NEW YORK (AP) _ The Equal Employment Opportunity Commission is heralding the settlement of a long-term disability claim by a man burdened by severe depression as a warning to companies to treat physical and mental diseases equally.

The EEOC had joined lawyers representing a man identified in court papers only as Leonard F. in a case against the Israel Discount Bank of New York, where the man worked before severe depression disabled him.

``This settlement will go a long way toward ensuring that individuals with mental disabilities are treated the same as individuals with physical disabilities in employer-provided ... insurance plans,'' EEOC Chairman Paul M. Igasaki said in a statement, noting that equal coverage does not cost much more.

Lawyers for Leonard F. and for the bank, which employs about 380 people at two offices in Manhattan, settled the case just as they were about to begin a trial in White Plains federal court on Tuesday.

The terms of the settlement were not disclosed, but the company agreed to adopt a long-term disability insurance policy that provides equal benefits to employees whether they have psychiatric or physical disabilities. The bank did not admit any liability.

The case was one of the first to challenge insurance coverage that puts limits on benefits for mental disabilities when there are no limits on physical injuries.

Theodore Itzkowitz, the bank's general counsel, said the company still believes its insurance policy did not violate the Americans with Disabilities Act, a 1990 federal law prohibiting discrimination against people with disabilities.

``The settlement was based on an economic reality of how much this was going to cost me to try,'' he said.

But Gerald Letwin, an EEOC lawyer in Washington who handled the case, said the agency is convinced that the disabilities law requires that mental and physical disabilities be treated equally.

The EEOC has since filed lawsuits in similar cases against Chase Manhattan Bank, Staten Island Savings Bank of New York as well as the Cigna Corp. and Insurance Co. of North America.