Levy on Insurance Premium

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.

contract signing

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.
 

Disclaimer

Each publication available on or from our websites, such as, but not limited to webpages, reports, articles, publications, tips and helpful content, trading briefs, infographics, videos (each a “Publication”) is provided for information purposes only and is not intended as a recommendation or advice as to particular transactions, investments or strategies in any way to any reader. Readers must make their own independent decisions, commercial or otherwise, regarding the information provided. While we have made every attempt to ensure that the information contained in any Publication has been obtained from reliable sources, Atradius is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information in any Publication is provided ’as is’, with no guarantee of completeness, accuracy, timeliness or of the results obtained from its use, and without warranty of any kind, express or implied. In no event will Atradius, its related partnerships or corporations, or the partners, agents or employees thereof, be liable to you or anyone else for any decision made or action taken in reliance on the information in any Publication, or for any loss of opportunity, loss of profit, loss of production, loss of business or indirect losses, special or similar damages of any kind, even if advised of the possibility of such losses or damages.