Klaipėdos universitetas

Risk management is one of the most critical and important areas that affects every insurance company’s activity and development. The goal of the research is to identify and establish the most important parts of risk management with the aim to improve the insurance company’s reliability with the risk self-assessment. Also risk management is one of the most significant functions under Solvency II Directive framework. The methods chosen for conducting the research are: literature exploring, comparative methods, modeling, analysis, methods of expert evaluation.

The 2008 global economic and financial crisis hit hard in Iceland. During the crisis its three largest banks all collapsed in just a few days with severe consequences for the economy and the people. Prior to the crisis, Iceland, a high income OECD country, had experienced strong growth and unprecedented expansion in overseas investments and activities, especially in the financial sector. This article focuses on the actions of the international community when the Icelandic authorities, during a period of great uncertainty, sought assistance to protect the Icelandic economy before the banking system fell. The methodology used in this article is the case study method. Compared to other research methods, a case study enables the researcher to examine the issues involved in greater depth. Arguably, the governments of the Netherlands and the UK tried to fake reality by suggesting that the Icelandic government, i.e. Icelandic taxpayers, should be made responsible for paying the debts of private banks. The EFTA Court ruling confirms that Iceland did not have this responsibility. In retrospect one can argue that the EU showed dishonesty by supporting the Netherlands and the UK in demanding a sovereign guarantee for failed private banks. The Icelandic banking expansion exposed weaknesses in EU integration and may also confirm a certain incompetence within the EU in designing an EU-wide banking system.