Bangalore: Unit-linked insurance plans (Ulips) could see a 150 basis points (bps) rise in returns. The Insurance Regulatory and Development Authority (IRDA) has put an overall cap on charges all charges levied in unit-linked policies (Ulip) with effect from October 1 for new policies. IRDA's decision is fallout of a vehement attack on Ulips by mutual funds, which compete with insurers. Since mutual funds have to stick to ceilings on charges laid down by the Securities and Exchange Board of India (SEBI), fund houses felt they were at a serious disadvantage compared to insurance companies. Ulip charges have been capped at 300 basis points for insurance contracts up to 10 years and 225 basis points for contracts over 10 years. If a fund earns a yearly return of 15 percent, a policyholder has to get a minimum return of 12 percent. The ceilings will come into force from October this year. R Kannan, Member, IRDA said, "The move will usher in greater transparency, making it a more attractive choice for customers. It will also bring in discipline in expenditure management by insurers." Currently, Ulip charges on an average work out to around 375 basis points. As most products have an average tenure of 13-15 years, the return to the policyholder could go up by 150 basis points. But reactions were mixed from insurers. TR Ramachandran, CEO and MD, Aviva India said, "Lower charges on products with a longer term will provide further impetus to long-term policies." Whereas, Rajesh Relan, MD, MetLife India Insurance said, "We will have to examine the impact on all customer segments since the mortality charges are not uniform and vary with age. We would not like one segment of the customer subsidising the other." Nitin Chopra, CEO, Bharti AXA Life Insurance, too said that including mortality charges in the overall charge cap may adversely impact customers, especially those who are aged.