Vátryggingafelag Íslands : Final proposals by the Board of Directors VÍS 2024

Proposals by the Board of Directors of

Vátryggingafélag Íslands hf.

to be presented at Company's Annual General Meeting on 21 March 2024

Item 2

Proposal to approve the Company's consolidated annual financial statements

The Board of Directors proposes that the Company's consolidated annual financial statements for 2023 be approved.

Further details:

The consolidated annual financial statements for 2023 are available on the VIS website at www.vis.is/fjarfestar. The annual financial statements will be presented by Group CEO Haraldur I. Þórðarson.

Item 3

Proposal on allocation of the Company's profits and the payment of a dividend

The Board of Directors proposes that the Company should pay shareholders a dividend of ISK 0.52 per share for the year 2023, or ISK 1,000 million in total after accounting for treasury shares. The declaration date is 21 March 2024, meaning that shareholders of record at the end of 25 March 2024 (the date of record) are entitled to receive a dividend. The ex- dividend date, i.e. the date on which the shares of the Company start trading without the right to receive a dividend, will therefore be 22 March 2024, and dividends will be paid on 2 April 2024 (the payment date).

Further details:

VIS has defined the Company's risk appetite on the basis of a solvency ratio in the range of 1.35 - 1.70. The Company's dividend policy according to the Board of Directors' policy on capital structure and payments to shareholders provides that at least 40% of the prior year's after-tax profit should be paid to shareholders. Last December, the Board of Directors amended the policy such that the 40% minimum dividend payment criteria can be departed from with reference to plans for the internal or external growth of the Group which are consistent with the Company's stated policy of growth and increasing its sources of revenue. However, the amount of the dividend should never result in a solvency ratio, after the payment of dividends, below the range determined by the Company's risk appetite. The Group's solvency ratio at year- end 2023 is 1.68, but is 1.56 at year-end 2023 taking the proposed dividend into account.

Item 4

Approval of the Company's Remuneration Policy

The Board of Directors proposes that the Company's Remuneration Policy, in the form presented by the Board of Directors in advance of the AGM, be approved.

Further details:

The Company's Board of Directors has undertaken a comprehensive review of its remuneration policy in light of the changes that have taken place at the Company in the past year. Strategic steps have been taken to change the structure of the Company, first with the merger of VIS and Fossar Investment Bank, which was presented for shareholder approval at a shareholders' meeting on 14 June 2023, and then by obtaining the approval of the shareholders for transferring the Company's insurance operations to the subsidiary VÍS tryggingar hf. at a shareholders' meeting on last 17 January. The above will mean that if the transfer of the insurance operations is approved by the Financial Supervisory Authority of the Central Bank of Iceland, the Company will become a holding company that will be subject to certain supervision and

requirements by the Financial Supervisory Authority of the Central Bank of Iceland and will not be considered an insurance company or a financial undertaking.

The proposed changes to the Company's remuneration policy mainly relate to removing references to laws and job titles that concern insurance activities only. The part of the policy that deals with the implementation of the VIS bonus scheme has also been removed. The requirements imposed for granting bonuses, including in terms of maximum amounts and requirements for the suspension of payments, are the same as before, but for clarification purposes, it is stated more clearly that the payment of a bonus may consist of a cash payment, payment in the form of share-based rights such as options to buy shares in the Company, or payment in the form of shares in the Company, or a combination of the above.

As before, the purpose of the Company's bonus scheme is to better align the long-term interests of the Company and its employees, while efforts are also being made to bring the bonus scheme closer to what is customary in the financial industry and adapt the form of bonuses to the rules set forth in Act No. 161/2002 on Financial Undertakings, as recent changes to the provisions of the Act on bonuses include requirements for managing risk by increasing the weight of risk- based rights in bonuses at financial undertakings. It is also proposed that special rules on the granting of bonuses in the form of shares or share-based rights be established and published on the Company's website. As in previous years, the bonus scheme approved by the Board of Directors for the year 2024 includes a general bonus scheme for VIS employees whereby bonuses will be paid to employees in equal amounts in accordance with the Company's overall performance. The maximum bonus according to the scheme is ISK 500,000. Performance criteria have also been approved for a bonus scheme for certain employees of VIS, Fossar and the parent company whereby bonuses are calculated as a percentage of the annual salary, either up to 10% or up to 25% of the total annual salary, depending on the nature of the position.

In accordance with the approved remuneration policy for the year 2023, share option agreements were concluded with employees last October for a term of one year according the approved share option scheme which is based on Article 10 of the Income Tax Act No. 90/2003, see the Company's announcement of 13 October 2023. The existing remuneration policy provides that the Board of Directors is authorised to approve a new share option scheme that will replace the current scheme once it expires. The Board of Directors plans to approve a new share option scheme on that basis for a period of three years. The estimated cost of the share option scheme, based on Black-Scholes calculations, is ISK 153 million over a three-year period, based on the current number of employees.

The role of the Remuneration Committee is discussed in a separate section, and a description is given of the information to be provided about the terms of the share-based rights that may be granted and their pricing as well the information to be provided in the Remuneration Report.

The Remuneration Policy with the aforementioned proposed changes is available on the Company's website.

Item 5

Proposals to amend the Company's Articles of Association

The Board of Directors proposes the following amendments to the Company's Articles of Association:

Proposal I: Proposal to change the name of the Company

It is proposed that the following provision, temporary clause I, be added to the Company's Articles of Association:

"The Board of Directors is authorised to amend Article 1 of the Company's Articles of Association as a result of the Financial Supervisory Authority of the Central Bank of Iceland granting authorisation for the transfer of the Company's insurance portfolio and insurance activities to the subsidiary VÍS tryggingar hf., provided that the amendment is made within 3 months of the Financial Supervisory Authority granting the authorisation, such that Article 1 will thereafter read as follows: "The name of the Company is Skagi." This authorisation is valid until 31 December 2024."

Further details:

The proposal is presented with reference to the application to transfer the insurance activities to a subsidiary. The application is being considered by the Financial Supervisory Authority of the Central Bank of Iceland and it is hoped that the results of the application process will be known around or after the middle of the year. If the proposal is approved, the Board of Directors will be authorised to change the name of the Company without further involvement of the shareholders after authorisation for the transfer of the insurance activities has been obtained. In other respects, reference is made to the presentation material regarding the name change that accompanies the notice of the Annual General Meeting. The proposal essentially entails that the meeting will authorise the Board of Directors to change the name of the Company in accordance with this clause of the Articles of Association on the conditions specified therein.

Proposal II: Proposal to authorise the Board of Directors to increase share capital in respect of the share option scheme and on the waiver of pre-emptive rights

It is proposed that the following provision, temporary clause II, be added to the Company's Articles of Association:

"The Board of Directors is authorised to increase the share capital of the Company in stages by up to ISK 65,000,000 in nominal value, for the purpose of fulfilling the Company's obligations under share option agreements in accordance with the Company's share option scheme which has been confirmed by Iceland Revenue and Customs pursuant to Article 10 of the Income Tax Act No. 90/2003 and/or meeting buy options in respect of the Company's bonus scheme. Newly issued shares shall be in the same class and carry the same rights as other shares in the Company. The newly issued shares will grant rights from the date of registration of the share capital increase and the same provisions shall apply to the newly issued shares as are otherwise provided for in these Articles of Association. This authorisation is valid until 21 March 2029, to the extent that it has not been exercised by that time. The shareholders waive their preemptive rights to the new shares pursuant to the third paragraph of Article 34 of Act No. 2/1995 on Limited Liability Companies. The purchase price of the shares and other terms shall be in accordance with the provisions of the share option agreements and the approved share option scheme. The Board of Directors shall be authorised to make changes to the Company's Articles of Association in connection with the share capital increase according to this authorisation."

Further details:

The proposal goes hand in hand with the Company's Remuneration Policy and primarily serves the purpose of: 1) providing a basis in the Company's Articles of Association for the authorisation of the Board of Directors to conclude agreements with employees on share-based instruments for paying bonuses in accordance with the Company's Remuneration Policy and bonus scheme; and 2) to establish clear limits for this authorisation. According to the Remuneration Policy, authorisations for paying employees in the form of share-based rights, including the issuance of options, must fit within the limits imposed in the Remuneration Policy and applicable law. It is worth noting that under item 11, a request is made for the renewal of the authorisation to repurchase shares which includes an authorisation to use a portion of any shares so repurchased to meet agreements with employees on bonuses and share options. In this way, the Board of Directors is given leeway to assess whether treasury shares or new shares should be used to fulfil such agreements. Payment in the form of share-based rights also limits the authorisation provided under the Remuneration Policy to pay bonuses in the form of cash payments. According to the Remuneration Policy, authorisations for paying employees in the form of share- based rights, including the issuance of options, must fit within the limits imposed in the Remuneration Policy and applicable law. In other respects, reference is made to the Company's Remuneration Policy for further details that are relevant to the Board of Director's proposal.

Item 6

Decision on fees for members of the Board of Directors, sub-committees of the Board of Directors and the Nomination Committee

It is proposed that the monthly fee for members of the Board of Directors should be increased by approximately 3% a month and become ISK 490,000 for regular Board members and ISK 945,000 for the Chairman. Alternate members of the

Board are to be paid a one-time fee of ISK 490,000 at the beginning of the operating year and an additional ISK 132,000 for each meeting attended.

It is proposed that a fixed monthly fee be paid to members of Board sub-committees as set out below, and that committee chairmen be paid double the fee of other members:

For membership of the Audit Committee: ISK 83,000 per month

For membership of the Remuneration Committee: ISK 57,000 per month

For membership of the Risk Committee: ISK 83,000 per month

The fee for members of the Nomination Committee will be unchanged at ISK 95,000 per month and double that amount for the chairman.

Further details:

It is proposed that the fees for members of the Board of Directors should increase by a moderate amount, or about 3%. It is further proposed that the fees for members of sub-committees of the Board of Directors, the Audit Committee, Remuneration Committee and Risk Committee, should change in a similar way. The total cost in respect of fees for members of the Board of Directors, sub-committees of the Board of Directors and the Nomination Committee will increase by 3.12%.

Item 7

Election of the Board of Directors.

According to the Company's Articles of Association, five principal directors and two alternates are to be elected for the coming year of operation. Candidate application forms are available on the Company website. The deadline for submitting candidacies for the VIS Board of Directors expires at 4:00 p.m. on Saturday, 16 March 2024.

The signed form shall be emailed to tilnefningarnefnd@vis.isor delivered at the Company's office at Ármúli 3, Reykjavik within the specified time. Information on candidates for the Board of Directors will be available at the Company websiteno later than two days before the AGM, and will also be available for inspection by shareholders at the Company's headquarters.

Item 8

Election of an auditor

The Board of Directors proposes that PricewaterhouseCoopers ehf. be elected as the auditor of VIS.

Further details:

PricewaterhouseCoopers ehf. was elected as the auditor of VIS at the 2018 AGM and re-elected at the 2019-2023 AGMs.

Item 9

Election of the Nomination Committee

According to the Company's Articles of Association, three members shall be elected to the Nomination Committee for the coming year of operation. Candidate application forms are available on the Company website. The signed form shall be emailed to stjorn@vis.isor delivered at the Company's office at Ármúli 3, Reykjavik. The deadline for submitting candidacies for the VIS Nomination Committee expires at 4:00 p.m. on Saturday, 16 March 2024.

Item 10

Election of a member of the Company's Audit Committee

The Board of Director proposes that Knútur Þórhallsson, id. no. 230465-5419, be elected as a member of the Company's Audit Committee.

Further details:

Following amendments passed by the Icelandic parliament on 31 January 2024 to provisions of Act No. 3/2006 on Annual Accounts, it is now required that external members of companies' audit committees shall be nominated at annual general meetings. The Board of Directors has decided that, as before, one member of the Audit Committee should be an external party, i.e. not a member of the Company's Board of Directors, and the Board of Directors thus proposes that the person nominated should be elected as a member of the Audit Committee at the meeting.

Item 11

Proposal for an authorisation for the Company to repurchase shares.

The Board of Directors presents the following proposal for approval at the AGM:

"The Board of Directors of the Company shall be authorised to purchase, over the next 18 months or to and including 21 September 2025, shares in the Company such that the Company together with its subsidiaries will own, subject to fulfilment of relevant legal requirements, up to 10% of its share capital. The authorisation shall be used for the purpose of i) making a market in the Company, ii) instituting a formal repurchase program, iii) making an offer to shareholders generally for the repurchase of their shares, e.g. by means of a tender offer, provided that the principle of equal treatment of shareholders is observed in issuing such offer. The purpose of repurchase shall only be to reduce the Company's share capital or to meet the obligations in respect of share option agreements concluded on the basis of a share option scheme pursuant to Article 10 of Act No. 90/2003 on Income Tax and paying bonuses to employees under the Company's Remuneration Policy and bonus scheme.

An authorisation to repurchase shares which involves a reduction in the Company's solvency indicators is subject to the approval of the Icelandic Financial Supervisory Authority. The price paid for repurchased shares shall not exceed the price paid in the most recent independent transaction or the highest independent quoted price on Nasdaq Iceland, whichever is higher. However, such purchases are permitted if made by a market maker pursuant to Act No. 115/2021 on Markets in Financial Instruments or in respect of buy-back programmes or stabilisation within the meaning Regulation (EU) No on market abuse, see Act No. 60/2021 on Measures Against Market Abuse.

Previous authorisations to repurchase shares shall be cancelled on the approval of this authorisation. However, such cancellation shall not affect repurchase transactions that have already begun, or have already been initiated, prior to that date."

Further details:

The Board requests new authorisation to repurchase shares. The reduction of share capital following repurchases will not be implemented except with the approval of a meeting of shareholders. Point iv above is closely related to the Company's Remuneration Policy and serves the purpose of inserting a provision in the Company's Articles of Association authorising the Board of Directors to conclude agreements with employees on the basis of a share option scheme pursuant to Article 10 of Act No. 90/2003 on Income Tax and agreements with officers on options and the payment of bonuses in accordance with the Company's Remuneration Policy and bonus scheme.

Before deciding to repurchase shares, the Board of Directors should ensure that the Company's future sustainability is guaranteed, that its solvency ratio remains within the Board's defined risk appetite, and that its liquidity position remains strong.