Hong Kong Insurance Premium Levy - FAQ
The Independent Insurance Authority (IIA), the new Hong Kong insurance regulator which replaces the Office of the Commissioner of Insurance (OCI), is introducing a levy on insurance premiums issued in Hong Kong from 1 January 2018.
The purpose of the new levy is to fund the operations of the Independent Insurance Authority (IIA), which is financially and operationally independent from the government.
Approximately 70% of IIA expenditure will be met by income from the new levy.
The new levy will be effective from 1 January 2018.
In 2018 the levy will be set at 0.04% of the total insurance premium due. A cap of HKD 2,000 will apply.
If 0.04% of the total premium due is greater than the cap, then HKD 2,000 will be payable.
The Independent Insurance Authority (IIA) will issue guidelines to illustrate how to calculate the levy payable.
The levy will be introduced on an incremental basis, so the levy will gradually increase each year between 2018 and 2021, rising to 0.1% of the total premium due.
Further details of the increment can be found in the table below.
The same levy rate (and cap) apply to both individual and group General Insurance Business.
A different levy cap applies to Long Term/ Life Business versus General Insurance Business.
As an international health insurance provider, the General Insurance Business cap applies to Now Health International plan premiums. The General Insurance Business cap for 2018 is set at HKD 2,000.
The cost of the levy will be passed on to customers. The levy will be clearly marked on their premium invoice.
No. If your client purchases or renews a premium with us, with a commencement day on or after the 1 January 2018, then the levy will be automatically added to their premium invoice. The levy will be clearly marked.
Yes. The date of inception (for new business) and renewal (for existing members) will determine the applicable levy rate and cap.
Commission will continue to be paid on the premium net of tax.
Yes. If a premium adjustment is made during a policy year, an additional levy or refund will need to be made.