New statutes were drafted for the Order on July 11, 1944, when Iceland became independent. It may be awarded to both Icelanders and foreigners for achievements in Iceland or internationally.
The President of Iceland is the designated Grand Master of the Order. A five-member council makes recommendations on awards to the Grand Master, who then grants the award. However, the Grand Master may award the Order without recommendations of the Order Council. The Grand Master and the Chairman of the Order Council then sign the Letters Patent, which are given to those who receive the awards.
Classes
Grand Cross, star
Knight's Cross, ribbon
The Order has five classes:
Keðja með stórkrossstjörnu or Collar with Grand Cross, only for heads of state
Stórkrossriddari or Knight Grand Cross
Stórriddari með stjörnu or Grand Knight with Star
Stórriddari or Grand Knight
Riddari or Knight
Insignia
The collar is in gold, consists of links bearing the Icelandic coat-of-arms and blue-enamelled discs bearing the white falcon.
The badge consists of a gilt cross, enamelled in white, with a blue-enamelled central disc bearing the white falcon.
The star is a silver, eight-pointed star. For the Grand Cross class it has the badge of the Order superimposed upon it; for the Commander with Star class it has a blue-enamelled central disc bearing the white falcon.
The ribbon is blue with white-red-white border stripes.
In summary:
Grand Cross - wears the badge on a collar or a sash on the right shoulder, plus a star on the left chest;
Grand Knight with Star - wears the badge on a necklet, plus a star on the left chest;
Grand Knight - wears the badge on a necklet;
Knight - wears the badge on a chest ribbon.
If a holder is promoted to a higher rank, the lower rank's insignia must be returned. The insignia is retained during the recipient's lifetime, but it must be returned to the Icelandic Government on his or her death.