Twelve Western dioceses and archdioceses, including all those in Northern California, are putting together written guidelines on how to handle cases involving molestation by priests.

The dioceses, 10 in California and one each in Nevada and Arizona, last summer formed their own liability insurance company, in large part, officials said, because they had no coverage in cases in which parents of molested children sued the diocese.

"Virtually every diocese in the country lost its liability coverage for any type of sexual misconduct by priests, teachers, religious, lay people," said Bruce Egnew, president of the new insurance company, called The Ordinary Mutual. "Having seen the writing on the wall that these things are very, very expensive was one of the reasons we formed our own insurance liability company."

The guidelines are to be sent to all priests in the parishes and to schools, hospitals and other church-owned facilities in the dioceses so that any allegation of child molestation is taken seriously, church officials said.

''It is to be a policy that governs that immediate reaction," Egnew said. "What you do when you get this call from a parent. Or when a pastor hears it from another priest. Or when a nun hears it from a kid. Or when a second-grade teacher hears or sees or senses a problem." Besides instructing Catholic officials to immediately pass along to diocesan headquarters any child-molestation allegations, the guidelines instruct diocesan officials to swiftly ascertain whether the allegations are credible, to notify authorities if appropriate, to remove the alleged molester from involvement with children and to seek immediate psychiatric help for both the priest and the child victims. ''We're in the 10th draft of the guidelines and we've been working on it for six or seven months," said Brother Haig Charchaf of the Oakland diocese. "And the papers have gone out to the bishops."

The Catholic Church was first urged in 1985 to adopt a national program encompassing these types of guidelines, but the bishops decided to continue to deal with the problem on a local basis. Many of the dioceses still have not adopted formal procedures, despite multimillion-dollar settlements that have been paid by dioceses across the country.

Although none of the 12 Western dioceses that joined the insurance company ever paid more than $250,000 in a claim, South Bay church officials have had to deal with several cases.

Five years ago, 70-year-old Father Vincent I. Breen resigned as pastor of Fremont's Holy Spirit Church in the Oakland diocese after police officers — called by parents — revealed that he'd fondled eight girls, ages 7 to 14. As a condition of his resignation, no charges were filed against Breen, who has since died.

Last year, a religion teacher at Archbishop Mitty High School in San Jose resigned after admitting that he invited a 16-year-old student to his Mountain View apartment and had sex with her.

Also in Santa Clara County, a priest who was sent away for treatment for pedophilia now works as a priest in the San Jose diocese, according to Father Eugene Boyle.

''I can't tell his name, but it was not hushed up," said Boyle, vicar for public relations. "He received a definite period of counseling and a long period of probation."

Boyle said that because the case happened before the San Jose diocese was created in 1981, it was handled administratively by the San Francisco archdiocese.

Officials there, however, did not cite this case — or any other — when asked whether they had been forced to deal with pedophilic priests.

''That's one problem we haven't had, thanks be to God," said Deacon Norman Phillips, a spokesman for the San Francisco archdiocese, who has been there since July.

In Monterey, Albert Ham, attorney for the diocese, said the same.

''We've never had any case of a child molestation," Ham said. "And I hope we never do."

But Egnew says that such cases, particularly if Catholic lay teachers are counted, are inevitable.

''It's statistically bound to happen when you're dealing with the thousands and thousands of people in our system," he said. "We're probably going to get sued in these cases anyway. But dealing with them openly while respecting the privacy of those involved is a way of ensuring that we're not negligent and that we're not giving license to, tolerating or affirming this kind of behavior."

Local Catholic officials said the guidelines are the result of a growing awareness of the problem and how to appropriately deal with it.

''I've been a priest for 25 years, and I think it was a case of 'hear no evil, see no evil, speak no evil,' " said Father Miles Riley, an official in the San Francisco archdiocese. "The church was like a loving parent who wants to believe the best about her children and adopts an attitude of loving ignorance. At one level we knew, but we didn't want to know."