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** LEVY ON INSURANCE PREMIUM **


  

 Levy on insurance premium

 

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:

 

 

 

Phase 1

 

 Phase 2

 

 Phase 3

 

 Phase 4

 

 

 1 January 2018 to              31 March 2019

 

1 April 2019  to                 31 March 2020

 

1 April 2020   to                 31 March 2021

 

1 April 2021 onwards 

 

Levy Rate

 

 0.04%

 

 0.06%

 

 0.085%

 

 0.1%

 

Levy cap

General Insurance

 $2,000

 $3,000

 $4,250

 $5,000

 

 

 

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/.