PIF Special Opportunities Fund, Common Stock

The Board of Directors of Insured Municipal Income Fund Inc. (NYSE: PIF) (the “Fund”), a registered closed-end management investment company, has approved the redemption of the Fund’s auction preferred shares (“APS”).

The redemption of APS is subject to certain notice requirements. The necessary amounts to cover the redemption have been deposited with the auction agent on October 5, 2009. As a result, the APS that are being redeemed will cease to accumulate dividends as of that date. The APS will be redeemed based on the following schedule:

Series of APS     CUSIP Number    

RedemptionPrice

   

Number of SharesRedeemed

   

RedemptionPayment Date

Series A     69574F206     $50,000     590     October 16, 2009 Series B     69574F305     $50,000     590     October 19, 2009 Series C     69574F404     $50,000     591     October 13, 2009 Series D     69574F503     $50,000     443     October 14, 2009 Series E     45809F203     $50,000     443     October 15, 2009 Series F     45809F302     $50,000     443     October 16, 2009

The redemption of the APS, and a parallel termination of the Fund’s Tender Option Bond Program, will have the effect of eliminating the Fund’s leverage. Investors should be aware that the removal of leverage and the repositioning of the Fund into shorter duration securities to accommodate an anticipated tender offer for common stock later in the year is expected to result in a substantially lower level of future dividends for common stockholders; the amount of future dividends will continue to be announced in monthly press releases, and the nature of any reductions would be disclosed at those times.

Because the Fund currently has unrealized net capital gains, compliance with applicable tax requirements may result in a retroactive designation of a portion of the distributions paid to APS shareholders, prior to the redemption, as taxable capital gain dividends. As required by the Fund’s organizational documents this would require the Fund to subsequently pay an “additional dividend” to the holders of the APS intended to compensate them for the tax deemed to result from such allocation. The timing and amount of paying such “additional payment” is dependent upon numerous variables during the remainder of the Fund’s current fiscal year, and can only be determined in the future, expected during the first half of 2010.

The Board of Directors of the Fund also announced the engagement of U.S. Bancorp Fund Services, LLC as the Fund’s administrator, fund accounting agent and custodian, and of American Stock Transfer & Trust Company, LLC as the Fund’s transfer agent.

FORWARD LOOKING STATEMENTS

Certain statements made above may be forward-looking statements. Actual future results or occurrences may differ significantly from those anticipated in any forward-looking statements due to numerous factors. The Fund’s investment adviser and the Fund, and their affiliates, undertake no responsibility to update publicly or revise any forward-looking statements. The inclusion of any statement in this release does not constitute an admission that the events or circumstances described in such statement are material.