The Oracle vs. The LAW: Legal Challenges for Romanian InsurTech

By Camelia Iantuc & Sandra Danciu, Filip & Company

Romania is rapidly emerging as a hub for InsurTech innovation, with startups transforming the insurance landscape through smart contracts, parametric policies, and decentralized oracles. 

These innovations promise faster claims, lower operational costs, and more transparent risk management; however, success requires more than technology alone. Founders and investors must also navigate the legal and regulatory frameworks to scale effectively and remain compliant in 2026 and beyond.

1. Lack of a formal sandbox

Unlike other jurisdictions, like the United Kingdom, Romania does not yet have a full-fledged regulatory sandbox for Insurtech, although the Financial Supervisory Authority (the “FSA”) in Romania has announced its intention to create one since as early as 2019. Instead, the FSA has launched the Fintech Hub which is aimed to support startups by providing a platform where companies boasting innovative insurance models can engage in dialogue with the regulator to clarify the applicable laws, licensing steps and the regulatory exceptions. 

While the Fintech Hub offers a single point of contact and guidance, it does not exempt companies from compliance with regulations, thus Insurtech startups must comply with all requirements from day one, which can slow down their appetite for experimentation. A pilot cannot be easily launched to a test market segment without full compliance with the regulatory framework, which might drive the startups to either test their products in other jurisdictions or to operate in Romania as suppliers to licensed insurers.

Nonetheless, the authority’s openness to dialogue is a positive sign and it can help the Insurtech companies understand where their product is likely to be categorized and what rules would be applicable to it. Through constructive dialogue with the Insurtech companies seeking informal guidance or clarifications, it is likely that the FSA might use flexibility within existing laws to accommodate new models, which can help de-risk the compliance side of innovation.

2. The indemnity paradox

In Romania, non-life insurance operates under the principle of indemnity, which means insurance is designed to restore the policyholder to the financial position they were in before a loss occurred - no more, no less. Compensation cannot exceed the actual value of the damaged asset or the real loss suffered.

This principle creates a unique challenge for the adoption of parametric insurance products, which are still relatively rare in the Romanian market. Parametric insurance offers fixed, pre-agreed payouts when certain predefined events occur, regardless of the actual damage. 

For example, a parametric crop insurance platform may pay a fixed EUR 10,000 if rainfall falls below a certain threshold, regardless of the actual damage suffered. If the farmer’s real loss amounts to only EUR 5,000, a Romanian court may classify the excess payout as a wager or unjust enrichment, potentially rendering the underlying insurance agreement unenforceable.

To mitigate this risk, parametric insurance products seeking to be introduced on the Romanian market would need to be carefully structured to align with the indemnity principle. Parametric models may incorporate pre-determined payout structures based on statistically validated loss expectations or they may incorporate mechanisms for post-event loss verification to address this challenge. It should be noted that even in such cases, courts retain authority to adjust amounts considered “manifestly excessive”. By grounding payouts in realistic loss scenarios, smart contracts and automated claims mechanisms can operate efficiently while remaining legally sound, providing predictable and enforceable compensation within the framework of Romanian law.

3. The proof of loss requirement

InsurTech platforms often rely on automated data sources, including data oracles or even satellite imagery, to verify insured events. Romanian law, however, requires that the insured party demonstrate both the occurrence of the event and the extent of the loss.

For example, under a parametric insurance product triggering a payout solely by a weather station reporting a drought may be challenged if the policyholder’s crop loss is partial. In such cases, Romanian courts may require additional verification, such as an official report or on-site assessment – an approach that runs counter to the efficiency and speed at the core of automated InsurTech solutions.

To maintain both efficiency and legal compliance, Insurtech platforms operating in Romania may however explicitly recognize digital data as valid proof of loss within the insurance agreement, either by indicating specific digital data sources (such as meteorological data, satellite indices or sensor outputs); such data sources may provide greater legal certainty and reduce disputes, especially if the designated data sources are reliable, independently verifiable and clearly referenced. This allows claims to be processed quickly and reliably, provides clarity on what constitutes acceptable evidence, and ensures enforceability under Romanian law. 

4. The digital signature mirage

While electronic signatures are becoming a cornerstone of digital insurance operations, their legal validity depends on meeting specific standards. In Romania, Law no. 214/2024 on the use of electronic signatures, electronic time‑stamps and the provision of trust services fully aligns national regulations with the European eIDAS framework, defining three levels of signatures with increasing legal weight: simple electronic signatures (SES), advanced electronic signatures (AdES), and qualified electronic signatures (QES). While simple and advanced electronic signature may be suitable for everyday transactions, only a qualified electronic signature is automatically treated as equivalent to a handwritten signature, offering full legal enforceability.

This distinction is particularly important for high-value insurance agreements. Simple “click-to-accept” signatures may suffice for smaller policies, but for coverage involving homes, vehicles, or life insurance, they carry considerable legal risk. In the event of a dispute, the validity of simple or advanced electronic signatures may need to be proven through technical expertise, whereas a qualified electronic signature presumes authenticity, shifting the burden of proof to the party challenging it.

Beyond enforceability, a qualified electronic signature offers key protections for InsurTech platforms, as it prevents signers from denying their signature, and ensures the document has not been altered. For platforms seeking to scale securely, adopting qualified electronic signatures is more than a compliance measure - it establishes trust, operational efficiency, and a foundation for cross-border growth.

Ultimately, Romania presents enormous opportunities for InsurTech innovation, but success depends on aligning technology with legal and regulatory requirements. By addressing indemnity, proof of loss, and electronic signature standards, startups can offer fast, efficient, and fully compliant insurance solutions.

Looking ahead, the most successful platforms will be those that combine cutting-edge technology with legal certainty, therefore delivering insurance experiences that are not only seamless for clients but also fully secure under Romanian law.