"We would be regulating a dynamic and creative industry, in which new products and trading mechanisms are developed overnight," said IRDA member (non-life) H Ansari. Outlining some of the immediate action plans of IRDA soon after the authority has been notified by the Government, Ansari said as a regulator IRDA is committed to be creative and fast moving. The authority will come up with new approaches for addressing the challenges prsented by the domestic insurance market.

"The markets are changing. The IRDA should take care not to answer every innovation with a new regualtion. As a regulator, it should encourage legitimate changes and improvements, not stifle them," Ansari said adding that the authority's disclosures and accounting standards will continue to to evolve. The present structure is showing signs of wear. The existing practices are sometimes less than precise; auditors are sometimes less than vigilant. Also technology is creating new challenges, Ansari pointed out.

The IRDA has been given the onerous responsbility to regulate and develop one of the most innovative industries whose main commodity-capital-is footloose, he pointed out.

As a first step, the authority will work with the insurance industry to ensure that the regulation faclitates market innovation while it protects policy holders.

Ansari assured that the authority will work with industry to adress changes as they evolve, rather than mere responding after they have happened. By working with industry as it innovates and incorprates new tecnology, the authority can gain the information we need for effective overview, he said.

The second approach of IRDA is to change, constantly reappraise regulation and discard what does not work, either because the burden outweighs the benefits or because it becomes outdated and no longer meets our needs and the needs of the policy holders, he said.

It will be IRDA's duty to keep the regulatory structures simple, clear and up-to-date, he suggested.

The final step of this three-part change is to redouble the efforts to work together internationally to meet the growing demands to today's complex markets, Ansari concluded.

Emphasising the process of change, Ansari said the controls and systems that are in place at some firms today were created in another area. These aniquated models must be replaced with new model that includes ongoing training throughout the company, documented policies and procedures that all professionals must be required to be familiar with, an effective monitoring system and quality controls, internal an external testing of compliane withthe system, including selective testing of individal data, an effective disciplinary mechanism.

Warning about fudging of balancesheets by competing players to meet the forecasts, Ansari said, the authority will deter some members of corporate managment who are tempted to play the numbers game.

According to Ansari, the International Association of Insuarnce Supervisors has been working to develop a common worldwide for financal reporting.

On this basis, IRDA is actively considering how it can join together to ensure that the indutry has high quality, public oriented, independent units that guarantee credible financial reporting for investors, markets and policyholders. "This is as much a concern for the profession as it is for regulators," said Ansari.