What is the Insurance Authority (“IA”)? What is Premium levy and why do I need to pay a levy?

The Insurance Authority (“IA”) is a new insurance regulator independent of the Government. The objectives of its establishment are to modernise the regulatory infrastructure to facilitate the stable development of the Hong Kong insurance industry, provide better protection for 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.

IA has to be financially independent and recover its operating costs through the collection of premium levies payable by policyholders and fees payable by insurance companies, designated insurance holding companies, intermediaries, and users for specific services.

Starting from January 1, 2018, the Insurance Authority has authorized insurance companies to charge policyholders a premium levy in accordance with the Insurance (Levy) Ordinance and the Insurance (Levy) Regulation. As of April 1, 2021, the levy rate will be increased to 0.1%, with a cap on the levy amount.

For further information, please visit https://www.ia.org.hk/en/aboutus/role/financial_arrangements.html