Under the Insurance (Levy) Order and Insurance (Levy) Regulation, starting from 1 January 2018 the Insurance Authority (“IA”) will collect a levy on insurance premiums from policy holders through insurance companies. The levy rate in the first phase will be 0.04% of the insurance premium and there will be a levy cap. Policy holders must pay levy in accordance with the law. If a policy holder does not pay the levy as required, the IA may impose on the policy holder a penalty of up to $5,000.

Scope of the levy

Except for certain policies exempted from the levy by law^**, policy holders must pay the levy along with their premium payment.

(^**Reinsurance business, policies underwritten by authorized captive insurers, and marine, aviation and goods-in-transit business are exempt from the levy.)

Levy rates and cap

The levy rate will start at 0.04% of the insurance premium in Phase 1, and increases gradually until it reaches 0.1% in Phase 4, as shown in the following table:

For further information, please visit https://www.ia.org.hk/en/infocenter/faqs/faqs_levy.html or call us at 28905940.

Useful Link: Insurance Authority https://www.ia.org.hk/.