the services to be provided, the expected
  costs to the Investment Adviser of providing those services, potential
  economies of scale, the fees and other expenses paid by similar funds
  (including information provided by Lipper Inc. ["Lipper"]), and such other
  matters as the directors considered relevant in the exercise of their
  reasonable judgment; and

* that Merrill Lynch agreed to pay all expenses of each Fund in connection
  with the Board's consideration of the New Investment Advisory Agreement and
  related agreements and all costs of shareholder approval of the New
  Investment Advisory Agreement and as a result the Fund would bear no costs
  in obtaining shareholder approval of the New Investment Advisory Agreement.

Certain of these considerations are discussed in more detail below.

In its review of the New Investment Advisory Agreement, each Board assessed
the nature, scope and quality of the services to be provided to the applicable
Fund by the personnel of BlackRock Advisors and its affiliates, including
administrative services, shareholder services, oversight of fund accounting
and assistance in meeting legal and regulatory requirements. In its review of
the New Investment Advisory Agreement, each Board also considered a range of
information in connection with its oversight of the services to be provided by
BlackRock Advisors and its affiliates. Among the matters considered by each
Board were: (a) fees (in addition to management fees) to be paid to BlackRock
Advisors and its affiliates by the Fund; (b) Fund operating expenses paid to
third parties; (c) the resources devoted to and compliance reports relating to
the Fund's investment objective, policies and restrictions, and its compliance
with its Code of Ethics and BlackRock Advisors' compliance policies and
procedures; and (d) the nature, cost and character of non-investment
management services to be provided by BlackRock Advisors and its affiliates.

In the period prior to each Fund's Board meeting to consider the renewal of
the Fund's Current Investment Advisory Agreement, the Board had requested and
received materials specifically relating to the Current Investment Advisory
Agreement. For each Fund, these materials included (a) information compiled by
Lipper on the fees and expenses and the investment performance of the Fund as
compared to a comparable group of funds as classified by Lipper; (b)
information comparing the Fund's market price with its net asset value per
share; (c) a discussion by the Fund's portfolio management team on investment
strategies used by the Fund during its most recent fiscal year; (d)
information on the profitability to the Investment Adviser of the Current
Investment Advisory Agreement and other payments received by the Investment
Adviser and its affiliates from the Fund; and (e) information provided by the
Investment Adviser concerning services related to the valuation and pricing of
Fund portfolio holdings, the Fund's portfolio turnover statistics, and direct
and indirect benefits to the Investment Adviser and its affiliates from their
relationship with the Fund.

In their deliberations, each Fund's directors considered information received
in connection with their recent continuation of the Fund's Current Investment
Advisory Agreement, in addition to information provided by BlackRock and
BlackRock Advisors in connection with their evaluation of the terms and
conditions of the Fund's New Investment Advisory Agreement. Neither Fund's
directors identified any particular information that was all-important or
controlling, and each director attributed different weights to the various
factors. The directors of each Fund, including a majority of the independent
directors, concluded that the terms of the Fund's New Investment Advisory
Agreement are appropriate, that the fees to be paid are reasonable in light of
the services to be provided to the Fund, and that the New Investment Advisory
Agreement should be approved and recommended to Fund shareholders.



ANNUAL REPORTS                                                    JULY 31, 2006



Disclosure of New Investment Advisory Agreement (continued)


Nature, Quality and Extent of Services Provided--Each Fund's Board reviewed
the nature, extent and quality of services provided by the Investment Adviser,
including the investment advisory services and the resulting performance of
the Fund, as well as the nature, quality and extent of services expected to be
provided by BlackRock Advisors. Each Fund's Board focused primarily on the
Investment Adviser's advisory services and the Fund's investment performance,
but also considered certain areas in which both the Investment Adviser and the
Fund receive services as part of the Merrill Lynch complex. Each Fund's Board
compared the Fund's performance - both including and excluding the effects of
the Fund's fees and expenses - to the performance of a comparable group of
funds, and the performance of a relevant index or combination of indexes.
While each Board reviews performance data at least quarterly, consistent with
the Investment Adviser's investment goals, the Board attaches more importance
to performance over relatively long periods of time, typically three to five
years.

In evaluating the nature, quality and extent of the services to be provided by
BlackRock Advisors under the New Investment Advisory Agreement, each Fund's
directors considered, among other things, the expected impact of the
Transaction on the operations, facilities, organization and personnel of New
BlackRock and how it would affect the Fund; the ability of BlackRock Advisors
to perform its duties after the Transaction; and any anticipated changes to
the current investment and other practices of the Fund.

Each Fund's directors were given information with respect to the potential
benefits to the Fund and its shareholders from having access to BlackRock's
state of the art technology and risk management analytic tools, including the
investment tools provided under the BlackRock Solutions brand name.

Each Fund's directors were advised that, as a result of Merrill Lynch's equity
interest in BlackRock after the Transaction, the Fund will continue to be
subject to restrictions concerning certain transactions involving Merrill
Lynch affiliates (for example, transactions with a Merrill Lynch broker-dealer
acting as principal) absent revised or new regulatory relief. Each Fund's
directors were advised that a revision of existing regulatory relief with
respect to these restrictions was being sought from the Securities and
Exchange Commission and were advised of the possibility of receipt of such
revised regulatory relief. There can be no assurance that such relief will be
obtained.

Based on their review of the materials provided and the assurances they had
received from the management of Merrill Lynch and of BlackRock, each Fund's
directors determined that the nature and quality of services to be provided to
the Fund under the New Investment Advisory Agreement were expected to be as
good as or better than that provided under the Fund's Current Investment
Advisory Agreement. It was noted, however, that it is expected that there will
be changes in personnel following the Transaction and the combination of the
operations of the Investment Adviser and its affiliates with those of
BlackRock. Each Fund's directors noted that if current portfolio managers or
other personnel cease to be available, the Board would consider all available
options, which could include seeking the investment advisory or other services
of BlackRock affiliates. Accordingly, each Fund's directors concluded that,
overall, they were satisfied at the present time with assurances from
BlackRock and BlackRock Advisors as to the expected nature, extent and quality
of the services to be provided to the Fund under its New Investment Advisory
Agreement.

Costs of Services Provided and Profitability--It was noted that, in
conjunction with their recent review of each Fund's Current Investment
Advisory Agreement, the Fund's directors had received, among other things, a
report from Lipper comparing the Fund's expected fees and expenses to those of
a peer group selected by Lipper, and information as to the fees charged by the
Investment Adviser or its affiliates to other registered investment company
clients for investment management services. Each Fund's Board reviewed the
Fund's contractual management fee rate and actual management fee rate as a
percentage of total assets at common asset levels - the actual rate includes
advisory fees and the effects of any fee waivers - compared to the other funds
in its Lipper category. Each Fund's Board also compared the Fund's total
expenses to those of other comparable funds. The information showed that each
Fund had fees and expenses within the range of fees and expenses of comparable
funds. Each Fund's Board considered the services to be provided by and the
fees to be charged by BlackRock Advisors to other funds with similar
investment mandates and noted that the fees charged by BlackRock Advisors in
those cases, including fee waivers and expense reimbursements, were generally
comparable to those being charged to the Fund. Each Fund's Board concluded
that the Fund's management fee and fee rate and overall expense ratio are
reasonable compared to those of other comparable funds.



ANNUAL REPORTS                                                    JULY 31, 2006



In evaluating the costs of the services to be provided by BlackRock Advisors
under each Fund's New Investment Advisory Agreement, the Fund's directors
considered, among other things, whether advisory fees or other expenses would
change as a result of the Transaction. Based on their review of the materials
provided and the fact that each New Investment Advisory Agreement is
substantially similar to the applicable Current Investment Advisory Agreement
in all material respects, including the rate of compensation, each Fund's
directors determined that the Transaction should not increase the total fees
payable, including any fee waivers and expense reimbursements, for advisory
and administrative services. Each Fund's directors noted that it was not
possible to predict how the Transaction would affect BlackRock Advisors'
profitability from its relationship with the Fund.

Each Fund's directors discussed with BlackRock Advisors its general
methodology to be used in determining its profitability with respect to its
relationship with the Fund. The directors noted that they expect to receive
profitability information from BlackRock Advisors on at least an annual basis
and thus be in a position to evaluate whether any adjustments in Fund fees
and/or fee breakpoints would be appropriate.

Fees and Economies of Scale--Each Fund's Board considered the extent to which
economies of scale might be realized as the assets of the Fund increase and
whether there should be changes in the management fee rate or structure in
order to enable the Fund to participate in these economies of scale. Each
Fund's Board determined that changes were not currently necessary.

In reviewing the Transaction, the directors considered, among other things,
whether advisory fees or other expenses would change as a result of the
Transaction. Based on the fact that each New Investment Advisory Agreement is
substantially similar to the applicable Current Investment Advisory Agreement
in all material respects, including the rate of compensation, each Fund's
directors determined that as a result of the Transaction, the Fund's total
advisory fees would be no higher than the fees under Investment Advisory
Agreement. Each Fund's directors noted that in conjunction with their most
recent deliberations concerning the Current Investment Advisory Agreement,
they had determined that the expected total fees for advisory and
administrative services for the Fund were reasonable in light of the services
to be provided. It was noted that in conjunction with the recent review of
each Current Investment Advisory Agreement, each Fund's directors had
received, among other things, a report from Lipper comparing the Fund's
expected fees and expenses to those of a peer group selected by Lipper, and
information as to the fees charged by the Investment Adviser or its affiliates
to other registered investment company clients for investment management
services. Each Fund's directors concluded that, because the rates for advisory
fees for the Fund would be no higher than its current fee rates, the proposed
management fee structure, including any fee waivers, was reasonable and that
no additional changes were currently necessary.

Fall-Out Benefits--In evaluating the fall-out benefits to be received by
BlackRock Advisors under the New Investment Advisory Agreement, each Fund's
directors considered whether the Transaction would have an impact on the fall-
out benefits received by the Investment Adviser by virtue of the Current
Investment Advisory Agreement. Based on their review of the materials
provided, including materials received in connection with their most recent
approval of the Current Investment Advisory Agreement, and their discussions
with management of the Investment Adviser and BlackRock, each Fund's directors
determined that those benefits could include increased ability for BlackRock
to distribute shares of its funds and other investment products. The directors
noted that any fall-out benefits were difficult to quantify with certainty at
this time, and indicated that they would continue to evaluate them going
forward.

Investment Performance--Each Fund's directors considered investment performance
for the Fund. Each Fund's directors compared the Fund's performance - both
including and excluding the effects of the Fund's fees and expenses - to the
performance of a comparable group of funds, and the performance of a relevant
index or combination of indexes. The comparative information received from
Lipper showed each Fund's performance at various levels within the range of
performance of comparable funds over different time periods. While each Board
reviews performance data at least quarterly, consistent with the Investment
Adviser's investment goals, the Board attaches more importance over relatively
long periods of time, typically three to five years. Each Fund's directors
believed the Fund's performance was satisfactory. Also, the directors took
into account the investment performance of funds currently advised by
BlackRock Advisors. Each Board considered comparative information from Lipper
which showed that the performance of the funds advised by BlackRock Advisors
was within the range of performance of comparable funds over different time
periods. Each Fund's Board noted BlackRock's considerable investment
management experience and capabilities, but was unable to predict what effect,
if any, consummation of the Transaction would have on the future performance
of the Fund.



ANNUAL REPORTS                                                    JULY 31, 2006



Disclosure of New Investment Advisory Agreement (concluded)


Conclusion--After the independent directors of each Fund deliberated in
executive session, the Fund's entire Board, including the independent
directors, approved the Fund's New Investment Advisory Agreement, concluding
that the advisory fee rate was reasonable in relation to the services provided
and that the New Investment Advisory Agreement was in the best interests of
the Fund's shareholders. In approving the New Investment Advisory Agreement,
each Board noted that it anticipated reviewing the continuance of the
agreement in advance of the expiration of the initial two-year period.

Contingent BlackRock Subadvisory Agreements--Matters Considered by the Boards
At the telephonic and in-person meetings held during April and May 2006 at
which each Board of Directors discussed and approved the New Investment
Advisory Agreement, the Board, including the independent directors, also
considered and approved a contingent subadvisory agreement (each a "Contingent
Subadvisory Agreement") between the Investment Adviser and BlackRock Advisors
(the "BlackRock Subadviser"). Each Fund's Contingent Subadvisory Agreement is
intended to ensure that the Fund operates with efficient portfolio management
services until the closing of the Transaction, in the event that the Fund's
Board deems it necessary and in the best interests of the Fund and its
shareholders that the BlackRock Subadviser assist in managing the operations
of the Fund during the interim period until the closing of the Transaction.
Each Fund's Contingent Subadvisory Agreement would take effect only upon
recommendation from the Investment Adviser and upon subsequent approval of the
Fund's Board in the period up to the closing of the Transaction. The
effectiveness of each Fund's Contingent Subadvisory Agreement, therefore, is
contingent on further Board approval. Pursuant to each Contingent Subadvisory
Agreement, the BlackRock Subadviser would receive a monthly fee from the
Investment Adviser equal to 50% of the advisory fee received by the Investment
Adviser. The Investment Adviser would pay the BlackRock Subadviser out of its
own resources. There would be no increase in either Fund's expenses as a
result of the Contingent Subadvisory Agreement.

In making its approval at the May in-person meeting, each Board considered the
Contingent Subadvisory Agreement in conjunction with the New Investment
Advisory Agreement and reviewed the same information and factors discussed
above, and came to the same conclusions. Each Fund's Board also considered in
conjunction with the Contingent Subadvisory Agreement the necessity of
ensuring that the Fund operates with effective management services until the
closing of the Transaction. In reviewing the subadvisory fee rate provided in
each Fund's Contingent Subadvisory Agreement, the Fund's Board took note of
the fact that both the Investment Adviser and the BlackRock Subadviser would
have significant responsibilities under their respective advisory agreements.
The Investment Adviser would remain responsible for oversight of each Fund's
operations and administration and the BlackRock Subadviser would provide
advisory services to the Fund under the Contingent Subadvisory Agreement. Each
Fund's Board also took into account the expected short duration of the term of
any Contingent Subadvisory Agreement and the fact that total advisory fees
paid by the Fund would not increase as a result of the Contingent Subadvisory
Agreement. Under all of the circumstances, each Fund's Board concluded that it
was a reasonable allocation of fees for the BlackRock Subadviser to receive
50% of the advisory fee paid by the Fund to the Investment Adviser.

After the independent directors of each Fund deliberated in executive session,
the Fund's entire Board, including the independent directors, approved the
applicable Contingent Subadvisory Agreement, concluding that the advisory fee
was reasonable in relation to the services provided and that the Contingent
Subadvisory Agreement was in the best interests of the Fund's shareholders.



ANNUAL REPORTS                                                    JULY 31, 2006



Swap Agreements


The Funds may 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 each 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.



Dividend Policy


The Funds' dividend policy is to distribute all or a portion of their net
investment income to their shareholders on a monthly basis. In order to
provide shareholders with a more stable level of dividend distributions, the
Funds 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 particular 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
Funds for any particular month may be more or less than the amount of net
investment income earned by the Funds during such month. The Funds' 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 these reports.



Change in Funds' Independent Registered Public Accounting Firm


On August 28, 2006, Ernst & Young LLP ("E&Y") resigned as the Independent
Registered Public Accounting Firm of MuniHoldings Fund II, Inc. and
MuniHoldings New Jersey Insured Fund, Inc. (each a "Fund" and collectively the
"Funds").

E&Y's reports on the financial statements of the Funds for the past two fiscal
years did not contain an adverse opinion or a disclaimer of opinion and were
not qualified or modified as to uncertainty, audit scope or accounting
principles.

In connection with its audits for the two most recent fiscal years and through
August 28, 2006 (1) there were no disagreements with E&Y on any matter of
accounting principle or practices, financial statement disclosure or auditing
scope or procedure, whereby such disagreements, if not resolved to the
satisfaction of E&Y, would have caused them to make reference to the subject
matter of the disagreements in connection with their report on the financial
statements for such years; and (2) there have been no reportable events (as
defined in Item 304(a)(1)(v) of Regulation S-K).

The Audit Committee of each of the Funds' Board of Directors approved the
engagement of Deloitte & Touche LLP as the Funds' Independent Registered
Public Accounting Firm for the fiscal years ended July 31, 2006.


Important Tax Information


All of the net investment income distributions paid by MuniHoldings Fund II,
Inc. and MuniHoldings New Jersey Insured Fund, Inc. during the taxable year
ended July 31, 2006 qualify as tax-exempt interest dividends for federal
income tax purposes.



ANNUAL REPORTS                                                    JULY 31, 2006



Officers and Directors


                                                                                                 Number of
                                                                                                 Portfolios in  Other Public
                      Position(s)    Length of                                                   Fund Complex   Directorships
                      Held with      Time                                                        Overseen by    Held by
Name, Address & Age   Funds          Served     Principal Occupation(s) During Past 5 Years      Director       Director
                                                                                                 
Interested Director


Robert C. Doll, Jr.*  President      2005 to    President of the MLIM/FAM-advised funds since    131 Funds      None
P.O. Box 9011         and            present    2005; President and Chief Investment Officer     178 Portfolios
Princeton,            Director                  of MLIM and FAM since 2001; Co-Head (Americas
NJ 08543-9011                                   Region) thereof from 2000 to 2001 and Senior
Age: 51                                         Vice President from 1999 to 2001; President and
                                                Director of Princeton Services, Inc. ("Princeton
                                                Services") since 2001; President of Princeton
                                                Administrators, L.P. ("Princeton Administrators")
                                                since 2001; Chief Investment Officer of
                                                OppenheimerFunds, Inc. in 1999 and Executive
                                                Vice President thereof from 1991 to 1999.


 * Mr. Doll 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. Doll is an "interested person," as defined in the Investment Company Act,
   of the Fund based on his positions with MLIM, FAM, Princeton Services and
   Princeton Administrators. Directors serve until their resignation, removal or
   death, or until December 31 of the year in which they turn 72. As Fund
   President, Mr. Doll serves at the pleasure of the Boards of Directors.



ANNUAL REPORTS                                                    JULY 31, 2006



Officers and Directors (continued)


                                                                                                 Number of
                                                                                                 Portfolios in  Other Public
                        Position(s)  Length of                                                   Fund Complex   Directorships
                        Held with    Time                                                        Overseen by    Held by
Name, Address & Age     Funds        Served     Principal Occupation(s) During Past 5 Years      Director       Director
                                                                                                 
Independent Directors*


Ronald W. Forbes**      Director     1998 to    Professor Emeritus of Finance, School of         49 Funds       None
P.O. Box 9095                        present    Business, State University of New York at        51 Portfolios
Princeton,                                      Albany since 2000 and Professor thereof
NJ 08543-9095                                   from 1989 to 2000; International Consultant,
Age: 65                                         Urban Institute, Washington, D.C. from 1995
                                                to 1999.


Cynthia A. Montgomery   Director     1998 to    Professor, Harvard Business School since 1989;   49 Funds       Newell
P.O. Box 9095                        present    Associate Professor, J.L. Kellogg Graduate       51 Portfolios  Rubbermaid, Inc.
Princeton,                                      School of Management, Northwestern University                   (manufacturing)
NJ 08543-9095                                   from 1985 to 1989; Associate Professor,
Age: 54                                         Graduate School of Business Administration,
                                                University of Michigan from 1979 to 1985;
                                                Director, Harvard Business School Publishing
                                                since 2005; Director, McLean Hospital since 2005.


Jean Margo Reid         Director     2004 to    Self-employed consultant since 2001; Counsel     49 Funds       None
P.O. Box 9095                        present    of Alliance Capital Management (investment       51 Portfolios
Princeton,                                      adviser) in 2000; General Counsel, Director
NJ 08543-9095                                   and Secretary of Sanford C. Bernstein & Co.,
Age: 60                                         Inc. (investment adviser/broker-dealer) from
                                                1997 to 2000; Secretary, Sanford C. Bernstein
                                                Fund, Inc. from 1994 to 2000; Director and
                                                Secretary of SCB, Inc. since 1998; Director
                                                and Secretary of SCB Partners, Inc. since 2000;
                                                and Director of Covenant House from 2001 to 2004.


Roscoe S. Suddarth      Director     2000 to    President, Middle East Institute, from 1995      49 Funds       None
P.O. Box 9095                        present    to 2001; Foreign Service Officer, United         51 Portfolios
Princeton,                                      States Foreign Service, from 1961 to 1995
NJ 08543-9095                                   and Career Minister from 1989 to 1995; Deputy
Age: 70                                         Inspector General, U.S. Department of State,
                                                from 1991 to 1994; U.S. Ambassador to the
                                                Hashemite Kingdom of Jordan from 1987 to 1990.


Richard R. West         Director     1998 to    Professor of Finance from 1984 to 1995, Dean     49 Funds       Bowne & Co.,
P.O. Box 9095                        present    from 1984 to 1993 and since 1995 Dean            51 Portfolios  Inc. (financial
Princeton,                                      Emeritus of New York University's Leonard N.                    printers);
NJ 08543-9095                                   Stern School of Business Administration.                        Vornado Realty
Age: 68                                                                                                         Trust (real
                                                                                                                estate
                                                                                                                company);
                                                                                                                Alexander's, Inc.
                                                                                                                (real estate
                                                                                                                company)


Edward D. Zinbarg       Director     2000 to    Self-employed financial consultant since 1994;   49 Funds       None
P.O. Box 9095                        present    Executive Vice President of the Prudential       51 Portfolios
Princeton,                                      Insurance Company of America from 1988 to
NJ 08543-9095                                   1994; Former Director of Prudential Reinsurance
Age: 71                                         Company and former Trustee of the Prudential
                                                Foundation.


 * Directors serve until their resignation, removal or death, or until December 31
   of the year in which they turn 72.

** Chairman of the Boards of Directors and the Audit Committee.



ANNUAL REPORTS                                                    JULY 31, 2006



Officers and Directors (continued)


                         Position(s)  Length of
                         Held with    Time
Name, Address & Age      Funds        Served    Principal Occupation(s) During Past 5 Years
                                       

Fund Officers*


Donald C. Burke          Vice         1993 to   Managing Director of MLIM and FAM since 2006 and Treasurer thereof since 1999;
P.O. Box 9011            President    present   First Vice President of MLIM and FAM from 1997 to 2005; Senior Vice President
Princeton,               and          and       and Treasurer of Princeton Services since 1999 and Director since 2004; Vice
NJ 08543-9011            Treasurer    1999 to   President of FAM Distributors, Inc. ("FAMD") since 1999 and Director since
Age: 46                               present   2004; Vice President of MLIM and FAM from 1990 to 1997; Director of Taxation
                                                of MLIM from 1990 to 2001; Vice President, Treasurer and Secretary of the IQ
                                                Funds since 2004.


Kenneth A. Jacob         Senior       2002 to   Managing Director (Tax-Exempt Fund Management) of MLIM since 2000; Director
P.O. Box 9011            Vice         present   of MLIM from 1997 to 2000.
Princeton,               President
NJ 08543-9011
Age: 55


John M. Loffredo         Senior       2002 to   Managing Director (Tax-Exempt Fund Management) of MLIM since 2000; Director
P.O. Box 9011            Vice         present   of MLIM from 1997 to 2000.
Princeton,               President
NJ 08543-9011
Age: 42


Robert A. DiMella        Vice         1998 to   Managing Director (Tax-Exempt Fund Management) of MLIM since 2004; Director
P.O. Box 9011            President    present   of MLIM from 2002 to 2004; Vice President of MLIM from 1996 to 2001.
Princeton,
NJ 08543-9011
Age: 39


Theodore R. Jaeckel Jr.  Vice         1998 to   Managing Director (Tax-Exempt Fund Management) of MLIM since 2005; Director
P.O. Box 9011            President    present   of MLIM from 1997 to 2005; Vice President of MLIM from 1991 to 1997.
Princeton,
NJ 08543-9011
Age: 46


Jeffrey Hiller           Chief        2004 to   Chief Compliance Officer of the MLIM/FAM-advised funds and First Vice President
P.O. Box 9011            Compliance   present   and Chief Compliance Officer of MLIM (Americas Region) since 2004; Chief
Princeton,               Officer                Compliance Officer of the IQ Funds since 2004; Global Director of Compliance
NJ 08543-9011                                   at Morgan Stanley Investment Management from 2002 to 2004; Managing Director
Age: 54                                         and 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; Senior Counsel
                                                in the Securities and Exchange Commission's Division of Enforcement in
                                                Washington, D.C. from 1990 to 1995.


Alice A. Pellegrino      Secretary    2004 to   Director (Legal Advisory) of MLIM since 2002; Vice President of MLIM from 1999
P.O. Box 9011                         present   to 2002; Attorney associated with MLIM since 1997; Secretary of MLIM, FAM, FAMD
Princeton,                                      and Princeton Services since 2004.
NJ 08543-9011
Age: 46


* Officers of the Funds serve at the pleasure of the Boards 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



ANNUAL REPORTS                                                    JULY 31, 2006



Officers and Directors (concluded)


Effective January 1, 2007, Edward D. Zinbarg retired as a Director of
MuniHoldings Fund II, Inc. and MuniHoldings New Jersey Insured Fund, Inc.
The Funds' Boards of Directors wish Mr. Zinbarg well in his retirement.


Effective April 13, 2007, Jeffrey Hiller resigned his position as Chief
Compliance Officer of the Funds. Also effective April 13, 2007, Karen Clark was
appointed Chief Compliance Officer of the Funds. Ms. Clark has been a Managing
Director of BlackRock, Inc. since 2007. She was a Director thereof from 2005 to
2007. Prior to that, Ms. Clark was a principal and senior compliance officer at
State Street Global Advisors from 2001 to 2005. Ms. Clark was a principal
consultant with PricewaterhouseCoopers, LLP from 1998 to 2001. From 1993 to
1998, Ms. Clark was Branch Chief, Division of Investment Management and Office
of Compliance Inspections and Examinations, with the U.S. Securities and
Exchange Commission.



Investment Objectives


NYSE Symbol   MuniHoldings Fund II, Inc. seeks to provide shareholders with
MUH           current income exempt from federal income taxes by investing
              primarily in a portfolio of long-term, investment grade municipal
              obligations the interest on which, in the opinion of the bond
              counsel to the issuer, is exempt from federal income taxes.


NYSE Symbol   MuniHoldings New Jersey Insured Fund, Inc. seeks to provide
MUJ           shareholders with current income exempt from federal income tax
              and New Jersey personal income taxes by investing in a portfolio
              of long-term, investment grade municipal obligations the interest
              on which, in the opinion of bond counsel to the issuer, is exempt
              from federal income tax and New Jersey personal income taxes.



Availability of Quarterly Schedule of Investments


The Funds file their complete schedules 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 Funds' Forms N-Q are available on the
SEC's Web site at http://www.sec.gov. The Funds' 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 Funds offer electronic delivery of communications to their 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 at 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.



ANNUAL REPORTS                                                    JULY 31, 2006



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 at www.blackrock.com.

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)
           Ronald W. Forbes, (2) Richard R. West, and (3) Edward D. Zinbarg
           (retired as of December 31, 2006).

Item 4 -   Principal Accountant Fees and Services
           Note: The Fund changed auditors effective August, 28, 2006.  Prior
           to that date, Ernst & Young LLP provided services as the Fund's
           independent registered public accountant.

           (a) Audit Fees -     Fiscal Year Ending July 31, 2006 - $28,000
                                Fiscal Year Ending July 31, 2005 - $32,000

           (b) Audit-Related Fees -
                                Fiscal Year Ending July 31, 2006 - $3,500
                                Fiscal Year Ending July 31, 2005 - $3,500

           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 July 31, 2006 - $6,000
                                Fiscal Year Ending July 31, 2005 - $5,700

           The nature of the services include tax compliance, tax advice and
           tax planning.

           (d) All Other Fees - Fiscal Year Ending July 31, 2006 - $0
                                Fiscal Year Ending July 31, 2005 - $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 July 31, 2006 - $2,186,750
               Fiscal Year Ending July 31, 2005 - $7,926,666

           (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) - $1,409,500, 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)):

           Ronald W. Forbes
           Cynthia A. Montgomery
           Jean Margo Reid
           Roscoe S. Suddarth
           Richard R. West
           Edward D. Zinbarg (retired as of December 31, 2006)

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 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:

*  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.

*  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.

*  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.

*  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.

*  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.

*  Routine proposals related to requests regarding the formalities of
   corporate meetings.

*  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.

*  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 -   Portfolio Managers of Closed-End Management Investment Companies -
           as of July 31, 2006.

           (a)(1) Mr. Theodore R. Jaeckel, Jr. is primarily responsible for
                  the day-to-day management of the registrant's portfolio
                  ("Portfolio Manager").  Mr. Jaeckel has been a Managing
                  Director of MLIM since 2005. He was a Director of MLIM from
                  1997 to 2005. Mr. Jaeckel has been a portfolio manager with
                  the Investment Adviser and MLIM since 1991 and has been a
                  Vice President and portfolio manager of the Fund since 1997.

           (a)(2) As of July 31, 2006:




                                                                         (iii) Number of Other Accounts and
                  (ii) Number of Other Accounts Managed                   Assets for Which Advisory Fee is
                        and Assets by Account Type                               Performance-Based

                           Other                                             Other
     (i) Name of         Registered       Other Pooled                     Registered      Other Pooled
     Portfolio           Investment        Investment       Other          Investment       Investment       Other
     Manager             Companies          Vehicles       Accounts        Companies         Vehicles       Accounts
                                                                                          
     Theodore R.
     Jaeckel, Jr.                   8              1              0                0                 1             0
                      $ 2,183,789,807    $  23,221,741      $     0          $     0     $  23,221,741       $     0

            (iv) Potential Material Conflicts of Interest


       Real, potential or apparent conflicts of interest may arise when a
portfolio manager has day-to-day portfolio management responsibilities with
respect to more than one fund or account, including the following:

       Certain investments may be appropriate for the Fund and also for other
clients advised by the Investment. Adviser and its affiliates, including other
client accounts managed by the Fund's portfolio management team. Investment
decisions for the Fund and other clients are made with a view to achieving
their respective investment objectives and after consideration of such factors
as their current holdings, availability of cash for investment and the size of
their investments generally. Frequently, a particular security may be bought or
sold for only one client or in different amounts and at different times for
more than one but less than all clients. Likewise, because clients of the
Investment Adviser and its affiliates may have differing investment strategies,
a particular security may be bought for one or more clients when one or more
other clients are selling the security. The investment results for the Fund may
differ from the results achieved by other clients of the Investment Adviser and
its affiliates and results among clients may differ. In addition, purchases or
sales of the same security may be made for two or more clients on the same day.
In such event, such transactions will be allocated among the clients in a
manner believed by the Investment Adviser and its affiliates to be equitable to
each. The Investment Adviser will not determine allocations based on whether it
receives a performance based fee from the client. In some cases, the allocation
procedure could have an adverse effect on the price or amount of the securities
purchased or sold by the Fund. Purchase and sale orders for the Fund may be
combined with those of other clients of the Investment Adviser and its
affiliates in the interest of achieving the most favorable net results to the
Fund.

       To the extent that the Fund's portfolio management team has
responsibilities for managing accounts in addition to the Fund, a portfolio
manager will need to divide his time and attention among relevant accounts.

       In some cases, a real, potential or apparent conflict may also arise
where (i) the Investment Adviser may have an incentive, such as a performance
based fee, in managing one account and not with respect to other accounts it
manages or (ii) where a member of the Fund's portfolio management team owns an
interest in one fund or account he or she manages and not another.

       (a)(3) As of July 31, 2006:

       Portfolio Manager Compensation

       The Portfolio Manager Compensation Program of MLIM and its affiliates,
including the Investment Adviser, is critical to MLIM's ability to attract and
retain the most talented asset management professionals.   This program ensures
that compensation is aligned with maximizing investment returns and it provides
a competitive pay opportunity for competitive performance.

       Compensation Program

       The elements of total compensation for MLIM and its affiliates portfolio
managers are a fixed base salary, annual performance-based cash and stock
compensation (cash and stock bonus) and other benefits. MLIM has balanced these
components of pay to provide portfolio managers with a powerful incentive to
achieve consistently superior investment performance. By design, portfolio
manager compensation levels fluctuate--both up and down--with the relative
investment performance of the portfolios that they manage.

       Base Salary

       Under the MLIM approach, like that of many asset management firms, base
salaries represent a relatively small portion of a portfolio manager's total
compensation. This approach serves to enhance the motivational value of the
performance-based (and therefore variable) compensation elements of the
compensation program.

       Performance-Based Compensation

       MLIM believes that the best interests of investors are served by
recruiting and retaining exceptional asset management talent and managing their
compensation within a consistent and disciplined framework that emphasizes pay
for performance in the context of an intensely competitive market for talent.
To that end, MLIM and its affiliates portfolio manager incentive compensation
is based on a formulaic compensation program. MLIM's formulaic portfolio
manager compensation program includes: investment performance relative to a
subset of general closed-end, New Jersey municipal debt funds over 1-, 3- and
5-year performance periods and a measure of operational efficiency. Portfolio
managers are compensated based on the pre-tax performance of the products they
manage. If a portfolio manager's tenure is less than 5 years, performance
periods will reflect time in position. Portfolio managers are compensated based
on products they manage. A discretionary element of portfolio manager
compensation may include consideration of: financial results, expense control,
profit margins, strategic planning and implementation, quality of client
service, market share, corporate reputation, capital allocation, compliance and
risk control, leadership, workforce diversity, supervision, technology and
innovation. MLIM and its affiliates also consider the extent to which
individuals exemplify and foster ML & Co.'s principles of client focus, respect
for the individual, teamwork, responsible citizenship and integrity. All
factors are considered collectively by MLIM management.

       Cash Bonus

       Performance-based compensation is distributed to portfolio managers in a
combination of cash and stock. Typically, the cash bonus, when combined with
base salary, represents more than 60% of total compensation for portfolio
managers.

       Stock Bonus

       A portion of the dollar value of the total annual performance-based
bonus is paid in restricted shares of ML & Co. stock. Paying a portion of
annual bonuses in stock puts compensation earned by a portfolio manager for a
given year "at risk" based on the company's ability to sustain and improve its
performance over future periods. The ultimate value of stock bonuses is
dependent on future ML & Co. stock price performance. As such, the stock bonus
aligns each portfolio manager's financial interests with those of the ML & Co.
shareholders and encourages a balance between short-term goals and long-term
strategic objectives. Management strongly believes that providing a significant
portion of competitive performance-based compensation in stock is in the best
interests of investors and shareholders. This approach ensures that portfolio
managers participate as shareholders in both the "downside risk" and "upside
opportunity" of the company's performance. Portfolio managers therefore have a
direct incentive to protect ML & Co.'s reputation for integrity.

       Other Compensation Programs

       Portfolio managers who meet relative investment performance and
financial management objectives during a performance year are eligible to
participate in a deferred cash program. Awards under this program are in the
form of deferred cash that may be benchmarked to a menu of MLIM mutual funds
(including their own fund) during a five-year vesting period. The deferred cash
program aligns the interests of participating portfolio managers with the
investment results of MLIM products and promotes continuity of successful
portfolio management teams.

       Other Benefits

       Portfolio managers are also eligible to participate in broad-based plans
offered generally to employees of ML & Co. and its affiliates, including broad-
based retirement, 401(k), health, and other employee benefit plans.

       (a)(4) Beneficial Ownership of Securities.      As of July 31, 2006,
               Mr. Jaeckel does not beneficially own any stock issued by the
               Fund.

Item 9 -   Purchases of Equity Securities by Closed-End Management Investment
           Company and Affiliated Purchasers - Not Applicable

Item 10 -  Submission of Matters to a Vote of Security Holders - Not Applicable

Item 11 -  Controls and Procedures

11(a) -    The Registrant's principal executive and principal financial
           officers have evaluated the Registrant's disclosure controls and
           procedures, including internal control over financial reporting,
           within 90 days of this filing.  Such principal officers have
           concluded that as of May 18, 2007, the Registrant's disclosure
           controls and procedures were effective in design and operation to
           reasonably ensure that information required to be disclosed by the
           Registrant in this Form N-CSR/A was recorded, processed, summarized,
           and reported within the required time periods, and were sufficient
           to form the basis of the certifications required by Rule 30a-(2) of
           the Investment Company Act of 1940, as amended.  Prior to reaching
           that conclusion, such principal officers had become aware of matters
           relating to the Registrant's participation in certain inverse
           floater structures that necessitated restatement of financial
           information included in Item 1 of this filing.  As a result,
           management of the Registrant had reevaluated certain disclosure
           controls and procedures determined not to be effective, as discussed
           more fully below.

           Management of the Registrant is responsible for establishing and
           maintaining effective internal control over financial reporting.  In
           fulfilling this responsibility, estimates and judgments by
           management are required to assess the expected benefits and related
           costs of controls.  The Registrant's internal control over financial
           reporting is a process designed to provide reasonable assurance
           regarding the reliability of financial reporting and the preparation
           of financial statements for external purposes in accordance with
           U.S. generally accepted accounting principles.  Such internal
           control includes policies and procedures that provide reasonable
           assurance regarding prevention or timely detection of unauthorized
           acquisition, use or disposition of a registrant's assets that could
           have a material effect on the financial statements.

           Because of its inherent limitations, internal control over financial
           reporting may not prevent or detect misstatements.  Also,
           projections of any evaluation of effectiveness to future periods are
           subject to the risk that controls may become inadequate because of
           changes in conditions, or that the degree of compliance with the
           policies or procedures may deteriorate.

           A control deficiency exists when the design or operation of a
           control does not allow management or employees, in the normal course
           of performing their assigned functions, to prevent or detect
           misstatements on a timely basis.  A significant deficiency is a
           control deficiency, or combination of control deficiencies, that
           adversely affects the Registrant's ability to initiate, authorize,
           record, process or report financial data reliably in accordance with
           generally accepted accounting principles such that there is more
           than a remote likelihood that a misstatement of the Registrant's
           annual or interim financial statements that is more than
           inconsequential will not be prevented or detected.  A material
           weakness is a significant deficiency, or combination of significant
           deficiencies, that results in more than a remote likelihood that a
           material misstatement of the annual or interim financial statements
           will not be prevented or detected.

           Subsequent to the initial filing of the Registrant's Form N-CSR,
           the Registrant identified the following control deficiency, that was
           determined to be a material weakness, as defined above, in the
           Registrant's internal control over financial reporting at July 31,
           2006.  The Registrant's controls related to the review and analysis
           of relevant terms and conditions of transfers of certain assets
           pertaining to inverse floater structures were not operating
           effectively to appropriately determine whether the transfers of
           assets qualified for sale accounting under the provisions of
           Statement of Financial Accounting Standards No. 140, "Accounting for
           Transfers and Servicing of Financial Assets and Extinguishments of
           Liabilities" ("SFAS 140").  As a result, these controls did not
           detect that certain transfers were not appropriately recorded as
           borrowings. Accordingly, the Registrant's financial statements as of
           and for the period ended July 31, 2006, including prior periods
           where applicable, were restated to appropriately reflect transfers
           of such securities as secured borrowings and to report the related
           income and expense.  The restatement had no impact on net assets,
           net asset value per share or total return.

           Subsequent to July 31, 2006, but prior to the evaluation of the
           design and operation of the Registrant's disclosure controls and
           procedures at May 18, 2007, the Registrant's disclosure controls and
           procedures were modified to enhance the review and analysis of the
           relevant terms and conditions of transfers of securities in
           connection with inverse floater structures in light of SFAS 140.

11(b) -    There have been no changes in the Registrant's internal control over
           financial reporting (as defined in Rule 30a-3(d) under the
           Investment Company Act of 1940, as amended) that occurred during the
           second half of the Registrant's fiscal year that have materially
           affected, or are reasonably likely to materially affect, the
           Registrant's internal control over financial reporting.  However, as
           discussed above, subsequent to July 31, 2006, the Registrant has
           enhanced controls related to the application of SFAS 140.

Item 12 -  Exhibits attached hereto

12(a)(1) - Code of Ethics - See Item 2

12(a)(2) - Certifications - Attached hereto

12(a)(3) - Not Applicable

12(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.


BlackRock MuniHoldings New Jersey Insured Fund, Inc.


By:    /s/ Robert C. Doll, Jr.
       -----------------------
       Robert C. Doll, Jr.,
       Chief Executive Officer of
       BlackRock MuniHoldings New Jersey Insured Fund, Inc.


Date: June 7, 2007


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.,
       Chief Executive Officer of
       BlackRock MuniHoldings New Jersey Insured Fund, Inc.


Date: June 7, 2007


By:    /s/ Donald C. Burke
       -------------------
       Donald C. Burke,
       Chief Financial Officer of
       BlackRock MuniHoldings New Jersey Insured Fund, Inc.


Date: June 7, 2007