Tryggingarsjóður

Tryggingarsjóður (Icelandic for "Guarantee Fund") is a general term for public funds in Iceland that guarantee or insure payments that would otherwise be unmet due to insolvency or other distress. The term is used for several distinct funds administered under public law and overseen by state authorities. The central idea across these funds is to provide financial protection for parties owed money when the primary payer cannot meet obligations.

One prominent example is the wage guarantee fund, aimed at securing employees' outstanding wages and related compensation if an employer becomes insolvent. Another well-known form is the depositor protection fund, which guarantees bank deposits up to a statutory limit in the event of a bank's failure, helping to maintain financial stability and public confidence.

Funding for these funds typically comes from mandatory contributions or levies paid by sectors covered by the guarantee, such as employers or financial institutions, and may include government support. The funds operate under statutory rules that define eligibility, scope of covered payments, the process for claiming benefits, and the duration of support. They are supervised by appropriate public authorities, often in cooperation with financial regulatory bodies, to ensure solvency and proper administration.

History and development of Tryggingarsjóður reflects Iceland's evolving welfare state and financial safety net, with reforms occurring in response to economic changes and financial crises. In practice, these funds function as a last-resort safety mechanism, complementing other forms of social insurance and regulatory protections.