Collection of Premium Levy
The Premium Levy will be effective on 1 January, 2018
Payment and Remittance
The Insurance Authority (IA) will collect a levy on insurance premium from policy holders through insurance companies. Policy holders must pay the levy in accordance with the law at an applicable rate and insurers will remit the sum payable with prescribed arrangements to the IA during a specified period of time.
An incremental approach will be adopted for introducing this premium levy. The levy rate will start at 0.04% and gradually increase on a yearly basis until it reaches the target level of 0.1%.
A cap will be imposed on the premium levy on general insurance policies with annual premiums at or above HK$5 million and long term policies with single or annualised premiums at or above HK$100,000. On full implementation when the levy rate hits 0.1%, the cap for the long term policy will be HK$100 and that for general policy will be HK$5,000.
Details of the levy rates and caps are set out below:
|Phase||Period||Levy Rate||Levy Cap on General Insurance||Levy Cap on Life Insurance|
|Phase 1||From 1 Jan 2018 to 31 March 2019 (both dates inclusive)||0.04%||$2,000||$40|
|Phase 2||From 1 Apr 2019 to 31 March 2020 (both dates inclusive)||0.06%||$3,000||$60|
|Phase 3||From 1 Apr 2020 to 31 March 2021 (both dates inclusive)||0.085%||$4,250||$85|
|Phase 4||From 1 Apr 2021 onwards (inclusive of that date)||0.1%||$5,000||$100|