Washington lawyer Richard S. Morey had been approved for a high-paying disability insurance policy until the company found out he was in therapy with a psychologist. Then the company turned him down.

Morey has filed a complaint charging discrimination, with the Maryland Insurance Commission.Several professional psychological associations believe the case could have far-reaching implications for Maryland residents.

"If the company is vindicated on this, psychother apy would conceivably have to go underground... with people reluctant to go into it because of the possible consequences," said psychologist Lewis Garmize, president-elect of the Maryland Psychological Association.

The company, Unionmutual, stands by its decision, with a spokesman stating that anyone under-going psychotherapy would be turned down for this type of policy, which would have paid Morey $2,500 a month if he were unable to continue his job as a lawyer.

"We totally disagree with the charge of discrimination," said Unionmutual lawyer Paul Willihnganz. "We're not treating mental and emotional illness any different than if a person were undergoing treatment for a liver ailment. Then, we would not issue (a policy), until we saw how the treatment came out."

Morey, who says he began seeing a psychiatrist in 1973 while going through a separation from his wife and now sees a psychologist once a week, views the issue differently.

"The way I look at it I'm not sick," said the 40-year-old attorney, adding that he had never missed a day of work because of an emotional problem. He said he continues to see the psychologist "to help me make my life a little bit better."

Morey is not the first prson to encounter difficulty in getting disability insurance because he was receiving psychological help.

Baltimore psychiatrist Lex B. Smith said that several years ago he was denied insurance because he was going through a personal analysis that was part of his training as an analyst.

And last year the American Journal of Psychiatry reported that some psychiatrists who had previous psychoanalytic therapy as part of their training were not allowed to participate in the American Psychiatric Association's own group disability insurance plan.

Unionmutual's Willihngang said that as this issue has become more and more prevalent, several states have fobidden group insurers from treating mental illness in any different category when writing group medical or disability policies.

"But individual long-term policies are a different ballgame. If we are told by the Maryland Insurance Department or anybody else that we must cover something that could cause major losses, then we're being put in an untenable position," he said.

Willihnganz said his company has data showing that people with a history of minor emotional problems file claims more frequently than a random sample of policy holders as a whole.

Matthew McDonald, Maryland Psychological Association president, argued in a letter to the insurance commission that data accumulating over the past 20 years indicates just the opposite -- "the ready access to outpatient mental health services actually leads to a decrease in the utilization of all other general health services."

Both sides acknowledge that none of the data is conclusive.

The insurance commission is hearing the case under a state regulation that provides that no insurer may refuse to underwrite a policy "for any arbitrary, capricious or unfairly discriminatory reason."

Its decision in the case is expected in about a month.