Wendy Zhang/ Shanghai Daily news

The Industrial and Commercial Bank of China (ICBC) headquarters announced to call off the seven-year-long house mortgage insurance that mortgage holders were previously compulsory to pay, eastday.com reported yesterday.
According to a regulation issued by the Central Bank in 1998, home buyers are required to pay such insurance when applying for bank loans, and if their mortgaged properties are destroyed by natural disasters or acts of God, banks, which extend the loans, will be compensated by insurers.
The regulation has aroused disputes during the seven years as home buyers pay the money but banks are the beneficiaries. 
However, for banks, the insurance, with a narrow coverage, is not effective enough. As only when the housing properties are destroyed by natural disasters or acts of God, insurers will pay the loans to the banks. Most of the bank risks come from defaults of mortgage holders, but in such cases, banks cannot be compensated, said a spokesman with a bank in Shanghai.
"We haven't as yet received any notices on the canceling of the policy, so we are still charging the fees for the time being," said an employee with the ICBC's Shanghai branch.
The policy change will not have a large impact on the local real estate market, as home buyers care more about the housing prices rather than such additional costs as premiums. However, it will affect other banks, said an industry analyst.