Premium Levy

Collection of Premium Levy by the Insurance Authority

From 1 January 2018, the Insurance Authority (“IA”) will start collecting a premium levy (“levy”) from policyholders through insurance companies in accordance with the Insurance (Levy) Regulation and the Insurance (Levy) Order under the Insurance Ordinance (Cap. 41). The levy rate will start at 0.040% of the insurance premium per policy per policy year and increase gradually to 0.100% (subject to the IA’s latest announcement). The amount of the levy imposed on each policy per policy year will be subject to a cap.

Except for certain policies (including reinsurance business, policies underwritten by authorized captive insurers, and marine, aviation and goods-in-transit business) exempt from the levy by law, policyholders of all new or in-force life insurance policies and general insurance policies (such as travel, motor, property and household insurance) must pay the levy along with their premium payment.

The levy rates and cap of life insurance policies and general insurance policies are as follows:

  Policy Date / Policy Anniversary Date
begins in the following period		 Levy Rate Life Insurance Policies
Yearly Levy Cap (HK$)*		 General Insurance Policies
Yearly Levy Cap (HK$)
Phase 1 1 January 2018 - 31 March 2019
(both dates inclusive)		 0.040% 40 2,000
Phase 2 1 April 2019 - 31 March 2020
(both dates inclusive)		 0.060% 60 3,000
Phase 3 1 April 2020 - 31 March 2021
(both dates inclusive)		 0.085% 85 4,250
Phase 4 1 April 2021 onwards(date inclusive) 0.100% 100 5,000

* Except HKD, other currencies are translated at the exchange rate applicable at the date of the transaction.
You can also visit IA’s official website at www.ia.org.hk for details

 

 

China Life (Overseas)’s Life Insurance Arrangement on Levy

 

To assist the Policyholder of life insurance policies to remit the levy to IA, China Life (Overseas) applies the following rules on the life insurance policies with effect from 1 January 2018:

  1. We will deduct the required premium and levy from the payment and/or the premium suspense account of the policy. In case the payment and/or the balance of the premium suspense account of the policy are insufficient to pay for both required premium and levy, we will settle the required premium first.
  2. If Policyholder makes the payment for levy, we will settle the oldest outstanding levy first (if any).
  3. If Policyholder has selected an automatic payment option (e.g. autopay, dividend, cash coupons or guaranteed annuity payment) to settle the premium of the policy, the corresponding levy on the premium shall be settled by the same payment option.
  4. If we have not received the 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 Policyholder should make the levy payment by other means. The 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.
  5. If Policyholder have prepaid premiums under the policy, he/she may refer to the “Payment Notice” which will be sent before the modal premium due date. The levy payable will be specified in the notice.

 

 

Below is the Frequently Asked Questions (including the administrative procedures) on the collection of levy on life insurance policies.

FAQs - Premium Levy