FAQS
The IA is a regulatory body independent of the Government and the industry. Empowered by the Insurance Ordinance (Cap. 41), the IA's principal function is to regulate and supervise the insurance industry to promote the general stability of the insurance industry and protect policyholders.
Levy is made by the Chief Executive in Council under Section 134 of Insurance Ordinance (Cap. 41). The levy will be imposed on policyholders and collected by insurers to remit to the IA in order to support the operational cost of IA.
The Insurance (Levy) Order will come into operation on 1 January 2018. All policies with policy inception date on/after 1 January 2018 will be required to pay the levy. For all existing policies that premiums are required to be paid, levy will be collected from the Policy Anniversary Date in 2018.
Policyholder must pay levy together with premium.
Policyholder must pay levy together with premium. If the Policyholder does not pay the levy on time, the IA may impose on the policy holder a pecuniary penalty of up to HK$5,000. The IA may recover outstanding levy as a civil debt due to it.
The amount of levy is calculated as a percentage of premium. The levy rates prescribed under The Insurance (Levy) Order on life insurance policies are as follows:
| Policy Date / Policy Anniversary Date begins in the following period |
Levy Rate | Yearly Levy Cap* (HK$) | |
|---|---|---|---|
| Phase 1 | 1 January 2018 - 31 March 2019 (both dates inclusive) |
0.040% | 40 |
| Phase 2 | 1 April 2019 - 31 March 2020 (both dates inclusive) |
0.060% | 60 |
| Phase 3 | 1 April 2020 - 31 March 2021 (both dates inclusive)） |
0.085% | 85 |
| Phase 4 | 1 April 2021 onwards (date inclusive) |
0.100% | 100 |
* Except HKD, other currencies are translated at the exchange rate applicable at the date of the transaction.
Example 1
The next Policy Anniversary Date and Premium Due Date of Ms. Chan’s policy is 1 February 2018. The annual premium of the policy is HK$9,000. In the policy year of 2018 (i.e. Phase 1), the amount of levy payable for the premium due of 1 February 2018 is calculated as follows:
(Required Premium) HK$9,000 x (Levy Rate) 0.040% = HK$3.6
Given that the yearly levy cap in Phase 1 is HK$40 and the calculation result of the amount of levy payable for Ms. Chan’s policy is within the cap level, the amount of levy payable for the premium due of 1 February 2018 is HK$3.6, and the total payable (including premium and levy payable) for Ms. Chan’s policy is HK$9,003.6.
Example 2
The next Policy Anniversary Date and Premium Due Date of Mr. Lee’s policy is 15 March 2018. The annual premium of the policy is HK$150,000. In the policy year of 2018 (i.e. Phase 1), the amount of levy payable for the premium due of 15 March 2018 is calculated as follows:
(Required Premium) HK$150,000 x (Levy Rate) 0.040% = HK$60
However, as the yearly levy cap in Phase 1 is HK$40 and the calculation result of the amount of levy payable for Mr. Lee’s policy exceeds the cap level, the amount of levy payable for the premium due of 15 March 2018 is HK$40, and the total payable (including premium and levy payable) for Mr. Lee’s policy is HK$150,040.
Example 3
The next Policy Anniversary Date of Mr. Cheung’s policy is 12 May 2018 and the monthly premium is HK$15,000. In the policy year of 2018 (i.e. Phase 1), the levy payable are as follows (HK$ applies to all amounts in below table):
| Premium Due Date | Required Premium (1) | Levy Rate | Levy (2) | Total Amount (1)+(2) |
|---|---|---|---|---|
| 12 May 2018 | 15,000 | 0.040% | 6.00 | 15,006 |
| 12 June 2018 | 15,000 | 0.040% | 6.00 | 15,006 |
| 12 July 2018 | 15,000 | 0.040% | 6.00 | 15,006 |
| 12 August 2018 | 15,000 | 0.040% | 6.00 | 15,006 |
| 12 September 2018 | 15,000 | 0.040% | 6.00 | 15,006 |
| 12 October 2018 | 15,000 | 0.040% | 6.00 | 15,006 |
| 12 November 2018 | 15,000 | 0.040% | 4.001 | 15,004 |
| 12 December 2018 | 15,000 | 0.040% | 0.002 | 15,000 |
| 12 January 2019 | 15,000 | 0.040% | 0.002 | 15,000 |
| 12 February 2019 | 15,000 | 0.040% | 0.002 | 15,000 |
| 12 March 2019 | 15,000 | 0.040% | 0.002 | 15,000 |
| 12 April 2019 | 15,000 | 0.040% | 0.002 | 15,000 |
- The yearly levy cap in Phase 1 is HK$40. From 12 May 2018 to 11 November 2018, the total levy payable is HK$36, hence the levy payable on 12 November 2018 is only HK$4.
- The yearly levy cap in Phase 1 is HK$40. Since the total levy payable from 12 May 2018 to 11 December 2018 have been accumulated to the yearly levy cap, Ms. Cheung is not required to pay any levy in the remaining months of the concerned policy year.
No. As stipulated in the Insurance (Levy) Regulation, policyholder must pay the levy to the IA through the insurance company.
We will deduct the required premium and levy from your payment and/or the premium suspense account of your policy. In case your payment and/or the balance of the premium suspense account of your policy are insufficient to pay for both required premium and levy, we will settle the required premium only but not the levy.
Yes. If you selected to pay premiums by automatic payment options, e.g. autopay, dividend, cash coupons and guaranteed annuity payment, we will deduct the required premium and the corresponding levy at the same time (unless it has been rejected by the Policyholder in writing). If you do not accept the aforesaid default arrangement, you may change the payment method to non-automatic payment options to settle the premium and levy.
No. If we have not received your premium payment and advance the premium due by automatic non-forfeiture options (e.g. Automatic Premium Loan, Policy Deposit, etc.) to keep the policy in force according to the policy contract, the corresponding levy on the premium due shall not be settled by the same non-forfeiture option, and you should make the levy payment by other means. Your payment will be used to settle the overdue premiums and interest (if any) first, the remaining balance (if any) will be used to settle the levy.
If you have prepaid premiums under your policy, your may refer to the “Payment Notice” which will be sent to you before the modal premium due date. The levy payable will be specified in the notice.
If you pay premiums by autopay, we will deduct the required premium and the corresponding levy from your bank account at the same time. You may seek advice from the bank or reset the withdrawal limit with the bank.
We will deduct the corresponding levy together with the required premium through autopay. If your withdrawal limit on autopay is not enough to pay the premium and levy at the same time, we suggest you to seek advice from the bank or reset the withdrawal limit with the bank if needed.
No. If you pay the premium without levy, policy will not be terminated. However, if the Policyholder failed to pay the levy in a timely manner, the IA may impose on the Policyholder a pecuniary penalty of up to HK$5,000 and may recover outstanding levy as a civil debt due to it.
Even you pay the premium without levy, in order to protect your policy interest, we still accept your application for addition of riders/policy changes. However, if the Policyholder failed to pay the levy in a timely manner, the IA may impose on the Policyholder a pecuniary penalty of up to HK$5,000 and may recover outstanding levy as a civil debt due to it.
No.