Social Insurance Administration
Social Insurance for 90 Years
14th August 2026
"The future is now, and we need to think about the social insurance of the future. We need to raise questions about allowances, entitlement accrual, and the legal framework. At the same time, we need to consider incentives for participation in the labour market, the ageing of the population, the interplay between the business sector and the public sector, and how we utilise technology. These are all factors that affect the progress of the system and how we as a society intend to shape the safety net of the future," says Huld Magnúsdóttir, Director General of the Social Insurance Administration, in an article published in Morgunblaðið yesterday. In it, she discusses the origins of social insurance legislation and its development, as well as looking to the future.
Huld Magnúsdóttir, Director General of the Social Insurance Administration.
The occasion is that this year marks 90 years since the Social Insurance Act came into force, and in the same year, the State Social Security Institute was established. Over the years, the social insurance system has evolved and changed in line with a changing society and shifting priorities. Over time, the State Social Security Institute became three institutions: the Social Insurance Administration, Icelandic Health Insurance, and the Directorate of Labour. Initially, the Social Insurance Act covered accident insurance, health insurance, old-age and disability insurance, and unemployment insurance. It can therefore be said that 90 years later, the foundation of social insurance remains the same, although priorities and implementation have changed.
It was great foresight for a small nation to legislate for various types of insurance for its citizens, thus building the foundation of a safety net for those who need it for various reasons. When pensions were first allocated under the new Social Insurance Act in the autumn of 1936, the country's population was just under 160,000, and a total of 942,420 krónur was paid to 5,860 individuals. Now, 90 years later, the population is around 390,000, and allowances from the Social Insurance Administration in 2025 amounted to nearly 250 billion krónur.
Anniversary conference on 30 September
We will commemorate the anniversary on 30 September with a conference that will discuss social insurance in Iceland, reviewing the history, development, and future of the system. The interplay of social insurance with the business sector, trade unions, pension funds, and the academic community will be discussed. There will be international guests from, among others, the OECD, the ISSA (International Social Security Association), the Ministry for Social Policy and Children's Rights of Malta, as well as the directors of social insurance administrations in the Nordic countries. We will provide more details about the conference soon.