From 1 January 2018, the Hong Kong Insurance Authority (IA) will start collecting a premium levy from policy holders in accordance with the law.
Levy Collections Arrangement
The levy rate will start at 0.04% of the insurance premium per policy year and increase gradually to 0.1%. The amount of the levy imposed on each policy will be subject to a cap.
Except for certain policies2 exempt from the levy by law, policy holders of all new or in-force credit insurance policies must pay the levy along with their premium payment. The IA will collect the levy from policy holders via the insurance companies.
The insurance companies will inform policy holders of the arrangement through various channels. Policy holders can contact Atradius Crédito y Caución S.A. de Seguros y Reaseguros for details about the premium levy on their policies. Atradius will inform all existing policy holders in writing. Additionally you may seek to speak to one of our customer representatives vie phone or email. Please dial +852 3657 0700 or email info.hk@atradius.com.
In Phase 1 (1 January 2018 to 31 March 2019), for general insurance policies with annual premiums at or above $5 million, policy holders will pay only $2,000 per policy year.
Details of the levy rates and caps
| Phase 1 | Phase 2 | Phase 3 | Phase 4 | |
|---|---|---|---|---|
| 1 January 2018 to 31 March 2019 |
1 April 2019 to 31 March 2020 |
1 April 2020 to 31 March 2021 |
1 April 2021 onwards |
|
Levy rate |
0.04% | 0.06% | 0.085% | 0.1% |
| Levy cap | $2,000 | $3,000 | $4,250 | $5,000 |
As stated in the law, if a policy holder does not pay the levy as required, the IA may impose on the policy holder a penalty of up to $5,000, and may recover the outstanding levy as a civil debt due to the IA.
A dedicated IA webpage has been set up to explain the premium levy collection arrangement.
Notes:
1 The Insurance (Levy) Regulation and the Insurance (Levy) Order under the Insurance Ordinance (Cap. 41).
2 Reinsurance business, policies underwritten by authorized captive insurers, and marine, aviation and goods-in-transit business are exempt from the levy.