Ownership Submission
FORM 5
Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).
Form 3 Holdings Reported
Form 4 Transactions Reported
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

ANNUAL STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940
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1. Name and Address of Reporting Person *
STEPHENS GERALD D
 2. Issuer Name and Ticker or Trading Symbol
RLI CORP [RLI] 		5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
__X__ Director _____ 10% Owner
_____ Officer (give title below) _____ Other (specify below)
(Last)
(First)
(Middle)

9025 N. LINDBERGH DRIVE		 3. Statement for Issuer's Fiscal Year Ended (Month/Day/Year)
12/31/2006
(Street)


PEORIA, IL 61615		 4. If Amendment, Date Original Filed(Month/Day/Year)
 6. Individual or Joint/Group Reporting
(check applicable line)

_X_ Form Filed by One Reporting Person
___ Form Filed by More than One Reporting Person
(City)
(State)
(Zip)
Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1.Title of Security
(Instr. 3)		 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code
(Instr. 8)		 4. Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4 and 5)		 5. Amount of Securities Beneficially Owned at end of Issuer's Fiscal Year
(Instr. 3 and 4)		 6. Ownership Form: Direct (D) or Indirect (I)
(Instr. 4)		 7. Nature of Indirect Beneficial Ownership
(Instr. 4)
Amount (A) or (D) Price
Common Stock 04/05/2006   G 200 D $ 0 1,126,623.8754 (1) D  
Common Stock 06/19/2006   G 100 D $ 0 1,126,523.8754 (1) D  
Common Stock 06/30/2006   G 100 D $ 0 1,126,662.5496 (1) D  
Common Stock 09/01/2006   G 300 D $ 49.07 1,115,538.9212 (1) D  
Common Stock 11/28/2006   G 100 D $ 55.97 1,115,438.9212 (1) D  
Common Stock             18,549.4635 (2) I By Executive Deferred Comp
Common Stock             95,313.4913 (3) I By Key Emp. Benefit Plan
Common Stock 04/05/2006   G 100 A $ 0 27,864.6479 (4) I By Trust for Grandchildren
Common Stock 06/30/2006   G 100 A $ 0 28,081.4504 (4) I By Trust for Grandchildren
Common Stock 09/01/2006   G 300 A $ 49.07 28,482.0399 (4) I By Trust for Grandchildren
Common Stock 11/28/2006   G 100 A $ 55.97 28,582.0399 (4) I By Trust for Grandchildren
Common Stock             3,692 I By Trust for Sister
Common Stock             68,935 I By Wife

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly. Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. SEC 2270 (9-02)

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security
(Instr. 3)		 2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (Month/Day/Year) 3A. Deemed Execution Date, if any (Month/Day/Year) 4. Transaction Code
(Instr. 8)		 5. Number of Derivative Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4, and 5)		 6. Date Exercisable and Expiration Date
(Month/Day/Year)		 7. Title and Amount of Underlying Securities
(Instr. 3 and 4)		 8. Price of Derivative Security
(Instr. 5)		 9. Number of Derivative Securities Beneficially Owned at End of Issuer's Fiscal Year
(Instr. 4)		 10. Ownership Form of Derivative Security: Direct (D) or Indirect (I)
(Instr. 4)		 11. Nature of Indirect Beneficial Ownership
(Instr. 4)
(A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares
Option $ 15.9063           05/06/2000 05/06/2009 Common Stock
55,114
  55,114
D
 
Stock Option $ 15.7813           05/04/2001 05/04/2010 Common Stock
49,664
  49,664
D
 
Stock Option $ 20.05           05/03/2001 05/03/2011 Common Stock
1,440
  1,440
D
 
Stock Option $ 21.1           05/07/1999 05/07/2008 Common Stock
77,762
  77,762
D
 
Stock Option $ 29.405           05/01/2003 05/01/2012 Common Stock
1,080
  1,080
D
 
Stock Option $ 29.55           05/01/2004 05/01/2013 Common Stock
720
  720
D
 
Stock Option $ 34.55           05/03/2005 05/03/2014 Common Stock
360
  360
D
 
Stock Option $ 40.39           02/02/2005 02/02/2014 Common Stock
360
  360
D
 

Reporting Owners

Reporting Owner Name / Address Relationships
Director 10% Owner Officer Other
STEPHENS GERALD D
9025 N. LINDBERGH DRIVE
PEORIA, IL 61615		   X      

Signatures

Gerald D Stephens 01/30/2007
**Signature of Reporting Person Date

Explanation of Responses:

* If the form is filed by more than one reporting person, see Instruction 4(b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
(3) Ownership reflects dividend reinvestment.
(4) Ownership reflects dividend reinvestment.
(1) Ownership reflects dividend reinvestment.
(2) Ownership reflects dividend reinvestment.

Note: File three copies of this Form, one of which must be manually signed. If space provided is insufficient, see Instruction 6 for procedure.

Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB number.