Federal Government insurer Comcover is in dispute with its reinsurers over a $67.5 million compensation settlement from the Pan Pharmaceuticals class action.

The insurer has taken legal advice on the matter, according to last week’s budget papers.

The case dates back to 2003, when the Therapeutic Goods Administration suspended Pan’s licence to make medicine over quality and safety concerns, leading to the group’s collapse.

In 2008 162 parties, including customers and creditors, began a class action that ended in March 2011 with the $67.5 million award against the Federal Government.

“[The Department of] Finance is now in dispute with its reinsurers regarding the amount recoverable through reinsurance arrangements,” the budget papers say.

“Finance has sought legal advice and is pursuing the amount that is considered recoverable.”

Finance is also managing a “cohort of claims” following a High Court decision on superannuation benefits being mis-stated to a government employee.

The budget papers list Comcover’s insurance claims and reinsurance recoveries as contingent liabilities that are unquantifiable.