The Pennsylvania Property and Casualty Insurance Guaranty Association is often a subdued place where the number of phone calls from policyholders on a given day can be fewer than the number of words in its name.

Toss those metrics out the agency's 18th-story window on days like Tuesday, when talk of bankruptcy involving industry giant American International Group prompted a flood of what-if calls about unpaid claims.

By yesterday the turbulence surrounding AIG's fate had calmed with news of a government-arranged bailout, an outcome that had a trickle-down effect among AIG policyholders.

Still, it remained an opportune time for the state Insurance Department and the Philadelphia-based PPCIGA to explain why bankruptcy or not, Pennsylvanians shouldn't worry.

A policy claim involving any liquidated property and casualty carrier is covered up to $300,000, according to state statute that also required the industry to create a guaranty association. Prepaid premiums are covered up to $10,000. Similar groups are set up in most if not all states.

Those numbers spell welcome news to the thousands who carry insurance from one of the 20 AIG subsidiaries that do business here, said state insurance Deputy Press Secretary Melissa Fox.

"There are policyholder protections by law in place so that the policyholders and their claims are protected should a company become insolvent," Ms. Fox said.

"We've been getting calls from them all -- policyholders, brokers," said Stephen Perrone, PPCIGA executive director. "We want to give assurance to the policyholders of Pennsylvania that we are a backstop. This is what we do."

Eleven of the 20 AIG subsidiaries are based in Pennsylvania, including National Union Fire Insurance Co. in Downtown Pittsburgh, believed to be the second largest AIG underwriter in the nation.

Industry estimates peg the amount of AIG business in the state at nearly half a billion dollars.

Other Pennsylvania companies that don't bear the AIG name but are nonetheless wholly owned subsidiaries include: New Hampshire Insurance, Insurance Company of the State of Pennsylvania, Granite State Insurance and New Hampshire Indemnity.

The liquidation process is outlined in a guide that's available at www.ins.state.pa.us/ins/lib/ins/consumer/brochures/2003_Liquid_Rehab.pdf.

If a company becomes insolvent, the insurance department liquidates the company and uses any proceeds to pay claims. The payout also comes from on-demand assessments that PPCIGA levies on all property and casualty insurers.

A similar but separate process covers other lines such as health, life and workers' compensation.

"The system has worked well, but there has not been a large insurer like Allstate or State Farm that has had to be liquidated," said Michael Wood, research director of the Pennsylvania Budget and Policy Center.

At some point, he said, the PPCIGA and similar guarantors may not be able to raise enough in assessments. Then what happens?

"The insurance industry is largely regulated at the state level, so you may see states step in to try to pay claims," he said. "But I'm not sure where they would get the money."

Mr. Perrone said while none of the Big Three property and casualty insurers here (Erie, State Farm and Allstate) have been in trouble, the agency has handled several substantial payouts.

Since 1984, roughly $185 million in assessments have been made, PPCIGA records show, including about $19 million in auto claims. About 75 insurers have become insolvent during that period, the most recent in April being MIIX Insurance Co., a New Jersey-based medical malpractice company.

The largest single payout ever, Mr. Perrone said, was handled by PPCIGA -- P.I.C. Mutual Insurance Co. in 1998, a Pennsylvania medical malpractice specialist that triggered $221 million in claims.

A more recent major case was Reliance Insurance Co. in 2001, he said, which had been the 12th largest property and casualty underwriter in the nation.