UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-Q QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY Investment Company Act File number 811-9191 Name of Fund: BlackRock MuniHoldings Insured Fund II, Inc. Fund Address: P.O. Box 9011 Princeton, NJ 08543-9011 Name and address of agent for service: Robert C. Doll, Jr., Chief Executive Officer, BlackRock MuniHoldings Insured Fund II, Inc., 800 Scudders Mill Road, Plainsboro, NJ, 08536. Mailing address: P.O. Box 9011, Princeton, NJ, 08543-9011 Registrant's telephone number, including area code: (609) 282-2800 Date of fiscal year end: 03/31/2007 Date of reporting period: 10/01/06 - 12/31/06 Item 1 - Schedule of Investments BlackRock MuniHoldings Insured Fund II, Inc. Schedule of Investments as of December 31, 2006 (in Thousands) Face State Amount Municipal Bonds Value Alabama - 2.9% $ 3,580 Jefferson County, Alabama, Limited Obligation School Warrants, Series A, 5.50% due 1/01/2022 $ 3,908 5,000 Mobile, Alabama, GO, Refunding, 5.25% due 8/15/2020 (a) 5,367 Alaska - 1.3% 2,000 Anchorage, Alaska, Water Revenue Refunding Bonds, 6% due 9/01/2024 (a) 2,132 1,700 Matanuska-Susitna Boro, Alaska, GO, Series A, 6% due 3/01/2010 (i)(j) 1,818 California - 30.9% 230 California State, GO, 5.50% due 4/01/2014 (j) 258 1,870 California State, GO, 5.50% due 4/01/2028 2,094 2,935 California State, Various Purpose, GO, 5.25% due 12/01/2022 (f) 3,174 9,350 California State, Veterans, GO, Refunding, AMT, Series BZ, 5.35% due 12/01/2021 (i) 9,462 2,405 Dixon, California, Unified School District, GO (Election of 2002), 5.20% due 8/01/2044 (f) 2,528 2,185 East Side Union High School District, California, Santa Clara County, GO (Election of 2002), Series D, 5% due 8/01/2020 (n) 2,349 8,460 East Side Union High School District, California, Santa Clara County, GO (Election of 2002), Series D, 5% due 8/01/2029 (n) 8,950 3,400 Los Angeles, California, Unified School District, GO (Election of 1997), Series F, 5% due 7/01/2013 (c)(j) 3,587 12,155 Los Angeles, California, Unified School District, GO, Series A, 5% due 7/01/2013 (i)(j) 12,824 4,240 Modesto, California, Schools Infrastructure Financing Agency, Special Tax Bonds, 5.50% due 9/01/2036 (a) 4,651 5,000 Port of Oakland, California, Revenue Refunding Bonds, AMT, Series L, 5.375% due 11/01/2027 (c) 5,347 2,985 Roseville, California, Joint Union High School District, GO (Election of 2004), Series A, 5% due 8/01/2029 (c) 3,155 2,130 Sacramento, California, City Financing Authority, Capital Improvement Revenue Bonds (911 Call Center and Other Municipal Projects), 5% due 12/01/2027 (a) 2,274 1,480 San Diego, California, Community College District, GO (Election of 2002), 5% due 5/01/2030 (f) 1,571 1,250 San Francisco, California, City and County Airport Commission, International Airport, Special Facilities Lease Revenue Bonds (SFO Fuel Company LLC), AMT, Series A, 6.10% due 1/01/2020 (f) 1,303 5,075 San Francisco, California, City and County, GO (California Academy of Sciences Improvements), Series E, 5% due 6/15/2022 (i) 5,419 3,800 San Jose, California, GO (Libraries, Parks and Public Safety Projects), 5% due 9/01/2030 (i) 4,000 Portfolio Abbreviations To simplify the listings of BlackRock MuniHoldings Insured Fund II, Inc.'s portfolio holdings in the Schedule of Investments, we have abbreviated the names of many of the securities according to the list below. AMT Alternative Minimum Tax (subject to) COP Certificates of Participation EDA Economic Development Authority GO General Obligation Bonds HDA Housing Development Authority HFA Housing Finance Agency M/F Multi-Family PCR Pollution Control Revenue Bonds S/F Single-Family VRDN Variable Rate Demand Notes BlackRock MuniHoldings Insured Fund II, Inc. Schedule of Investments as of December 31, 2006 (concluded) (in Thousands) Face State Amount Municipal Bonds Value California $ 5,190 Sequoia, California, Unified High School District, GO, Refunding, Series B, 5.50% (concluded) due 7/01/2035 (f) $ 5,822 4,485 Stockton, California, Public Financing Revenue Bonds (Redevelopment Projects), Series A, 5.25% due 9/01/2031 (k) 4,801 2,930 Stockton, California, Public Financing Revenue Bonds (Redevelopment Projects), Series A, 5.25% due 9/01/2034 (k) 3,134 2,915 Tustin, California, Unified School District, Senior Lien Special Tax Bonds (Community Facilities District Number 97-1), Series A, 5% due 9/01/2032 (f) 3,036 4,620 Tustin, California, Unified School District, Senior Lien Special Tax Bonds (Community Facilities District Number 97-1), Series A, 5% due 9/01/2038 (f) 4,802 3,000 University of California Revenue Bonds (Multiple Purpose Projects), Series Q, 5% due 9/01/2022 (f) 3,161 Colorado - 3.6% 6,285 Aurora, Colorado, COP, 5.75% due 12/01/2010 (a)(j) 6,748 280 Colorado HFA, Revenue Refunding Bonds (S/F Program), AMT, Senior Series A-2, 7.50% due 4/01/2031 285 4,000 Colorado Health Facilities Authority, Hospital Revenue Refunding Bonds (Poudre Valley Health Care), Series A, 5.75% due 12/01/2009 (f)(j) 4,268 Connecticut - 0.5% 1,520 Connecticut State, GO, Refunding, Series D, 5% due 12/01/2024 (i) 1,622 Florida - 3.6% 3,670 Miami-Dade County, Florida, Subordinate Special Obligation Revenue Bonds, Series A, 5.24% due 10/01/2037 (i)(p) 786 6,300 Pasco County, Florida, Half-Cent Sales Tax Revenue Bonds, 5.125% due 12/01/2028 (a) 6,654 3,725 South Florida Water Management District, COP, 5% due 10/01/2036 (a) 3,937 Georgia - 2.2% 6,290 Augusta, Georgia, Water and Sewer Revenue Bonds, 5.25% due 10/01/2034 (f) 6,801 Idaho - 0.2% 580 Idaho Housing and Finance Association, S/F Mortgage Revenue Bonds, AMT, Series E, 6% due 1/01/2032 590 Illinois - 7.0% 2,185 Chicago, Illinois, GO (Neighborhoods Alive 21 Program), Series A, 6% due 7/01/2010 (c)(j) 2,370 18,130 Chicago, Illinois, GO, Series A, 6% due 7/01/2010 (c)(j) 19,667 125 Lake, Cook, Kane and McHenry Counties, Illinois, Community Unit School District Number 220, GO, 6% due 12/01/2020 (c) 135 Indiana - 4.1% 3,000 Indiana Transportation Finance Authority, Highway Revenue Bonds, Series A, 5.25% due 6/01/2029 (c) 3,231 9,280 Shelbyville, Indiana, Elementary School Building Corporation Revenue Bonds, First Mortgage, 5.75% due 1/15/2009 (f)(j) 9,760 Kansas - 2.1% 3,510 Kansas State Development Finance Authority, Health Facilities Revenue Bonds (Sisters of Charity Leavenworth), Series J, 6.125% due 12/01/2020 3,786 2,805 Sedgwick and Shawnee Counties, Kansas, S/F Mortgage Revenue Bonds, AMT, Series A-2, 6.20% due 12/01/2033 (e)(g) 2,823 Louisiana - 0.8% 2,000 Louisiana Local Government, Environmental Facilities, Community Development Authority Revenue Bonds (Capital Projects and Equipment Acquisition), Series A, 6.30% due 7/01/2030 (a) 2,386 Massachusetts - 9.0% 5,535 Massachusetts Bay Transportation Authority, Sales Tax Revenue Refunding Bonds, Senior Series A, 5% due 7/01/2035 5,724 3,495 Massachusetts Bay Transportation Authority, Special Assessment Revenue Refunding Bonds, Series A, 5% due 7/01/2015 (j) 3,815 5,000 Massachusetts State School Building Authority, Dedicated Sales Tax Revenue Bonds, Series A, 5% due 8/15/2030 (f) 5,313 12,345 Massachusetts State Special Obligation Dedicated Tax Revenue Bonds, 5.25% due 1/01/2014 (c)(j) 13,508 Michigan - 0.3% 1,000 Michigan State Hospital Finance Authority, Revenue Refunding Bonds (Mercy-Mount Clemens), Series A, 6% due 5/15/2014 (i) 1,056 Minnesota - 4.3% 2,555 Prior Lake, Minnesota, Independent School District Number 719, GO, 5.50% due 2/01/2016 (f) 2,688 1,830 Prior Lake, Minnesota, Independent School District Number 719, GO, 5.50% due 2/01/2017 (f) 1,925 3,570 Prior Lake, Minnesota, Independent School District Number 719, GO, 5.50% due 2/01/2018 (f) 3,756 2,840 Prior Lake, Minnesota, Independent School District Number 719, GO, 5.50% due 2/01/2019 (f) 2,988 2,185 Sauk Rapids, Minnesota, Independent School District Number 47, GO, Series A, 5.625% due 2/01/2018 (i) 2,341 Nebraska - 1.9% 1,410 Omaha Convention Hotel Corporation, Nebraska, Convention Center Revenue Bonds, First Tier, Series A, 5.50% due 4/01/2020 (a) 1,521 3,985 Omaha Convention Hotel Corporation, Nebraska, Convention Center Revenue Bonds, First Tier, Series A, 5.50% due 4/01/2022 (a) 4,298 Nevada - 3.3% 145 Nevada Housing Division, S/F Mortgage Revenue Bonds, AMT, Series A-2, 6.30% due 4/01/2022 (i) 146 9,445 Truckee Meadows, Nevada, Water Authority, Water Revenue Bonds, Series A, 5.50% due 7/01/2011 (f)(j) 10,161 New Jersey - 16.7% 2,980 New Jersey EDA, Cigarette Tax Revenue Bonds, 5.625% due 6/15/2018 3,091 8,590 New Jersey EDA, Cigarette Tax Revenue Bonds, 5.75% due 6/15/2029 9,293 6,200 New Jersey EDA, Cigarette Tax Revenue Bonds, 5.75% due 6/15/2034 (b) 6,903 11,000 New Jersey EDA, Motor Vehicle Surcharge Revenue Bonds, Series A, 5.25% due 7/01/2033 (i) 11,833 4,220 New Jersey State Transportation Trust Fund Authority, Transportation System Revenue Bonds, Series D, 5% due 6/15/2018 (a) 4,541 12,950 New Jersey State Transportation Trust Fund Authority, Transportation System Revenue Bonds, Series D, 5% due 6/15/2020 (f) 13,882 3,000 New Jersey State Turnpike Authority, Turnpike Revenue Bonds, Series C, 5% due 1/01/2030 (f) 3,174 New Mexico - 3.5% 5,000 Farmington, New Mexico, PCR, Refunding (Public Service Company of New Mexico - San Juan Project), Series C, 5.70% due 12/01/2016 (a) 5,108 5,480 New Mexico Finance Authority, Senior Lien State Transportation Revenue Bonds, Series A, 5.125% due 6/15/2018 (i) 5,940 New York - 13.8% 14,000 Nassau Health Care Corporation, New York, Health System Revenue Bonds, 5.75% due 8/01/2009 (f)(j) 15,018 5,000 New York City, New York, Sales Tax Asset Receivable Corporation Revenue Bonds, Series A, 5% due 10/15/2020 (i) 5,359 5,755 New York State Dormitory Authority Revenue Bonds (School Districts Financing Program), Series D, 5.25% due 10/01/2023 (i) 6,185 2,000 Tobacco Settlement Financing Corporation of New York Revenue Bonds, Series A-1, 5.25% due 6/01/2021 (a) 2,144 7,850 Tobacco Settlement Financing Corporation of New York Revenue Bonds, Series C-1, 5.50% due 6/01/2017 8,385 5,630 Tobacco Settlement Financing Corporation of New York Revenue Bonds, Series C-1, 5.50% due 6/01/2020 (c) 6,128 500 Triborough Bridge and Tunnel Authority, New York, General Purpose Revenue Refunding Bonds, VRDN, Series C, 3.85% due 1/01/2032 (a)(l) 500 North 1,305 North Carolina HFA, Home Ownership Revenue Bonds, AMT, Series 14-A, 5.35% due Carolina - 0.4% 1/01/2022 (a) 1,348 Ohio - 0.9% 1,745 Aurora, Ohio, City School District, COP, 6.10% due 12/01/2009 (i)(j) 1,881 1,000 Kent State University, Ohio, University Revenue Bonds, 6% due 5/01/2024 (a) 1,079 Oklahoma - 0.8% 2,385 Claremore, Oklahoma, Public Works Authority, Capital Improvement Revenue Refunding Bonds, Series A, 5.25% due 6/01/2027 (f) 2,589 Pennsylvania - 9.5% 5,600 Lycoming County, Pennsylvania, College Authority Revenue Bonds (Pennsylvania College of Technology), 5.25% due 7/01/2007 (i)(j) 5,701 6,435 Pennsylvania State Higher Educational Facilities Authority, State System of Higher Education Revenue Bonds, Series O, 5.125% due 6/15/2024 (a) 6,471 4,290 Pittsburgh, Pennsylvania, GO, Series C, 5.25% due 9/01/2017 (f) 4,748 6,415 Pittsburgh, Pennsylvania, GO, Series C, 5.25% due 9/01/2018 (f) 7,087 1,390 Seneca Valley, Pennsylvania, School District, GO, 5% due 1/01/2020 (c) 1,492 2,260 Seneca Valley, Pennsylvania, School District, GO, 5% due 1/01/2021 (c) 2,423 2,090 Washington County, Pennsylvania, Capital Funding Authority Revenue Bonds (Capital Projects and Equipment Program), 6.15% due 12/01/2029 (a) 2,242 Rhode Island - 3.5% 5,555 Providence, Rhode Island, Redevelopment Agency Revenue Refunding Bonds (Public Safety and Municipal Buildings), Series A, 5.75% due 4/01/2010 (a)(j) 5,957 4,685 Rhode Island State Health and Educational Building Corporation Revenue Bonds (Rhode Island School of Design), Series D, 5.50% due 8/15/2031 (n) 5,136 South 1,880 South Carolina Housing Finance and Development Authority, Mortgage Revenue Refunding Carolina - 0.6% Bonds, AMT, Series A-2, 6.35% due 7/01/2019 (f) 1,959 Tennessee - 1.6% 3,500 Metropolitan Government of Nashville and Davidson County, Tennessee, Health and Education Facilities Board Revenue Refunding Bonds (Ascension Health Credit), Series A, 5.875% due 11/15/2009 (a)(j) 3,744 1,080 Tennessee HDA, Revenue Bonds (Homeownership Program), AMT, Series 2C, 6% due 7/01/2011 1,108 110 Tennessee HDA, Revenue Refunding Bonds (Homeownership Program), AMT, Series 1, 6.05% due 7/01/2014 (i) 111 Texas - 5.1% 1,750 Austin, Texas, Convention Center Revenue Bonds (Convention Enterprises Inc.), Trust Certificates, Second Tier, Series B, 6% due 1/01/2011(j) 1,897 1,835 Dallas-Fort Worth, Texas, International Airport Revenue Refunding and Improvement Bonds, AMT, Series A, 5.875% due 11/01/2017 (c) 1,985 2,150 Dallas-Fort Worth, Texas, International Airport Revenue Refunding and Improvement Bonds, AMT, Series A, 5.875% due 11/01/2018 (c) 2,326 2,390 Dallas-Fort Worth, Texas, International Airport Revenue Refunding and Improvement Bonds, AMT, Series A, 5.875% due 11/01/2019 (c) 2,585 115 El Paso, Texas, Water and Sewer Revenue Refunding and Improvement Bonds, Series A, 6% due 3/01/2015 (f) 127 170 El Paso, Texas, Water and Sewer Revenue Refunding and Improvement Bonds, Series A, 6% due 3/01/2016 (f) 188 180 El Paso, Texas, Water and Sewer Revenue Refunding and Improvement Bonds, Series A, 6% due 3/01/2017 (f) 199 4,616 Houston, Texas, Community College System, Participation Interests, COP (Alief Center Project), 5.75% due 8/15/2022 (i) 4,806 1,850 Midland, Texas, Certificates of Obligation, GO, 6.10% due 3/01/2010 (c)(j) 1,982 Utah - 0.2% 610 Weber County, Utah, Municipal Building Authority, Lease Revenue Refunding Bonds, 5.75% due 12/15/2007 (i)(j) 628 Washington - 6.9% 6,885 Bellevue, Washington, GO, Refunding, 5.50% due 12/01/2039 (i) 7,610 3,840 Chelan County, Washington, Public Utility District Number 001, Consolidated Revenue Bonds (Chelan Hydro System), AMT, Series A, 5.45% due 7/01/2037 (a) 4,100 1,805 Lewis County, Washington, GO, Refunding, 5.75% due 12/01/2009 (a)(j) 1,912 1,640 Lewis County, Washington, GO, Refunding, 5.75% due 12/01/2024 (a) 1,729 2,500 Seattle, Washington, Municipal Light and Power Revenue Bonds, 6% due 10/01/2009 (i)(j) 2,681 3,500 Seattle, Washington, Water System Revenue Bonds, Series B, 6% due 7/01/2009 (c)(j) 3,734 West 6,210 West Virginia State Housing Development Fund, Housing Finance Revenue Refunding Bonds, Virginia - 2.0% Series D, 5.20% due 11/01/2021 (i) 6,431 Wisconsin - 0.4% 1,250 Wisconsin State Health and Educational Facilities Authority Revenue Bonds (Blood Center of Southeastern Wisconsin Project), 5.75% due 6/01/2034 1,360 Puerto Rico - 2.4% 6,225 Puerto Rico Commonwealth, Public Improvement, GO, 5.125% due 7/01/2030 (f) 6,527 1,010 Puerto Rico Commonwealth, Public Improvement, GO, Refunding, Series B, 5.25% due 7/01/2032 1,087 Total Municipal Bonds (Cost - $442,579) - 146.3% 462,470 Municipal Bonds Held in Trust (m) Arkansas - 4.0% 12,210 Arkansas State Development Finance Authority, M/F Mortgage Revenue Refunding Bonds, Series C, 5.35% due 12/01/2035 (d)(i) 12,815 California - 4.6% 10,710 California Pollution Control Financing Authority, PCR, Refunding (Pacific Gas and Electric), AMT, Series A, 5.35% due 12/01/2016 (i) 11,487 3,000 Port of Oakland, California, Revenue Bonds, AMT, Series K, 5.75% due 11/01/2021 (c) 3,182 Illinois - 2.6% 7,300 Chicago, Illinois, O'Hare International Airport Revenue Bonds, Third Lien, AMT, Series B-2, 6% due 1/01/2029 (n) 8,183 Michigan - 3.4% 2,000 Michigan State Strategic Fund, Limited Obligation Revenue Refunding Bonds (Detroit Edison Company Pollution Control Project), AMT, Series A, 5.50%, due 6/1/2030 (n) 2,160 5,000 Michigan State Strategic Fund, Limited Obligation Revenue Refunding Bonds (Detroit Edison Company Pollution Control Project), AMT, Series C, 5.65% due 9/01/2029 (n) 5,323 3,000 Saint Clair County, Michigan, Economic Revenue Refunding Bonds (Detroit Edison Co. Project), Series AA, 6.40% due 8/01/2024 (a) 3,178 New York - 2.3% 6,750 New York City, New York, Sales Tax Asset Receivable Corporation Revenue Bonds, Series A, 5.25% due 10/15/2027 (a) 7,329 Texas - 5.5% 16,000 Dallas-Fort Worth, Texas, International Airport Revenue Bonds, AMT, Series A, 5.50% due 11/01/2033 (i) 17,254 Total Municipal Bonds Held in Trust - (Cost - $68,405) - 22.4% 70,911 Shares Held Short-Term Securities 11,189 Merrill Lynch Institutional Tax-Exempt Fund, 5.19% (h)(o) 11,189 Total Short-Term Securities (Cost - $11,189) - 3.6% 11,189 Total Investments (Cost - $522,173*) - 172.3% 544,570 Other Assets Less Liabilities - 2.9% 9,350 Liabilities for Trust Certificates, Including Interest Expense Payable - (10.5%) (33,164) Preferred Stock, at Redemption Value - (64.7%) (204,652) ----------- Net Assets Applicable to Common Stock - 100.0% $ 316,104 =========== * The cost and unrealized appreciation (depreciation) of investments as of December 31, 2006, as computed for federal income tax purposes, were as follows: Aggregate cost $ 490,199 ============= Gross unrealized appreciation $ 21,600 Gross unrealized depreciation (214) ------------- Net unrealized appreciation $ 21,386 ============= (a) AMBAC Insured. (b) Assured Guaranty Insured. (c) FGIC Insured. (d) FHA Insured. (e) FNMA Collateralized. (f) FSA Insured. (g) GNMA Collateralized. (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 Merrill Lynch Institutional Tax-Exempt Fund 6,573 $ 74 (i) MBIA Insured. (j) Prerefunded. (k) Radian Insured. (l) 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. (m) 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. (n) XL Capital Insured. (o) Represents the current yield as of December 31, 2006. (p) Represents a zero coupon bond; the interest rate shown reflects the effective yield at the time of purchase. Item 2 - Controls and Procedures 2(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 January 23, 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-Q 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 adjustments to 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. 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 October 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 schedule of investments as of and for the period ended October 31, 2006, were restated to appropriately reflect transfers of such securities as secured borrowings. These adjustments had no impact on net assets, net asset value per share or total return. Subsequent to October 31, 2006, but prior to the evaluation of the design and operation of the Registrant's disclosure controls and procedures at January 23, 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. 2(b) - There have been no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)) that occurred during the last fiscal quarter of the period covered by this report that has materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. However, as discussed above, subsequent to October 31, 2006, the Registrant has enhanced controls related to the application of SFAS 140. Item 3 - Exhibits Certifications - Attached hereto Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. BlackRock MuniHoldings Insured Fund II, Inc. By: /s/ Robert C. Doll, Jr. ----------------------- Robert C. Doll, Jr. Chief Executive Officer BlackRock MuniHoldings Insured Fund II, Inc. Date: February 20, 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 BlackRock MuniHoldings Insured Fund II, Inc. Date: February 20, 2007 By: /s/ Donald C. Burke -------------------- Donald C. Burke Chief Financial Officer BlackRock MuniHoldings Insured Fund II, Inc. Date: February 20, 2007