Premium levy rate to be adjusted on 1 April 2019
31 March 2019
In accordance with the schedule set out in the Insurance (Levy) Order under the Insurance Ordinance (Cap. 41), starting from tomorrow (1 April 2019), the premium levy rate will be adjusted to 0.06% of the insurance premium per policy year, with the levy cap set at $60 for life insurance policies and $3,000 for general insurance policies.
Except for certain policies1 that are exempt from the levy by law, policy holders of all new or in-force life insurance policies and general insurance policies (such as travel, motor, property and household insurance) have to pay the levy along with their premium payment. The Insurance Authority (IA) collects the premium levies from policy holders via the insurance companies.
The Insurance Ordinance provides for the IA to collect premium levies from policy holders, authorization fees from insurance companies, and fees from users for specific services to finance its operations. To mitigate the impact on policy holders, an incremental approach has been adopted, whereby the premium levy rate is adjusted gradually from 0.04% upon introduction on 1 January 2018 until it reaches the target rate of 0.1% on 1 April 2021. For further information about the premium levy, please refer to the leaflet and the FAQ on the IA website.
Ends
Note:
1Reinsurance business, policies underwritten by authorized captive insurers, and marine, aviation and goods-in-transit business are exempt from the levy.