HONG KONG: Large insurance companies operating in Hong Kong may face higher annual fees if a government proposal to link charges to premium income is adopted, the South China Morning Post reported.
The report quoted Insurance commissioner Benjamin Tang as saying that the commission would consult the market about the proposals but had not yet set a date.
“The fixed-fee structure is outdated and not keeping up with international trends,” Tang said, adding that “it is also unfair to the small insurance companies.”
All insurers operating in Hong Kong are now paying HK$227,300 for each licence, regardless of their size or volume of business.
“Many overseas countries have linked licence fees to premium income. Hong Kong may follow suit to adopt a fairer fee structure,” Tang said.
He said the commission was considering a model under which insurers would end up paying more as their premium income rises, but there would be a cap at the top end to ensure large players did not pay excessively high fees. – AFX