The Insurance Regulatory & Development Authority (IRDA), balancing the interests of policyholders and insurance companies accused of taking a big cut of the premium pie as charges from customers, is planning to walk the wedge between the two by partially easing its norms concerning mortality charges.

Last month the regulator had mandated an overall ceiling on all charges put together for Unit Linked Insurance Plans(Ulips) in which life cover is mixed with returns from investments in instruments like mutual funds.

The new norms stated that for policies involving a tenure of up to 10 years, the difference between gross and net returns (after deduction of charges) shall not exceed 300 basis points (3 percentage points) of which fund management charges shall not exceed 150 basis points. For policies whose tenure is more than 10 years, the difference between gross and net yields shall not exceed 225 basis points, of which the fund management charges shall not exceed 125 basis points.

Typically, in case of a 10-year policy, if there is a return of 15 percent, policyholders should get at least 12 percent and the insurer not more than 3 percent.