RLI CORP — Director's Dealing 2007

May 7, 2007

SEC Form 4 — Statement of Changes in Beneficial Ownership

Issuer: RLI CORP (RLI)
CIK: 0000084246
Period of Report: 2007-05-03

Reporting Person: Kliethermes Craig W (VP, Actuarial RLI Insurance Co)

Derivative Transactions

Date	Security	Exercise Price	Code	Shares	A/D	Expiration	Underlying	Ownership
2007-05-03	Stock Option	$56.09	A	9000	Acquired	2017-05-03	Common Stock (9000)	Direct

Holdings (Non-Derivative)

Security	Shares	Ownership
Common Stock	1504.386	Direct
Common Stock	476.5146	Indirect
Common Stock	178.0459	Indirect

Holdings (Derivative)

Security	Exercise Price	Expiration	Underlying	Shares	Ownership
Stock Option	$50.15	2016-05-04	Common Stock (5000)	5000	Direct

Footnotes

F2: Ownership reflects shares allocated to ESOP participant's account and dividend reinvestment.

F1: Ownership reflects dividend reinvestment.

F3: Pursuant to option schedule wherein 20% of the aggregate number of shares granted may be exercised commencing one year from grant date and each year thereafter in 20% increments.