Investors who suffered losses between early 1974 and late 1976, after purchasing shares of Government Employees Insurance Co., may receive up to $2.36 million as part of a settlement to lawsuits filed against the company.

The fund would be established by Geico, four current or former officers and directors, and the national accounting firm of Ernst & Ernst, in response to several investor class actions which alleged fraud and violations of federal securities.

At the same time, Geico and the other defendants denied "all wrongdoing" charged in the lawsuits and said in notices to persons involved that the defendants "deny that members of the class are entitled to any damages or other relief."

"But the defendants agreed to establish the fund to cover alleged damages in exchange for dismissal of the suits, subject to approval by U.S. District Court here. Lawyers involved declined to state how much money each defendant must contribute.

Donald Smith, senior vice president and counsel for Geico, said the Washington automobile insurance company "won't make known" to its stockholders or the general public Geico's portion of the funds.

Officials of Ernst & Ernst would not say how much the accounting firm will contribute, if anything.

Other sources said they understand Geico itself will contribute most of the money and Smith indicated that liability insurance coverage for directors and officers will provide proceeds to cover at least some unstated portion of Geico's share.

In its annual report for 1977, Geico said "an accrual . . . not material in amount" was set aside last year to cover any liability from final settlement of various investors' lawsuits, which had been described earlier by Geico as being "without merit."

Four lawsuits and a Securities and Exchange Commission investigation charged that starting early in 1975, Geico and certain officers and directors overstated assets, employed "schemes and artifices" to defraud investors, published financial information that omitted material facts or made stock transactions based upon inside knowledge that Geico's viability was threatened by a financial crisis that soon will become known to the public.

On Jan. 14, 1976, Geico estimated sizable fourth quarter losses of $57 million for 1975.On March 1, the original estimate of losses was boosted sharply to $107 million. The company's stock, trading over the counter as high as $60 in 1972, had declined to about $9 a share by Jan. 14 and subsequently declined to under $7 in late February 1976, when trading was halted.

Stockholders filed lawsuits against Geico and Ernst & Ernst, alleging publication of false and misleading financial documents that had been reviewed by the accounting firm.

Under an earlier consent agreement with the SEC, former Geico Chairman Norman Gidden and President Ralph Peck severed all ties to the insurance firm and an outside director approved by the D.C. Superintendent of Insurance was named to the company's board.

In addition, Gidden agreed to set aside $35,000 in a fund to cover potential awards from civil actions related to his sale of 15,045 shares of Geico stock on Nov. 26, 1975, at which time the SEC investigation concluded he was "in possession of . . . non-public information," Gidden received more than $10 a share for the stock he sold.

A hearing on proposed settlements to the class actions has been schedule for July 28, at the District Court, where the claims have been consolidated.

Persons eligible to seek partial recovery of losses are those who may have purchased from Merrill Lynch, Pierce, Fenner & Smith the former Gibben stock on Nov. 26, 1975, or who purchased Geico stock or warrants from Feb. 1, 1974, to Oct. 27, 1976, "and who suffered a loss in connection therewith or still owns such securities."

In addition, warrants now due to expire in August would be extended for five years under the propsed settlement. More than 1,860 investors own 648,552 warrants to buy Geico common stock, issued as part of a 1971 capital offering. The exercise price of such warrants would be reduced to $24 a share from $31.

Lawyers connected to the case do not know how to estimate potential damages that may be claimed by Geico stockholders or former investors. Thus, they cannot estimate what percentage of individual claims may be covered by the $2.36 million fund. In addition, Geico has agreed to pay up to $50,000 in legal fees connected with the lawsuits.

In addition to Geico and Ernst & Ernst, other defendants in the class action cases included Gibben, Peck, former chairman and current director David Lloyd Kreeger, and Henry Collins III, now a Geico vice president.

After steep losses in 1975, Geico almost suffered insolvency in mid-1976. But a combination of factors saved the company, including new capital raised through an offering of preferred stock (acquired mostly by current owners), an agreement with competiting firms to assume a share of Geico's risks (now being withdrawn) and sharp cutbacks in employment and insurance business.

Last year, Geico earned a record $58.6 million after the losses of $26.3 million in 1976 and $126.5 million in 1975. A decline in auto insurance volume has stopped and the company is seeking to expand once again.

The last day for investors to file claims is Sept. 1. Complaints and other documents involved in the lawsuits are available for study by individuals at U.S. District Court.