The Hong Kong Insurance Authority (IA) has launched a consultation on increasing annual fees for authorized long term insurers and raising the premium levy cap for holders of long term policies. The proposals address funding caps that have constrained regulatory income as the insurance market expanded. Policies reaching the levy cap accounted for 77% of long term premiums in 2026, compared with 25.7% in 2009. For long term insurers, the variable component of annual fees would rise from 0.0039% to 0.0042% of insurance liabilities, with its cap increasing from HKD 7 million to HKD 28 million. Based on liabilities at Dec. 31, 2025, insurers already reaching the cap would face annual fee increases of 15% to 240%, compared with 7.7% for those below it. The changes would generate approximately HKD 70 million in additional annual fee income. For long term policyholders, the premium levy cap would increase from HKD 100 to either HKD 500 or HKD 1,000, while the levy rate would remain at 0.1%. About 9% of policyholders would be affected, paying up to HKD 400 or HKD 900 more under the respective options. The higher option would allow the IA to accumulate reserves to smooth fluctuations in income. Subject to Legislative Council approval, the annual fee amendments are expected to take effect in July 2027 and the premium levy amendments in January 2028.
Hong Kong Insurance Authority consults on raising long term insurer fee cap to HKD 28 million and increasing policy levy caps
The Hong Kong Insurance Authority is consulting on higher annual fees for long term insurers, including quadrupling the variable fee cap to HKD 28 million. It also proposes raising the levy cap for long term policies from HKD 100 to HKD 500 or HKD 1,000, retaining the 0.1% levy rate. Subject to Legislative Council approval, the fee changes are expected in July 2027 and the levy changes in January 2028.