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: 811-07344 Morgan Stanley California Insured Municipal Income Trust (Exact name of registrant as specified in charter) 1221 Avenue of the Americas, New York, New York 10020 (Address of principal executive offices) (Zip code) Ronald E. Robison 1221 Avenue of the Americas, New York, New York 10020 (Name and address of agent for service) Registrant's telephone number, including area code: 212-762-4000 Date of fiscal year end: October 31, 2006 Date of reporting period: July 31, 2006 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 CALIFORNIA INSURED MUNICIPAL INCOME TRUST PORTFOLIO OF INVESTMENTS July 31, 2006 (unaudited) PRINCIPAL AMOUNT IN COUPON MATURITY THOUSANDS RATE DATE VALUE --------- ---- ---- ----- CALIFORNIA TAX-EXEMPT MUNICIPAL BONDS (136.2%) General Obligation (6.9%) 780 California, Various Purpose Ser 2005 Dtd 04/01/93 (FSA) 5.50% 04/01/19 $ 782,114 Los Angeles Unified School District, 4,000 2003 Ser A (MBIA) 5.25 07/01/19 4,288,160 2,000 Ser 2006 F (MBIA) 5.00 07/01/30 2,078,400 3,000 Oakland, Ser 2003 A (MBIA) 5.00 01/15/33 3,080,640 1,000 San Francisco City & County, Laguna Honda Hospital 6.56## 06/15/30 1,119,120 ------ RITES PA 1387 (FSA) 10,780 11,348,434 ------ ---------- Educational Facilities Revenue (8.9%) California State University, 2,000 Ser 2003 A (FGIC) 5.25 11/01/21 2,127,020 2,000 Ser 2005 A (Ambac) 5.00 11/01/35 2,064,960 University of California, 2,000 Ser 2003 B (Ambac) 5.00 05/15/22 2,082,260 5,000 Multi Purpose Ser 2003 Q (FSA) 5.00 09/01/23 5,187,950 1,000 Limited Projects Ser 2005 B (FSA) 5.00 05/15/30 1,033,480 2,000 Multi Purpose Ser Q (FSA) 5.00 09/01/31 2,061,840 ------ ---------- 14,000 14,557,510 ------ ---------- Electric Revenue (10.8%) Los Angeles Department of Water & Power, 4,000 2001 Ser A (FSA) 5.25 07/01/21 4,201,000 5,000 2003 Ser A Subser A-2 (MBIA) 5.00 07/01/27 5,157,500 4,000 Modesto Irrigation District, Ser 2001 A COPs (FSA) 5.00 07/01/26 4,096,000 2,150 Turlock Irrigation District, Refg 1998 Ser A (MBIA) 5.00 01/01/26 2,187,689 2,000 Puerto Rico Electric Power Authority, Ser RR (XLCA) 5.00 07/01/30 2,070,480 ------ ---------- 17,150 17,712,669 ------ ---------- Hospital Revenue (5.6%) 2,830 California Health Facilities Financing Authority, 5.75 07/01/23 2,838,943 Children's Hospital San Diego Ser 1993 (MBIA) 6,000 University of California, UCLA Medical Center 5.25 05/15/30 6,283,560 ------ Ser 2004A (Ambac) ---------- 8,830 9,122,503 ------ ---------- Mortgage Revenue - Single Family (3.2%) 5,000 California Department of Veterans Affairs, Home Purchase 5.35 12/01/27 5,277,700 ------ 2002 Ser A (Ambac) ---------- Public Facilities Revenue (15.9%) 2,000 Kern County Board of Education, Refg Ser 2006 A COPs (MBIA) 5.00 06/01/31 2,061,780 5,000 Modesto, Community Center Refg 1993 Ser A COPs (Ambac) 5.00 11/01/23 5,362,800 2,000 Sacramento City Financing Authority, 2003 Capital 5.00 12/01/33 2,056,100 Improvement (Ambac) 5,000 San Francisco Redevelopment Agency, George R Moscone 5.25 07/01/18 5,325,500 Convention Center Refg Ser 2002 (FSA) 8,000 San Jose Financing Authority, Civic Center Ser 2002 B (Ambac) 5.00 06/01/37 8,173,120 1,000 Simi Valley Public Financing Authority, Ser 2004 COPs (Ambac) 5.00 09/01/30 1,026,370 2,000 Val Verde Unified School District, Ser 2005 B COPs (FGIC) 5.00 01/01/35 2,051,720 ------ ---------- 25,000 26,057,390 ------ ---------- Tax Allocation Revenue (16.9%) Burbank Public Financing Authority, 1,300 Golden State Redev 2003 Ser A (Ambac) 5.25 12/01/22 1,376,479 1,500 Golden State Redev 2003 Ser A (Ambac) 5.25 12/01/23 1,585,350 1,000 Capistrano Unified School District, Community Facilities 5.00 09/01/29 1,035,020 District #98-2 Ladera Ser 2005 (FGIC) 2,000 Chula Vista Public Financing Authority, Ser A 2005 (MBIA) 5.00 09/01/29 2,059,520 2,000 Culver City Redevelopment Agency, Ser 2005 A (Ambac) 5.00 11/01/25 2,070,240 3,000 La Quinta Financing Authority, Local Agency 2004 Ser A (Ambac) 5.25 09/01/24 3,193,800 2,000 La Quinta Redevelopment Agency, Area #1 Ser 2002 (Ambac) 5.00 09/01/22 2,080,120 Long Beach Bond Finance Authority, 450 Downtown N Long Beach Poly High & West Beach 2002 5.375 08/01/18 483,088 Ser A (Ambac) 2,000 Housing & Gas Utility 2005 Ser A (Ambac) 5.00 08/01/40 2,041,260 3,000 Milpitas Redevelopment Agency, Area #1 Ser 2003 (MBIA) 5.00 09/01/22 3,107,490 6,000 Poway Redevelopment Agency, Pagway DRIVERS Ser 372 (MBIA) 6.54## 06/15/11 6,636,780 2,000 San Jose Redevelopment Agency, Merged Area Ser 2002 (MBIA) 5.00 08/01/32 2,034,400 ------ ---------- 26,250 27,703,547 ------ ---------- Transportation Facilities Revenue (20.0%) 2,750 Long Beach Harbor, Ser 1995 (AMT) (MBIA) 5.00 05/15/24 2,833,627 10,000 Los Angeles, Harbor Department 2001 A (Ambac) 5.00 08/01/25 10,332,400 5,000 Los Angeles County Metropolitan Transportation Authority, 5.25 07/01/30 5,215,050 Sales Tax Ser 2000 A (FGIC) 3,000 Port of Oakland, 2000 Ser K (AMT) (FGIC) 5.875 11/01/17 3,185,820 5,000 San Francisco Airports Commission, San Francisco Int'l 5.25 05/01/26 5,129,400 Airport Refg Issue 27A (AMT) (MBIA) 2,000 San Joaquin Hills Transportation Corridor Agency, Toll Road 5.25 01/15/30 2,048,640 Refg Ser 1997 A (MBIA) 4,000 San Jose, Airport Ser 2001 A (FGIC) 5.00 03/01/25 4,084,320 ------ ---------- 31,750 32,829,257 ------ ---------- Water & Sewer Revenue (29.7%) 3,000 California Department of Water Resources, Central Valley 5.25 12/01/19 3,213,780 Ser Y (FGIC) 1,000 Camarillo Public Finance Authority, Wastewater Ser 2005 5.00 06/01/36 1,029,300 (Ambac) Contra Costa Water District, 5,060 Refg Ser L (FSA) 5.00 10/01/20 5,291,900 2,135 Refg Ser L (FSA) 5.00 10/01/21 2,224,948 2,240 Refg Ser L (FSA) 5.00 10/01/22 2,333,386 3,000 East Bay Municipal Utility District, Water Ser 2001 (MBIA) 5.00 06/01/26 3,080,070 1,000 Eastern Municipal Water District, Water & Sewer Ser 2006 5.00 07/01/32 1,030,720 A COPs (MBIA) 7,000 Los Angeles Wastewater, Refg Ser 2003 B (FSA) 5.00 06/01/22 7,288,330 Metropolitan Waterworks District of Southern California, 4,000 2003 Ser B-1 (FGIC) 5.00 10/01/33 4,117,400 2,000 2003 Ser B-1 (FGIC) 5.00 10/01/36 2,057,480 3,000 Sacramento Financing Authority, Water & Capital Improvement 5.00 12/01/26 3,080,070 2001 Ser A (Ambac) 4,000 San Diego County Water Authority, Ser 2004 A COPs (FSA) 5.00 05/01/29 4,127,000 5,000 San Francisco Public Utilities Commission, Water Refg Ser A 5.00 11/01/31 5,114,250 2001 (FSA) 4,690 Santa Maria, Local Water & Refg Ser 1993 COPs (FGIC) 5.50 08/01/21 4,696,191 ------ ---------- 47,125 48,684,825 ------ ---------- Other Revenue (4.5%) 3,000 California, Economic Recovery Ser 2004 A (MBIA) 5.00 07/01/15 3,213,330 4,000 Golden State Tobacco Securitization Corporation, 5.00 06/01/38 4,104,600 ----- Enhanced Asset Backed Ser 2005 A (FGIC) ---------- 7,000 7,317,930 ----- ---------- Refunded (13.8%) 6,000 California Department of Water Resources, Power Supply 5.375 05/01/12+ 6,556,320 Ser 2002 A (Ambac) 4,000 California Infrastructure and Economic Development Bank, 5.25 07/01/13+ 4,353,560 Bay Area Toll Bridges Seismic Retrofit First Lien Ser 2003 A (FSA) 2,000 San Diego Unified School District,1998 Ser C (FSA) 5.00 07/01/11# 2,129,160 1,125 San Francisco Bay Area Rapid Transit District, Sales Tax 5.00 07/01/08+ 1,146,982 Ser 1998 (Ambac) Puerto Rico Infrastructure Financing Authority, 3,000 2000 Ser A (ETM) 5.375 10/01/24 3,191,160 5,000 2000 Ser A (ETM) 5.50 10/01/32 5,328,500 ------ ----------- 21,125 22,705,682 ------ ----------- 214,010 TOTAL CALIFORNIA TAX-EXEMPT MUNICIPAL BONDS (Cost $216,085,318) 223,317,447 ------- ----------- CALIFORNIA TAX-EXEMPT SHORT-TERM MUNICIPAL OBLIGATIONS (2.0%) 2,000 California, Ser 2004-5 (Demand 08/01/06) 3.59* 05/01/34 2,000,000 200 Irvine Assessment District No. 97-16, Improvement Bond Act 3.59* 09/02/22 200,000 1915 Ser A (Demand 08/01/06) 1,000 Metropolitan Water District of Southern California, Water 2000 3.59* 07/01/35 1,000,000 ----- Ser B-1 (Demand 08/01/06) ----------- 3,200 TOTAL CALIFORNIA TAX-EXEMPT SHORT-TERM MUNICIPAL OBLIGATIONS (Cost $3,200,000) 3,200,000 ----- ----------- $217,210 TOTAL INVESTMENTS (Cost $219,285,318)(a) 138.2% 226,517,447 ======== OTHER ASSETS IN EXCESS OF LIABILITIES 1.5 2,496,639 PREFERRED SHARES OF BENEFICIAL INTEREST (39.7) (65,040,578) ------ ------------ NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS 100.0% $163,973,508 ====== ============ ------------------------ Note: The categories of investments are shown as a percentage of net assets applicable to common shareholders. AMT Alternative Minimum Tax. COPs Certificates of Participation. DRIVERS Derivative Inverse Tax-Exempt Receipts (Illiquid security). ETM Escrowed to Maturity. RITES Residual Interest Tax-Exempt Securities (Illiquid security). + Prerefunded to call date shown. # Crossover refunded to call date shown. ## Current coupon rate for inverse floating rate municipal obligation. This rate resets periodically as the auction rate on the related security changes. Position in inverse floating rate municipal obligation has a total value of $7,755,900 which represents 4.7% of net assets applicable to common shareholders. * Current coupon of variable rate demand obligation. (a) The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is $7,505,812 and the aggregate gross unrealized depreciation is $273,683 resulting in net unrealized appreciation of $7,232,129. Bond Insurance: --------------- Ambac Ambac Assurance Corporation. FGIC Financial Guaranty Insurance Company. FSA Financial Security Assurance Inc. MBIA Municipal Bond Investors Assurance Corporation. XLCA XL Capital Assurance Inc 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. 2 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 California Insured Municipal Income Trust /s/ Ronald E. Robison Ronald E. Robison Principal Executive Officer September 21, 2006 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. /s/ Ronald E. Robison Ronald E. Robison Principal Executive Officer September 21, 2006 /s/ Francis Smith Francis Smith Principal Financial Officer September 21, 2006 3 EXHIBIT 3 A1 CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER I, Ronald E. Robison, certify that: 1. I have reviewed this report on Form N-Q of Morgan Stanley California Insured Municipal Income Trust; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Omitted; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: September 21, 2006 /s/ Ronald E. Robison Ronald E. Robison Principal Executive Officer 4 EXHIBIT 3 A2 CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER I, Francis Smith, certify that: 1. I have reviewed this report on Form N-Q of Morgan Stanley California Insured Municipal Income Trust; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Omitted; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: September 21, 2006 /s/ Francis Smith Francis Smith Principal Financial Officer 5