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The Insurance Authority (“IA”) is a new insurance regulator independent of the Government of the Hong Kong Special Administrative Region. The objectives of its establishment are to modernize the insurance industry regulatory infrastructure to facilitate the stable development of the industry, provide better protection for policyowners/policyholders, and comply with the requirement of the International Association of Insurance Supervisors that insurance regulators should be financially and operationally independent of the government and industry.

From 1 January 2018 onwards, a prescribed levy on insurance premiums will be payable to the IA by policyowners/policyholders# via authorized insurance companies pursuant to the Insurance (Levy) Regulation and the Insurance (Levy) Order under the Insurance Ordinance (Cap. 41) in order to support the operational cost of the IA. The insurance company will then remit the levy payment to the IA. The levy is calculated as a percentage of premiums on insurance policies. Generally, the amount of levy payable for each policy is subject to a cap per policy year.

#Except for certain policies exempted from the levy by law.

The collection of the levy takes effect from 1 January 2018. As an interim measure, Manulife has been paying the levy on behalf of its policyowners/policyholders for policies underwritten by us in HK.

Starting from the policy year commencing on or after 1 January 2019,
For policyholders of group life insurance policies and Occupational Retirement Schemes:
Manulife will continue to pay the levy on your behalf and remit in accordance with the arrangements prescribed by the IA, for a period as determined by us until further notice.

For policyowners of individual insurance policies:
Manulife will collect levy from policyowners at the same time when premium is paid. Policyowners should pay levy together with premium.

Illustrative examples of levy calculation for individual insurance policies:

Example 1
Annualized premium: HK$80,000
Policy Year Date: 1 April 2017

 

Policy Anniversary Date

Levy Rate

 

Levy Cap (HK$) Levy Payable (HK$) Remarks

1 April 2017

0.000%

-

-

-

1 April 2018

0.040%

$40

$32



Manulife has paid the levy on behalf of policyowners.

1 April 2019

0.060%

$60

$48

Manulife will collect levy from policyowners at the same time when premium is paid.

1 April 2020

0.085%

$85

$68

 

1 April 2021

0.100%

$100

$80

 

 

Example 2
Annualized premium: HK$150,000
Policy Year Date: 15 June 2019

 

Policy Anniversary Date

Levy Rate

 

Levy Cap (HK$) Levy Payable (HK$) Remarks

5 June 2019

0.060%

$60

$60

Manulife will collect levy from policyowners at the same time when premium is paid.

$150,000 x 0.060% = $90, which exceeds the levy cap (HK$60) for the relevant policy year, hence the amount of levy payable on the premium due for the policy year commencing on 15 June 2019 is HK$60.

For new individual insurance policies, policyowners can refer to the Proposal for the amount of levy payable.

For existing policies, policyowners can refer to billing notices (if applicable) regarding the levy payable for their individual insurance policies.

It is the policyowner’s obligation to pay the levy. As stated in the law, if a policyowner does not pay the levy as required in a timely manner, the IA may impose on the policyowner a penalty of up to HK$5,000, and may recover the outstanding levy as a civil debt due to the IA. Manulife may send out reminders to policyowner for outstanding levy and report to the IA for levy outstanding for more than 6 months.

However, overdue levy payment will not impact the policyowner’s right on his/her insurance policy or result in policy lapse.

No. It is stipulated in the Insurance (Levy) Regulation that policyowners/policyholders must pay the levy to insurance companies.

Levy will be collected from the policyowner along with the payment of the corresponding premium. Unless specified otherwise, where the premium is settled according to the terms of the policy and/or the instruction of the policyowner through, including without limitation, direct debit from an account specified by the policyowner, deduction from premium dump-in facility, accumulated dividends and/or other entitlements available to the policyowner, automatic premium loan and/or other automatic premium payment options, the levy corresponding to the premium so collected shall be collected at the same time and in the same manner.

Unless indicated otherwise, Manulife will deduct the corresponding levy together with the required premium through autopay. If the withdrawal limit on autopay is not enough to pay the premium and levy at the same time, policyowner is suggested to seek advice from the bank or reset the withdrawal limit with the bank if needed.

(i) Yes. Unless indicated otherwise, any outstanding levy will be deducted from the claims payments upon death claim and claims where the relevant policy will be terminated due to such claim payment.

(ii) Yes. Unless indicated otherwise, any outstanding levy will also be deducted from policy surrender value or maturity benefits.

Yes. Manulife still accepts his/her application for the addition of riders/policy changes if the payable levy is not paid by the policyowner. However, it is the obligation of policyowner to pay the levy in accordance with the Insurance (Levy) Regulation and the Insurance (Levy) Order under the Insurance Ordinance (Cap. 41).

Yes, levy paid by the policyowner will be fully refunded for policies that are cancelled within cooling off period, irrespective of whether the premium is fully refunded.

To notify policyowners of the new levy arrangement, mass communication has been arranged during the mid of October 2018 to January 2019. Existing policyowners of individual insurance policies will receive communication through SMS, email or mail per the record kept in the Manulife system.

Policyowners/Policyholders can contact Manulife customer service hotline at 2108 1188. Policyowners/Policyholders can also access the IA’s webpage (www.ia.org.hk) or contact the IA’s hotline at 3899 9983 for further information on premium levy collection arrangement.

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