UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF
REGISTERED MANAGEMENT INVESTMENT COMPANY
Investment Company Act file number: 811-7810
Exact name of registrant as Delaware Investments
specified in charter: Colorado Insured
Municipal Income Fund, Inc.
Address of principal executive offices: 2005 Market Street
Philadelphia, PA 19103
Name and address of agent for service: David F. Connor, Esq.
2005 Market Street
Philadelphia, PA 19103
Registrant's telephone number, including area code: (800) 523-1918
Date of fiscal year end: March 31
Date of reporting period: December 31, 2006
Item 1. Schedule of Investments.
Schedule of Investments (Unaudited)
Delaware Investments Colorado Insured Municipal Income Fund, Inc.
_________________________________________________________________
December 31, 2006
Principal Market
Amount Value
Municipal Bonds - 152.40%
Education Revenue Bonds - 29.79%
Boulder County Development Revenue (University Corporation for Atmospheric Research) 5.00% 9/1/26 (MBIA) $4,500,000 $4,675,230
Colorado Educational & Cultural Facilities Authority
(Johnson & Wales University Project) Series A 5.00% 4/1/28 (XLCA) 3,000,000 3,138,210
(Littleton School Project) 4.375% 1/15/36 (CIFG) 1,200,000 1,178,664
(University of Colorado Foundation Project) 5.00% 7/1/27 (AMBAC) 4,000,000 4,195,920
(University of Northern Colorado) Series A 5.00% 7/1/31 (MBIA) 2,500,000 2,590,150
Colorado State Board of Governors (Colorado University) Series B 5.00% 3/1/35 (AMBAC) 1,800,000 1,894,464
University of Northern Colorado Revenue Refunding 5.00% 6/1/35 (FSA) 4,000,000 4,240,920
_________
21,913,558
__________
Electric Revenue Bonds - 1.48%
Arkansas River Power Authority Colorado Power Revenue Improvement 5.25% 10/1/32 (XLCA) 1,000,000 1,087,860
_________
1,087,860
_________
Health Care Revenue Bonds - 5.34%
Colorado Health Facilities Authority Revenue
(North Colorado Medical Center) 5.95% 5/15/12 (MBIA) 1,250,000 1,262,388
(Porter Place) Series A 6.00% 1/20/36 (GNMA) 2,515,000 2,667,585
_________
3,929,973
_________
Lease Revenue Bonds - 10.93%
Broomfield City & County Certificates of Participation 5.75% 12/1/24 (AMBAC) 1,500,000 1,580,985
Colorado Educational & Cultural Facilities Authority (Bromley School Project) 5.25% 9/15/32 (XLCA) 1,000,000 1,080,040
Denver Convention Center Series A 5.00% 12/1/35 (XLCA) 2,000,000 2,121,960
Glendale Certificates Participation 5.00% 12/1/25 (XLCA) 1,500,000 1,607,205
Westminster Building Authority Certificates of Participation 5.25% 12/1/22 (MBIA) 1,555,000 1,648,860
_________
8,039,050
_________
Local General Obligation Bonds - 14.51%
Adams & Arapahoe Counties Joint School District #28J (Aurora) Series A 5.25% 12/1/25 (MBIA) 2,000,000 2,195,300
Adams County Colorado School District #14 5.125% 12/1/31 (FSA) 500,000 541,760
Arapahoe County Water & Wastewater Public Improvement District Refunding Series A 5.125% 12/1/32 (MBIA) 1,000,000 1,059,310
Bowles Metropolitan District 5.00% 12/1/33 (FSA) 2,000,000 2,109,920
Centennial Downs Metropolitan District 5.00% 12/1/28 (AMBAC) 1,000,000 1,060,670
Douglas County School District #Re-1 (Douglas & Elbert Counties) 5.00% 12/15/21 (MBIA) 1,000,000 1,052,160
Garfield County School District #Re-2 5.00% 12/1/25 (FSA) 1,000,000 1,078,230
Green Valley Ranch Metropolitan District 5.75% 12/1/19 (AMBAC) 1,000,000 1,055,260
Sand Creek Metropolitan District Refunding & Improvement 5.00% 12/1/31 (XLCA) 500,000 524,255
_________
10,676,865
__________
$ Pre-Refunded Bonds - 55.99%
Auraria Higher Education Center Parking Facilities System Revenue 5.50% 4/1/26-10 (AMBAC) 2,485,000 2,625,154
Aurora Certificates of Participation 5.50% 12/1/30-10 (AMBAC) 2,000,000 2,130,620
Burlingame Multifamily Housing Revenue Series A 6.00% 11/1/29-09 (MBIA) 2,290,000 2,459,231
City of Colorado Springs (Colorado Springs College Project) 5.375% 6/1/32-09 (MBIA) 5,000,000 5,255,200
Colorado Educational & Cultural Facilities Authority (University of Denver Project)
5.50% 3/1/21-11 (AMBAC) 3,200,000 3,427,648
Series B 5.25% 3/1/35-16 (FGIC) 1,500,000 1,632,480
Colorado Water Resources & Power Development Authority Revenue Series A 5.80% 11/1/20-10 (FGIC) 1,220,000 1,313,330
Denver City & County Excise Tax Revenue (Colorado Convention Center Project) Series A
5.00% 9/1/20-11 (FSA) 6,500,000 6,837,740
Denver Convention Center Series A 5.00% 12/1/33-13 (XLCA) 3,000,000 3,235,200
E-470 Public Highway Authority Series A
5.75% 9/1/29-10 (MBIA) 3,000,000 3,262,170
5.75% 9/1/35-10 (MBIA) 1,700,000 1,848,563
Eagle County Certificates of Participation 5.40% 12/1/18-09 (MBIA) 1,000,000 1,059,200
Garfield Pitkin & Eagle County School District #Re-1 Series A (Roaring Fork County)
Series A 5.00% 12/15/27-14 (FSA) 1,500,000 1,592,460
Lakewood Certificates of Participation 5.375% 12/1/22-10 (AMBAC) 2,000,000 2,125,340
Pueblo County (Library District Project) 5.80% 11/1/19-09 (AMBAC) 1,395,000 1,478,393
Weld & Adams Counties School District #Re-3J 5.00% 12/15/24-14 (FSA) 830,000 904,102
_______
41,186,831
__________
Special Tax Revenue Bonds - 5.52%
Broomfield County Sales & Use Tax Revenue Refunding & Improvement Series A 5.00% 12/1/31 (AMBAC) 650,000 683,956
Golden Sales & Use Tax Revenue Improvement Series B 5.10% 12/1/20 (AMBAC) 1,000,000 1,056,960
Gypsum Sales Tax & General Funding Revenue 5.25% 6/1/30 (Assured Gty) 1,000,000 1,085,250
Regional Transportation District Sales Tax Revenue (Fastracks Project) Series A 4.375% 11/1/31 (AMBAC) 1,250,000 1,231,300
_________
4,057,466
_________
Transportation Revenue Bonds - 17.88%
Denver City & County Airport Revenue
Series A 5.00% 11/15/25 (FGIC) 1,000,000 1,069,520
Series E 5.25% 11/15/23 (MBIA) 7,500,000 7,662,600
Northwest Parkway Public Highway Authority Series A 5.25% 6/15/41 (FSA) 4,150,000 4,424,398
_________
13,156,518
__________
Water & Sewer Revenue Bonds - 10.96%
Colorado Water Resources & Power Development Authority Small Revenue Series A 5.80% 11/1/20 (FGIC) 780,000 836,488
Colorado Water Resources & Power Development Authority Water Resources Revenue
(Parker Water & Sanitation District) Series D
5.125% 9/1/34 (MBIA) 1,500,000 1,598,010
5.25% 9/1/43 (MBIA) 2,000,000 2,150,660
Lafayette Water Revenue Series A 5.00% 12/1/27 (MBIA) 1,100,000 1,163,855
Ute Utility Water Conservancy District Revenue 5.75% 6/15/20 (MBIA) 2,155,000 2,312,228
_________
8,061,241
_________
Total Municipal Bonds (cost $106,202,125) 112,109,362
___________
Short-Term Investments - 0.01%
~ Variable Rate Demand Notes - 0.01%
Moffat County Pollution Control Revenue Colorado Ute 4.00% 7/1/10 5,000 5,000
_____
Total Short-Term Investments (cost $5,000) 5,000
_____
Total Market Value of Securities - 152.41%
(cost $106,207,125) 112,114,362
Receivables and Other Assets Net of Liabilities (See Notes) - 1.97% 1,447,138
Liquidation Value of Preferred Stock - (54.38%) (40,000,000)
___________
Net Assets Applicable to 4,837,100 Shares Outstanding - 100.00% $73,561,500
___________
$ Pre-Refunded Bonds. Municipals that are generally backed or secured by U.S. Treasury bonds. For Pre-Refunded Bonds, the stated
maturity is followed by the year in which the bond is pre-refunded. See Note 3 in "Notes."
~ Variable rate security. The rate shown is the rate as of December 31, 2006.
Summary of Abbreviations:
AMBAC - Insured by the AMBAC Assurance Corporation
Assured Gty - Insured by the Assured Guaranty Corporation
CIFG - CDC IXIS Financial Guaranty
FGIC - Insured by the Financial Guaranty Insurance Company
FSA - Insured by Financial Security Assurance
GNMA - Insured by Government National Mortgage Association
MBIA - Insured by the Municipal Bond Insurance Association
XLCA - Insured by XL Capital Assurance
________________________________________________________________________________
Notes
1. Significant Accounting Policies
The following accounting policies are in accordance with U.S. generally accepted
accounting principles and are consistently followed by Delaware Investments
Colorado Insured Municipal Income Fund, Inc. (the "Fund").
Security Valuation - Long-term debt securities are valued by an independent
pricing service and such prices are believed to reflect the fair value of such
securities. Short-term debt securities having less than 60 days to maturity are
valued at amortized cost, which approximates market value. Other securities and
assets for which market quotations are not readily available are valued at fair
value as determined in good faith under the direction of the Fund's Board of
Directors. In determining whether market quotations are readily available or
fair valuation will be used, various factors will be taken into consideration,
such as market closures, aftermarket trading or significant events after local
market trading (e.g., government actions or pronouncements, trading volume or
volatility on markets, exchanges among dealers, or news events).
In September 2006, the Financial Accounting Standards Board (FASB) issued FASB
Statement No. 157, Fair Value Measurements, (Statement 157). Statement 157
establishes a framework for measuring fair value in generally accepted
accounting principles, clarifies the definition of fair value within that
framework, and expands disclosures about the use of fair value measurements.
Statement 157 is intended to increase consistency and comparability among fair
value estimates used in financial reporting. Statement 157 is effective for
fiscal years beginning after November 15, 2007. Management does not expect the
adoption of Statement 157 to have an impact on the amounts reported in the
financial statements.
Federal Income Taxes - The Fund intends to continue to qualify for federal
income tax purposes as a regulated investment company and make the requisite
distributions to shareholders. Accordingly, no provision for federal income
taxes has been made in the financial statements.
On July 13, 2006, FASB released FASB Interpretation No. 48 "Accounting for
Uncertainty in Income Taxes" (FIN 48). FIN 48 provides guidance for how
uncertain tax positions should be recognized, measured, presented, and disclosed
in the financial statements. FIN 48 requires the evaluation of tax positions
taken or expected to be taken in the course of preparing the Fund's tax returns
to determine whether the tax positions are "more-likely-than-not" of being
sustained by the applicable tax authority. Tax positions not deemed to meet the
more-likely-than-not threshold would be recorded as a tax benefit or expense in
the current year. Adoption of FIN 48 is required for fiscal years beginning
after December 15, 2006 and is to be applied to all open tax years as of the
effective date. Recent SEC guidance allows implementing FIN 48 in Fund NAV
calculations as late as the Fund's last NAV calculation in the first required
financial statement reporting period. As a result, the Fund will incorporate FIN
48 in its semi annual report on September 30, 2007. Although the Fund's tax
positions are currently being evaluated, management does not expect the adoption
of FIN 48 to have a material impact on the Fund's financial statements.
Use of Estimates - The preparation of financial statements in conformity with
U.S. generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.
Other - Expenses directly attributable to the Fund are charged directly to the
Fund. Other expenses common to various funds within the Delaware Investments(R)
Family of Funds are generally allocated amongst such funds on the basis of
average net assets. Management fees and some other expenses are paid monthly.
Security transactions are recorded on the date the securities are purchased or
sold (trade date) for financial reporting purposes. Costs used in calculating
realized gains and losses on the sale of investment securities are those of the
specific securities sold. Interest income is recorded on the accrual basis.
Discounts and premiums are amortized to interest income over the lives of the
respective securities. The Fund declares and pays dividends from net investment
income monthly and distributions from net realized gain on investments, if any,
at least annually. In addition, in order to satisfy certain distribution
requirements of the Tax Reform Act of 1986, the Fund may declare special
year-end dividend and capital gains distributions during November or December to
shareholders of record on a date in such month. Such distributions, if received
by shareholders by January 31, are deemed to have been paid by the Fund and
received by shareholders on the earlier of the date paid or December 31 of the
prior year.
2. Investments
At December 31, 2006, the cost of investments for federal income tax purposes
has been estimated since the final tax characteristics cannot be determined
until fiscal year end. At December 31, 2006, the cost of investments and
unrealized appreciation (depreciation) for the Portfolio were as follows:
Cost of investments $106,208,220
____________
Aggregate unrealized appreciation 5,916,462
Aggregate unrealized depreciation (10,320)
____________
Net unrealized appreciation $ 5,906,142
____________
3. Credit and Market Risk
The Fund uses leverage in the form of preferred shares. Leveraging may result in
a higher degree of volatility because the Fund's net asset value could be more
sensitive to fluctuations in short-term interest rates and changes in market
value of portfolio securities attributable to the leverage.
The Fund concentrates its investments in securities issued by municipalities.
The value of these investments may be adversely affected by new legislation
within the state, regional or local economic conditions, and differing levels of
supply and demand for municipal bonds. Many municipalities insure repayment for
their obligations. Although bond insurance reduces the risk of loss due to
default by an issuer, such bonds remain subject to the risk that market value
may fluctuate for other reasons and there is no assurance that the insurance
company will meet its obligations. These securities have been identified in the
Schedule of Investments.
The Fund may participate in inverse floater programs where it transfers its own
bonds to a trust that issues floating rate securities and inverse floating rate
securities ("inverse floaters") with an aggregate principal amount equal to the
principal of the transferred bonds. The inverse floaters received by the Fund
are derivative tax-exempt obligations with floating or variable interest rates
that move in the opposite direction of short-term interest rates, usually at an
accelerated speed. Consequently, the market values of the inverse floaters will
generally be more volatile than other tax-exempt investments. The Fund typically
uses inverse floaters to adjust the duration of its portfolio. Duration measures
a portfolio's sensitivity to changes in interest rates. By holding inverse
floaters with a different duration than the underlying bonds that the Fund
transferred to the trust, the Fund seeks to adjust its portfolio's sensitivity
to changes in interest rates. The Fund may also invest in inverse floaters to
add additional income to the Fund or to adjust the Fund's exposure to a specific
segment of the yield curve. Such securities are identified on the Schedule of
Investments.
The Fund may invest in advanced refunded bonds, escrow secured bonds or defeased
bonds. Under current federal tax laws and regulations, state and local
government borrowers are permitted to refinance outstanding bonds by issuing new
bonds. The issuer refinances the outstanding debt to either reduce interest
costs or to remove or alter restrictive covenants imposed by the bonds being
refinanced. A refunding transaction where the municipal securities are being
refunded within 90 days from the issuance of the refunding issue is known as a
"current refunding". "Advance refunded bonds" are bonds in which the refunded
bond issue remains outstanding for more than 90 days following the issuance of
the refunding issue. In an advance refunding, the issuer will use the proceeds
of a new bond issue to purchase high grade interest bearing debt securities
which are then deposited in an irrevocable escrow account held by an escrow
agent to secure all future payments of principal and interest and bond premium
of the advance refunded bond. Bonds are "escrowed to maturity" when the proceeds
of the refunding issue are deposited in an escrow account for investment
sufficient to pay all of the principal and interest on the original interest
payment and maturity dates.
Bonds are considered "pre-refunded" when the refunding issue's proceeds are
escrowed only until a permitted call date or dates on the refunded issue with
the refunded issue being redeemed at the time, including any required premium.
Bonds become "defeased" when the rights and interests of the bondholders and of
their lien on the pledged revenues or other security under the terms of the bond
contract are substituted with an alternative source of
revenues (the escrow securities) sufficient to meet payments of principal and
interest to maturity or to the first call dates. Escrowed secured bonds will
often receive a rating of AAA from Moody's Investors Service, Inc., Standard &
Poor's Ratings Group, and/or Fitch Ratings due to the strong credit quality of
the escrow securities and the irrevocable nature of the escrow deposit
agreement.
The Fund may invest up to 15% of its total assets in illiquid securities, which
may include securities with contractual restrictions on resale, securities
exempt from registration under Rule 144A of the Securities Act of 1933, as
amended, and other securities which may not be readily marketable. The relative
illiquidity of these securities may impair the Fund from disposing of them in a
timely manner and at a fair price when it is necessary or desirable to do so.
While maintaining oversight, the Fund's Board of Trustees/Directors has
delegated to Delaware Management Company, a series of Delaware Management
Business Trust, the day-to-day functions of determining whether individual
securities are liquid for purposes of the Fund's limitation on investments in
illiquid assets. At December 31, 2006, there were no Rule 144A securities and no
securities have been determined to be illiquid under the Fund's Liquidity
Procedures.
Item 2. Controls and Procedures.
(a) The registrant's principal executive officer and principal financial
officer have evaluated the registrant's disclosure controls and procedures
within 90 days of the filing of this report and have concluded that they are
effective in providing reasonable assurance that the information required to be
disclosed by the registrant in its reports or statements filed under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported
within the time periods specified in the rules and forms of the Securities and
Exchange Commission.
There were no significant changes in the registrant's internal control
over financial reporting that occurred during the registrant's last fiscal
quarter that have materially affected, or are reasonably likely to materially
affect, the registrant's internal control over financial reporting.
(b) Management has made changes that have materially affected, or are
reasonably like to materially affect, registrant's internal controls over
financial reporting. To seek to increase the controls' effectiveness, these
changes provide for enhanced review of contracts relating to complex
transactions and the applicability of generally accepted accounting principles
to such transactions, including enhanced consultation with registrant's
independent public accountants in connection with such reviews.
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.
Item 3. Exhibits.
File as exhibits as part of this Form a separate certification for each
principal executive officer and principal financial officer of the registrant as
required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2(a)), exactly as set
forth below: