A public interest group filed suit yesterday against the D.C. government seeking the release of reports identifying insurance companies that have potential financial problems.

The suit was filed in D.C. Superior Court by the Public Citizen Litigation Group on behalf of Joseph M. Belth, a professor of insurance at Indiana University. The city this week denied Belth access to the records, partly on the ground that disclosure might result in a loss of business for some insurance companies.

Belth, a leading expert on life insurance and publisher of a monthly newsletter "Insurance Forum," asked the D.C. Department of Consumer and Regulatory Affairs a year ago for the reports, which are compiled by the National Association of Insurance Commissioners. The reports flag those companies that are having financial difficulties or face possible problems in the future.

District Secretary Clifton B. Smith, who reviewed Belth's request for the documents, said in a memorandum dated April 21 that release of the material "would identify insurance companies that have potential solvency problems," according to the suit.

The memorandum said that such insurance companies "might lose future business because consumers would not want an insurance policy underwritten by a company identified . . . as having potential or existing problems related to solvency."

John Cary Sims, an attorney with the Ralph Nader-affiliated Public Citizen Litigation Group, said, "What that [memorandum] says is that if we let you, the consumer, get any idea which insurance companies are in bad shape then the companies will be injured because consumers won't take out insurance with them anymore."

"Well, I sure hope people would not want to take out insurance with those companies," said Sims, who likened the potential for problems with the insurance industry to the recent crisis in the Maryland savings and loans industry where government officials appeared to have known about the financial problems long in advance of public notification.

Sims said the information contained in the reports is culled from public documents and then computed to reach certain risk ratios. "The craziest thing about this is that if you want to spend thousands of dollars in computer time and take the public documents and compute the ratios yourself, you can," he said.

Smith said yesterday he preferred not to comment on the suit until he had a chance to review city records in the case more thoroughly.