Mortgage insurance premiums paid during the year are reported on Form 1098 which is sent out by the lender. Prepaid insurance premiums can be allocated over the term of the loan or 84 months (whichever period is shorter) under a ruling from the IRS (Notice 2008-15).
Mortgage insurance premiums are an itemized tax deduction and are reported on Schedule A. On the 2012 version of Schedule A, this is found at Line 13.
This is a temporary tax break. It's effective for mortgage insurance policies issued on or after January 1, 2007. The deduction is scheduled to expire on December 31, 2013.