6

Insurance Authority Levy

With effect from 1 January 2018, the Insurance Authority (IA) has imposed Insurance Authority Levy (“IA Levy”) on all insurance policies under specified levy rates (except for certain exempted insurance classes). The IA Levy is remitted in accordance with the prescribed arrangements. Policyholders and customers should pay the levy in accordance with the law.

The following table outlines the applicable levy period, rate and cap.

Policy inception date Levy rate Cap (HKD)
From 1 January 2018 till 31 March 2019 (both dates inclusive) 0.04% 2,000
From 1 April 2019 till 31 March 2020 (both dates inclusive) 0.06% 3,000
From 1 April 2020 till 31 March 2021 (both dates inclusive) 0.085% 4,250
From 1 April 2021 onwards (date inclusive) 0.1% 5,000

Reinsurance businesses, marine, aviation and goods in-transits policies and policies underwritten by authorized captive insurers are exempt from IA Levy.

For further details of the IA Levy, please refer to the frequently-asked-questions below or visit www.ia.org.hk.

Frequently Asked Questions

IA levy is a premium levy imposed by the Insurance Authority, the independent insurance regulator in Hong Kong, to finance its operation. Except for certain policies 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 IA will collect the levy from policyholders via the insurance companies.
IA will collect levy from policyholders through insurers for policies with policy effective date or inception anniversary date on or after 1 January 2018.
Your policy documents including policy schedule and debit notes will show the levy imposed with a statement explaining the introduction of the premium levy. QBE also provides details of the premium levy in our corporate website qbe.com/hk. You may also contact your intermediaries for details of the levy.
Starting from 1 January 2018, the IA has imposed a levy on insurance premiums from policyholders through insurance companies. The levy rate in the first phase will be 0.04% of the insurance premium and there will be a levy cap. Policyholders must pay the levy in accordance with the law, and insurance companies will inform them of the related arrangements.
Except for certain policies exempted 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.
As defined by the law, "inception date" is the date on which the first premium under the contract becomes payable. Unless otherwise specified, QBE will treat the commencement date of a policy as the inception date.
Policyholders should pay the levy in accordance with the law. However, individual insurance companies may choose to pay the levy on behalf of their policyholders.
If a policyholder does not pay the required levy, the IA may impose on the policyholder a pecuniary penalty of up to HK$5,000. The IA may recover outstanding levy as a civil debt due to it.
It is stipulated in the Insurance (Levy) Regulation that policyholders must pay the levy to insurance companies.
The law provides for the IA to collect premium levy from policyholders in an incremental approach and with levy caps to reduce the impact on policyholders. Under the Insurance Ordinance, if, during a financial year of the IA, the reserves of the IA, after deducting depreciations and all provisions, are more than twice its estimated operating expenses and there is no outstanding debt, the IA must consult the Financial Secretary with a view to recommending to the Chief Executive in Council a reduction of the levy.
Refund of levy is allowed on a proportional basis if the corresponding premium becomes refundable.