Insurance Authority Levy on Insurance Premium

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Insurance Authority Levy on Insurance Premium

From 1 January 2018, the Insurance Authority (IA) started collecting a levy on premium from policyowners in accordance with the Insurance Ordinance, the Insurance (Levy) Regulation and the Insurance (Levy) Order. The levy rate starts at 0.04% of the insurance premium per policy year and increase gradually to 0.1%. Generally, the amount of the levy imposed on each policy is subject to a cap per policy year. For the purpose of levy, Manulife’s individual insurance policies, group life insurance policies (without medical protection) and Occupational Retirement Schemes are subject to the levy cap for “Long Term Business”; while group life insurance policies (with medical protection) are subject to the levy cap for “General Business”.

Details of the levy rates and caps are set out below (amount in HK$):

Policy Year Date, Policy Effective Date or Policy Anniversary Date Levy Rate Levy Cap (HK$)
Long term Business General Business *

1 January 2018 to 31 March 2019 (both dates inclusive)
0.040% $40 $2,000

1 April 2019 to 31 March 2020 (both dates inclusive)
0.060% $60 $3,000

1 April 2020 to 31 March 2021 (both dates inclusive)
0.085% $85 $4,250

1 April 2021 onwards (date inclusive)
0.100% $100 $5,000

* Group life insurance policies with medical protection are subject to the levy cap for General Business.

If the policy currency is not in Hong Kong dollars, the levy cap as stated above will be converted to the policy currency at an exchange rate as determined by the Manulife from time to time.

Policyowners of all new or in-force insurance policies must pay the levy along with their premium payment. The IA will collect the levy from policyowners via the issuing insurance companies.

The applicable levy rate shall be determined with reference to the policy year date or the policy effective date or the policy anniversary date. The same rate applies throughout the policy year irrespective of whether the policy year straddles more than one levy band and irrespective of the period of coverage by the policy.

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.

As an interim measure, we will pay the levy on your behalf and remit in accordance with the arrangements prescribed by the IA, for a period as determined by us.

For further information, please contact our customer service hotline on 2108 1188 or refer to the FAQ.

Meanwhile, you can access IA webpage (www.ia.org.hk/) for further information on premium levy collection arrangement.