HIH Insurance failed in 2001, but the dust has yet to settle on one of the most spectacular collapses in Australian corporate history.

A Federal Treasury paper on the HIH Claims Support Scheme shows 82 HIH Group subsidiary companies in Australia have been subject to liquidation; 54 have been finalised, but 28 have yet to be fully liquidated.

The paper also shows liquidator McGrathNicol has conducted about 350 commutations with HIH’s reinsurers, resulting in reinsurance asset recoveries to the HIH estate of $850 million.

“The liquidator has also settled, on a confidential basis, two major litigation claims against HIH’s former directors, auditors and advisers, resulting in substantial returns for creditors,” the Treasury paper says.

Since 2006, when eight HIH subsidiary general insurance companies were placed into schemes of arrangement in Australia – along with four companies in the UK – distributions have been made to creditors of the eight insurers.

At the time of its failure, HIH Group consisted of more than 240 individual companies, of which eight were licensed or formerly licensed general insurance companies incorporated in Australia.

Final recoveries during the liquidation process vary from 11 cents in the dollar to 100 cents.

The largest creditor, the Federal Government, has received payments from the HIH estate of about $318 million, or 44 cents in the dollar.

The paper describes the HIH collapse as a “critical event in the evolution of Australia’s financial system”.

“HIH’s failure was the catalyst for substantial policy reform, notably in the regulation of Australia’s general insurance industry but also in areas as diverse as tort law, corporate governance, audit standards and policyholder protection,” authors Claudio Damiani, Naomi Bourne and Martin Foo say.

“Even today, almost 14 years since its collapse, the ghosts of HIH continue to resonate with policymakers and regulators.”

The Claims Support Scheme started on June 7 2001, three months after HIH was placed into provisional liquidation, initially as a subsidiary of the Insurance Council of Australia, then in 2004 as a company directly controlled by Treasury.

It was most active in its early years. By mid-2004 half of the 10,953 eligible claims had been finalised. By mid-2008 most claims the scheme would receive had been finalised.

The scheme was formally deregistered in April 2013, having made settlements of about $731 million.