With effect from 1 January 2018, if a contract of insurance relates to a prescribed class of insurance business or a type of contract of insurance, a prescribed levy is payable to the Insurance Authority ("IA") for the contract by its policyholder.

The levy rates prescribed under the Insurance (Levy) Order are follows:

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A policy inception date*, or a policy inception anniversary date
(as the case maybe) which marks the beginning of a policy year
Rate % General Business and Class I policies of specific business nature (maximum levy) Long Term Business, except policies of specific business nature (maximum levy)
From 1 January 2018 till 31 March 2019 (both dates inclusive) 0.040% $2,000 $40
From 1 April 2019 till 31 Mar 2020 (both dates inclusive) 0.060% $3,000 $60
From 1 Apr 2020 till 31 March 2021 (both date inclusive) 0.085% $4,250 $85
From 1 Apr 2021 onwards (date inclusive) 0.100% $5,000 $100

*Inception date, in relation to a contract of insurance, means the date on which the first premium under the contract becomes payable

Commencement date for collection of levy is 1 January 2018. For a general individual policy with annual premium of HK$10,000 with an inception date of 1 Jul 2017, the following would apply:

    Applicable Levy Rate (%) Maximum Levy (HKD) Levy Payable (HKD)
(Annual Premium x Applicable Levy Rate)
Inception date 1.7.2017 - - - -
1st anniversary date 1.7.2018 0.040% 2,000 4 Below max levy
2nd anniversary date 1.7.2019 0.060% 3,000 6 Below max levy
3rd anniversary date 1.7.2020 0.085% 4,250 8.5 Below max levy
4th anniversary date 1.7.2021 0.100% 5,000 10 Below max levy

You may want to refer to the website of IA (www.ia.org.hk) for further details as regards collection of levy on insurance premium.