UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY

Morgan Stanley Insured California Municipal Securities

(Exact name of registrant as specified in charter)

522 Fifth Avenue, New York, New York		10036
(Address of principal executive offices)		(Zip code)

Randy Takian

522 Fifth Avenue, New York, New York 10036

(Name and address of agent for service)

Registrant’s telephone number, including area code: 212-296-6990

Date of fiscal year end: October 31, 2008

Date of reporting period: July 31, 2008

 

 

Item 1. Schedule of Investments.

The Trust’s schedule of investments as of the close of the reporting period prepared pursuant to Rule 12-12 of Regulation S-X is as follows:

Morgan Stanley Insured California Municipal Securities
Portfolio of Investments § July 31, 2008 (unaudited)

PRINCIPAL
AMOUNT IN						COUPON				MATURITY
THOUSANDS						RATE				DATE				VALUE
				Tax-Exempt Municipal Bonds (93.4%)
				California (91.2%)
$	235			Alameda County Joint Powers Authority, Ser 2008 (FSA Insd)			5.00	%			12/01/24			$	240,797
	185			Alvord Unified School District, California, Ser 2007 A (FSA Insd)			5.00				08/01/28				189,240
	2,000			Anaheim Public Financing Authority, Distribution Electric Ser 2007-A (MBIA Insd)			4.50				10/01/37				1,810,600
	2,000			California Department of Veterans Affairs, Home Purchase 2002 Ser A (AMBAC Insd)			5.35				12/01/27				2,027,860
	1,480			California Department of Water Resources, Central Valley Ser Y (FGIC Insd)			5.25				12/01/19				1,568,164
	2,000			California Infrastructure & Economic Development Bank, Bay Area Toll Bridges Seismic Retrofit First Lien Ser 2003 A (FGIC Insd) (ETM)			5.00				07/01/29				2,135,200
	1,000			California State University, Ser 2005 A (AMBAC Insd)			5.00				11/01/35				991,099
	400			California Veterans Ser BH (AMT) (FSA Insd)			5.40				12/01/16				402,288
	1,000			Capistrano Unified School District, Community Facilities District #98-2 Ladera Ser 2005 (FGIC Insd)			5.00				09/01/29				942,760
	3,025			City of Fairfield Water Financing, COPs Ser 2007 A (XLCA Insd)			0.00				04/01/30				884,056
	1,055			Fontana Unified School District, Ser 2008 B (FSA Insd)			0.00				02/01/33				275,904
	1,000			Golden State Tobacco Securitization Corporation, Enhanced Asset Backed Ser 2005 A (FGIC Insd)			5.00				06/01/38				901,400
	775			Grossmont Union High School District, Election of 2004 Ser 2006 (MBIA Insd)			0.00				08/01/24				331,747
	775			Grossmont Union High School District, Election of 2004 Ser 2006 (MBIA Insd)			0.00				08/01/30				240,514
	1,280			Huntington Beach Union High School District Ser 2004 (FSA Insd)			5.00				08/01/26				1,304,562
	1,110			Kern County Board of Education Refg 2006 Ser A COPs (MBIA Insd)			5.00				06/01/31				1,092,107
	245			Kern County Water Agency, Improvement District No 4 Ser 2008A COPs (AGC Insd)			5.00				05/01/28				238,093
	1,100			La Quinta Financing Authority, Local Agency 2004 Ser A (AMBAC Insd)			5.25				09/01/24				1,132,230
	1,030			Los Angeles, Ser 2004 A (MBIA Insd)			5.00				09/01/24				1,058,758
	1,000			Los Angeles County Metropolitan Transportation Authority Sales Tax Ser 2000 A (FGIC Insd)			4.50				07/01/29	(a)			954,790
	1,000			Los Angeles Department of Water & Power,2001 Ser A (FSA Insd)			5.25				07/01/21				1,040,200
	800			Los Angeles Municipal Improvement Corporation, Police Headquarters Ser 2006 - A (FGIC Insd)			4.75				01/01/31				745,624
	1,000			Los Angeles Wastewater Refg Ser 2003 B (FSA Insd)			5.00				06/01/22				1,023,620
	1,000			Metropolitan Water District of Southern California, 2003 Ser B-2 (FGIC Insd)			5.00				10/01/27				1,013,100
	235			Oakland Joint Powers Financing Authority, Oakland Administration Buildings Ser 2008 A (AGC Insd)			5.00				08/01/26				230,897
	1,000			Oxnard Financing Authority, Wastewater 2004 Ser A (FGIC Insd)			5.00				06/01/29				980,900
	250			Placer County Water Agency Water Refg COPs Ser 2008 (FSA Insd)			4.75				07/01/29				243,840
	1,000			Rancho Mirage Redevelopment Agency, Ser 2003 A (MBIA Insd)			5.00				04/01/33				984,600
	360			Redding Electric System, COPs Ser 2008 A (FSA Insd)			5.00				06/01/27				366,415
	500			Riverside California Electric Revenue			5.00				10/01/28				511,575
	1,235			Rocklin Unified School District, Community Facilities District No 2 Ser 2007 (MBIA Insd)			0.00				09/01/34				276,566
	1,255			Rocklin Unified School District, Community Facilities District No 2 Ser 2007 (MBIA Insd)			0.00				09/01/35				263,701
	1,230			Rocklin Unified School District, Community Facilities District No 2 Ser 2007 (MBIA Insd)			0.00				09/01/36				243,380
	1,025			Rocklin Unified School District, Community Facilities District No 2 Ser 2007 (MBIA Insd)			0.00				09/01/37				190,425
	675			Roseville Joint Union High School District, Election Ser 2004 C (FSA Insd)			0.00				08/01/25				277,857
	1,000			Sacramento County Sanitation Districts Financing Authority, Refg Ser 2006 (FGIC Insd)			5.00				12/01/28				1,008,320
	180			Sacramento City Financing Authority, 1999 Solid Waste & Redevelopment (AMBAC Insd)			5.75				12/01/22				189,362
	1,000			San Diego County Water Authority, California, Ser 2004 A COPs (FSA Insd)			5.00				05/01/29				1,007,330
	1,000			San Francisco City & County, City Buildings Ser 2007 A COPs (FGIC Insd)			4.50				09/01/37				883,330
	340			San Francisco City & County, Laguna Honda Hospital RITES PA 1387 (FSA Insd)			11.381	(b)			06/15/30				357,864
	2,000			San Francisco Public Utilities Commission, Water Refg Ser A 2001 (FSA Insd)			5.00				11/01/31				2,010,561
	1,000			San Jose, Airport Ser 2001 A (FGIC Insd)			5.00				03/01/25				1,006,210
	1,000			San Jose-Evergreen Community College District, Election Ser 2004 B (FSA Insd)			0.00				09/01/32				271,980
	1,870			School Facilities Financing Authority			0.00				08/01/33				456,579
	1,000			Simi Valley Public Financing Authority, Ser 2004 COPs (AMBAC Insd)			5.00				09/01/30				967,500
	1,000			Southern California Public Power Authority, Transmission Refg Ser 2002 A (FSA Insd)			5.25				07/01/18				1,057,310
	250			Tustin Unified School Facilities District No 2002-1-2002 Election Ser 2008 C (FSA Insd)			5.00				06/01/28				256,033
	1,000			University of California, Ser 2007- J (FSA Insd)			4.50				05/15/31				940,159
	1,000			University of California, Ser 2007- J (FSA Insd)			4.50				05/15/35				925,180

PRINCIPAL
AMOUNT IN						COUPON				MATURITY
THOUSANDS						RATE				DATE				VALUE
	1,000			University of California Regents Ser 2007 A (MBIA Insd)			4.50				05/15/37				915,520
	1,000			Upland School District, Election 2000 Ser 2001 B (FSA Insd)			5.125				08/01/25				1,023,210
	675			Val Verde Unified School District of Construction COPs Ser 2005 B (FGIC Insd)			5.00				01/01/30				590,504
	1,375			Washington Unified School District, 2004 Ser A (FGIC Insd)			5.00				08/01/22				1,402,389
	245			West Basin Municipal Water District Revenue			5.00				08/01/27				239,708
	570			Yosemite Community College District, Election of 2004, Ser 2008 C (FSA Insd)			0.00				08/01/25				237,371
	1,000			Yucaipa Valley Water District, Ser 2004 A COPs (MBIA Insd)			5.25				09/01/24				1,015,020
															43,876,309
				Puerto Rico (2.2%)
	1,000			Puerto Rico Infrastructure Financing Authority, 2000 Ser A (ETM) (c)			5.50				10/01/32				1,036,790
				Total Tax-Exempt Municipal Bonds											44,913,099
				(Cost $45,685,814)
				California Short-Term Tax-Exempt Municipal Obligations (5.4%)
	2,200			California Department of Water Resources, Power Supply Ser 2002 B Subser B-1 (Demand 08/01/08)			2.35	(d)			05/01/22				2,200,000
	390			California Housing Finance Agency, Multifamily Housing Ser 2000 D (Demand 08/01/08)			2.30	(d)			02/01/31				390,000
				Total California Short-Term Tax-Exempt Municipal Obligations (Cost $2,590,000)											2,590,000
				Total Investments
				(Cost $48,275,814) (e) (f)							98.8	%			47,503,099
				Other Assets in Excess of Liabilities							1.2				589,353
				Net Assets Applicable to Common Shareholders							100.0	%		$	48,092,452

FUTURES CONTRACTS OPEN AT JULY 31, 2008:

										UNREALIZED
NUMBER OF				DESCRIPTION, DELIVERY		UNDERLYING FACE				APPRECIATION
CONTRACTS		LONG/SHORT		MONTH AND YEAR		AMOUNT AT VALUE				(DEPRECIATION)
126		Long		U.S. Swaps 5 Year, September 2008		$	13,590,282			$	38,973
98		Long		U.S. Swaps 10 Year, September 2008			10,789,188				77,396
11		Long		U.S. Treasury Bonds 20 Year, September 2008			1,263,109				7,460
10		Long		U.S. Treasury Notes 5 Year, September 2008			1,060,000				(288	)
29		Short		U.S. Treasury Notes 5 Year , September 2008			(3,228,742	)			(2,784	)
68		Short		U.S. Treasury Bonds 20 Year, September 2008			(7,854,000	)			(16,096	)
				Net Unrealized Appreciation						$	104,660

INTEREST RATE SWAP CONTRACTS OPEN AT JULY 31, 2008:

UNREALIZED

NOTIONAL

PAYMENTS

PAYMENTS

TERMINATION

APPRECIATION

COUNTERPARTY

AMOUNT (000)

RECEIVED BY FUND

MADE BY FUND

DATE

(DEPRECIATION)

JPMorgan Chase Bank N.A.

$

3,280

Fixed Rate 5.385%

Floating Rate 0.00%

@

February 14, 2018

$

13,973

Bank of America N.A.

748

Fixed Rate 5.58

Floating Rate 0.00

@

February 28, 2018

8,318

Bank of America N.A.

935

Fixed Rate 5.070

Floating Rate 0.00

@

April 14, 2018

(7,340

)

Bank of America N.A.

945

Fixed Rate 4.982

Floating Rate 0.00

@

April 15, 2018

(10,376

)

Merrill Lynch & Co.

1,255

Fixed Rate 5.00

Floating Rate 0.00

@

April 15, 2018

(13,002

)

JPMorgan Chase Bank N.A.

4,190

Floating Rate 0.00

@

Fixed Rate 5.831

February 14, 2023

(35,070

)

Bank of America N.A.

944

Floating Rate 0.00

@

Fixed Rate 5.99

February 28, 2023

(12,027

)

Bank of America N.A.

1,195

Floating Rate 0.00

@

Fixed Rate 5.47

April 14, 2023

1,840

Bank of America N.A.

1,155

Floating Rate 0.00

@

Fixed Rate 5.38

April 15, 2023

4,620

Merrill Lynch & Co.

1,620

Floating Rate 0.00

@

Fixed Rate 5.395

April 15, 2023

5,816

Net Unrealized Depreciation

($43,248

)

Item 2. Controls and Procedures.

(a) The Trust’s principal executive officer and principal financial officer have concluded that the Trust’s disclosure controls and procedures are sufficient to ensure that information required to be disclosed by the Trust in this Form N-Q was recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, based upon such officers’ evaluation of these controls and procedures as of a date within 90 days of the filing date of the report.

(b) There were no changes in the Trust’s internal control over financial reporting that occurred during the registrant’s fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Trust’s internal control over financial reporting.

Item 3. Exhibits.

(a) A separate certification for each principal executive officer and principal financial officer of the registrant are attached hereto.

SIGNATURES

     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.

Morgan Stanley Insured California Municipal Securities

     Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.