Maryland State Del. Frank M. Conaway (D-Baltimore) has sold his two insurance companies and turned in his insurance brokerage license after being accused by the state of mishandling more than $200,000 in client premiums.

The Maryland insurance commisioner suspended hearings on the administrative charges after Conaway's announcement yesterday, but an investigation by the Baltimore prosecutor's office is continuing, according to Bernard Kole, head of the city's major frauds divison.

Conaway, 49, said his decision to leave the insurance business had nothing to do with the charges. "I have been contemplating it for a long time," he said, adding that he wanted to have more time to for his duties in the General Assembly, where he has served two terms.

"I plan to pursue reelection rather than to pursue these charges at this time," said Conaway, former head of the legislature's black caucus. He said he sold his two firms -- Frank M. Conaway Associates Inc. and Ashburton Insurance -- last week.

The insurance commsioner had filed 24 charges against Conaway including illegally withholding $205,476 from U.S. Fidelity and Guarantee Co., Hartford Mutual Insurance Co., Paramount Insrance Co. and the Central Acceptance Corp. He also was charged with eight cases of overcharging clients, who since have received restitution by the companies, and one count of failing to place a policy with an insurance company.

"I'm not saying the charges were unfounded, but I'm not at all conceding that the agency could have won," said Conaway's lawyer Joseph F. Murphy Jr. "Nobody was left without coverage."

The state insurance division lost jurisdiction in the case once Conaway surrendered his license and sold his companies, according to Murphy.

Conaway was fined $1,500 in 1981 for illegally withholding $26,000 in similar cases.