Notification on Collection of Premium Levy by Insurance Authority
Insurance Authority (“IA”), as an independent insurance regulator, has to be financially independent and able to recover its operating cost. It is empowered by the Insurance Ordinance (Cap. 41) to collect premium levy from policy holders and thus we write to you for your attention.
As announced by the IA, they will start collecting premium levy on all insurance policies (except for certain policies exempt by law) through insurance companies starting from 1 January 2018. Policy holdersmust comply to pay the levy in accordance with the Insurance (Levy) Order.
Levy payable is calculated as a percentage of premium payable and shall be paid by policy holders alongside the premium that an incremental approach will be adopted on the collection of levy. The levy rate will start at 0.04% of the insurance premium in Phase 1 and will increase gradually until it reaches 0.1%. The amount of the levy imposed on each policy will be subject to a cap (refer to table below).
|Policy Inception Date or Policy Anniversary Date
||1 January 2018 to 31 March 2019
||1 April 2019 to 31 March 2020
||1 April 2020 to 31 March 2021
||From 1 April 2021 onwards
As stated in the law, a pecuniary penalty up to HK$5,000 may be imposed to the Policy holders and the outstanding levy may be recovered as a civil debt if the premium levy is not paid as required.
You may also visit the website of IA (www.ia.org.hk/en/levy) for more details.
Levy on Insurance Premium (FAQ)