Radian Group Inc. Notes to Consolidated Financial Statements - (Continued) The following table shows our mortgage insurance reserve for losses and LAE by category at the end of each period  indicated:  Reserves for losses by category: Prime . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Alt-A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A minus and below. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reinsurance recoverable (1). . . . . . . . . . . . . . . . . . . . . . . Total primary reserves. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pool insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total first-lien reserves. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Second-lien and other (2). . . . . . . . . . . . . . . . . . . . . . . . . Total reserve for losses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ______________________ (1)  Primarily represents ceded losses on captive transactions and Smart Home.  (2)  Does not include second-lien premium deficiency reserve.  Deteriorating markets in California and Florida, where non-prime and non-traditional mortgage products such as  adjustable rate mortgages and interest-only loans were prevalent and where home prices have fallen significantly , have resulted  in significant losses in our mortgage insurance business. During the prolonged period of rising home prices that preceded the  current downturn in the U.S. housing market, very few mortgage delinquencies and claims were attributable to insured loans in  California, despite the significant growth during this period of riskier , non-traditional mortgage products in this state.  As  mortgage credit performance in California and Florida has deteriorated, given the size of these markets, our loss experience has  been significantly af fected and will continue to be negatively af fected if conditions do not improve or continue to deteriorate.  Approximately 20% of our primary mortgage insurance RIF at  December 31, 2012 was concentrated in the states of California  and Florida. See Note 12 for information regarding our financial guaranty claim liabilities. The PDR in our mortgage insurance business at  December 31, 2012 and 2011 relates to our second-lien business. 227 (In thousands) Year Ended December 31, 2012 2011 $ 3,644 $ 10,736 (1,897) (11,143) 1,530 2,851 241 595 167 605 $ 3,685 $ 3,644 Balance at January 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Incurred losses recognized in loss reserves. . . . . . . . . . . . . . . . . . . . . . . Premiums recognized in earned premiums. . . . . . . . . . . . . . . . . . . . . . . Changes in underlying assumptions. . . . . . . . . . . . . . . . . . . . . . . . . . . . Accretion of discount and other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Balance at December 31. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The following table reconciles our mortgage insurance segment’ s beginning and ending second-lien PDR for the periods  indicated: 11. Reserve for Premium Deficiency (In thousands) Year Ended December 31, 2012 2011 $ 1,739,968 $ 1,748,412 564,719 612,423 361,533 370,806 83,238 151,569 2,749,458 2,883,210 323,403 353,583 3,072,861 3,236,793 10,747 11,107 $ 3,083,608 $ 3,247,900