Radian Group Inc. Notes to Consolidated Financial Statements - (Continued) Special Mention . This category includes insured transactions that are internally rated no more than two rating levels  below investment grade. Although these insured transactions typically are not performing as expected, we have determined that  such transactions are not expected to have severe, prolonged stress and we do not believe that claim payments are imminent.  The credits in this category could have all or some of the following characteristics:  Direct and assumed exposures in this category that satisfy certain criteria, including minimum outstanding par thresholds,  are typically reviewed annually or more frequently if there is a change to the credit profile. Other exposures that do not satisfy  applicable criteria are reviewed at the discretion of the risk manager , senior management, the Watch and Reserve Committee  Chairperson or the Chief Risk Of ficer for our financial guaranty business.  Intensified Surveillance . This category includes transactions in financial guaranty’ s insured portfolio that are internally  rated below investment grade and indicate a severe and often permanent adverse change in the transaction’ s credit profile.  Transactions in this category are still performing, meaning they have not yet defaulted on a payment, but our risk management  department has determined that there is a substantial likelihood of default.  Transactions that are placed in this category may  have some or all of the following characteristics:  Insured transactions are generally elevated into this category from the Special Mention list as a result of continuing  declining credit trends. Occasionally, however, transactions may enter this category directly due to an unexpected financial  event that leads to rapid and severe deterioration. Direct and assumed exposures in this category that satisfy certain criteria,  including minimum outstanding par thresholds, are generally reviewed quarterly . Other exposures that do not satisfy applicable  criteria are reviewed at the discretion of the risk manager , senior management, the Watch and Reserve Committee Chairperson  or the Chief Risk Officer for our financial guaranty business.  •  requires the allocation of claim liability reserves.  •  requires frequent monitoring and risk management action to prevent and mitigate possible claims; and  •  debtors or servicers with distressed operations that we believe have a questionable ability to continue operating in  the future without external assistance from government and/or private third parties;  •  impaired ability to satisfy future payments;  •  non-investment grade transactions with high credit risk and low possibility of recovery back to performing levels;  230 •  requires additional monitoring by the risk manager to evaluate developing, potentially adverse credit trends.  •  vulnerability to further downward pressure, which could lead to dif ficulty in covering future debt obligations; and  •  limited capacity for absorbing volatility and uncertainty; •  slight probability of payment default due to current adverse economic conditions and operating challenges;  •  non-investment grade obligations with increasing credit risk, but with the possibility of recovering and returning to  investment grade levels; 