You are welcome with your UAV in Iceland.
Maximum take-off weight: In build op areas not heavier then 3 kilo. Outside not heaver then 25 kilo.
Maximum hight: 120 meters / 393 ft. And also set this limit on your controller.
Maximum horizontal distance: Always In visual line of sight.
Insurance: De Icelandic transport agency recommend a insurance
Minimum age: -
Fireproof tag: Obligated, order it here fast and cheap.
Distance Airports / Heliports: Keep 2 km / 1.2. mi away from the airports (Keflavík, Akureyri, Reykjavík, and Egilsstaðir),
for other Airports the distance is 1.5 km 0.9 mi.
If you want to fly closer, you need permission from the Control Tower of the Airport concerned.
But come on ... Just stay far away from Airports!
Night flights: Prohibited
Permission: In National Parks you must have a written permission from the park administration before you fly.
There is a form available for: Vatnajökull National Park
Prohibited: Not above breeding areas (Bird Rocks), not above crowds, houses, vehicles, firefighters, ambulances etc.
Useful link: https://www.icetra.is/aviation/drones/
Contact information: email@example.com / +354 480 6000