Frequently Asked Questions ("FAQ") for Insurance Authority Levy ("IA Levy")
|What is IA levy?||IA levy is a premium levy imposed by the Insurance Authority, the independent insurance regulator in Hong Kong, to finance its operation. Except for certain policies exempt from the levy by law, policyholders of all new or in-force life insurance policies and general insurance policies (such as travel, motor, property and household insurance) must pay the levy along with their premium payment. The IA will collect the levy from policyholders via the insurance companies.|
|When will the IA Levy be imposed on insurance policies?||IA will collect levy from policyholders through insurers for policies with policy effective date or inception anniversary date on or after 1.1.2018.|
|How can I find out the details of the collection of premium levy of my policy?||Your policy documents including policy schedule and debit notes will show the levy imposed with a statement explaining the introduction of the premium levy. QBE also provides details of the premium levy in our corporate website www.qbe.com.hk. You may also contact your intermediaries for details of the levy.|
|What is the rate of the levy? What policies are exempt for levy?||Starting from 1.1.2018, the IA will collect a levy on insurance premiums from policy holders through insurance companies. The levy rate in the first phase will be 0.04% of the insurance premium and there will be a levy cap. Policy holders must pay the levy in accordance with the law, and insurance companies will inform them of the related arrangements.
Except for certain policies exempted from the levy by law, policy holders of all new or in-force life insurance policies and general insurance policies (such as travel, motor, property and household insurance) must pay the levy along with their premium payment.
|What is inception date?||As defined by the law, "inception date" is the date on which the first premium under the contract becomes payable. Unless otherwise specified, QBE will treat the commencement date of a policy as the inception date.|
|I know that there are some insurers who will pay the levy for customers. Is there similar arrangement in QBE?||Policy holders should pay the levy in accordance with the law. However, individual insurance companies may choose to pay the levy on behalf of their policy holders.
To ensure a smooth transition for the introduction of levy, QBE will settle all premium levy on behalf of customers for all new and renewal policies with inception date (or anniversary date) from 1.1.2018 to 30.9.2018. Customers shall pay the IA levy from 1.10.2018 onward.
|What if I refuse to the premium levy?||If a policy holder does not pay the required levy, the IA may impose on the policy holder a pecuniary penalty of up to HK$5,000. The IA may recover outstanding levy as a civil debt due to it.|
|Can I pay the premium levy directly to the IA?||It is stipulated in the Insurance (Levy) Regulation that policy holders must pay the levy to insurance companies.|
|How are the levy rates determined? Will the IA lower the levy rates in the future?||The law provides for the IA to collect premium levy from policy holders in an incremental approach and with levy caps to reduce the impact on policy holders. Under the Insurance Ordinance, if, during a financial year of the IA, the reserves of the IA, after deducting depreciations and all provisions, are more than twice its estimated operating expenses and there is no outstanding debt, the IA must consult the Financial Secretary with a view to recommending to the Chief Executive in Council a reduction of the levy.|
|Under what circumstances will the levy be refunded to policyholders?||Refund of levy is allowed on a proportional basis if the corresponding premium becomes refundable.|