The Securities and Exchange Commission ruled yesterday that USF&G Corp. and its chief financial officer violated accounting procedures when the Baltimore insurance company improperly reported $51 million in capital gains and $48 million in dividend income on its quarterly and annual reports for 1984 and 1985.

The company has already restated its earnings for those years because of the improper accounting.

USF&G and the executive, James M. Raley Jr., both consented to the SEC's order without admitting or denying the allegations.

"There are no new issues here," said Paul Schlough, USF&G's vice president for investor relations. "They just decided to come out with these formal hearings. We decided to settle on it."

Schlough said USF&G has not taken any action against Raley, who still is the company's chief financial officer.

The commission said it found that Raley approved a plan by which the company improperly recognized $51 million in gains on its 1984 financial statements through trades in debt securities.

The commission said USF&G would sell and then buy back debt securities on the same day, pay commissions to brokers on the transactions, and then record a net profit on the deals without delivering the securities.

That allowed USF&G to add the so-called gain to the surplus it is required to maintain under laws regulating insurance companies.

The SEC also said the company improperly classified $48 million in dividends. The commission said USF&G bought and sold shares in other companies on the record date for dividend payments, collected the dividends, then accounted for them as investment income.

The SEC said the company should not have included the dividend payments from such "dividend capture" trades as investment income, but rather should have offset the dividends against losses it incurred buying and selling the stocks.

Though USF&G received dividends "virtually equal to the capital losses on the sales," the commission said, the trades gave the company "significant after-tax advantages."

The SEC does not have the statutory authority to impose fines in the case, according to Gary Sundick, a lawyer in the SEC's enforcement division.