Sec Form 5 Filing - HENSEY CAMILLE J @ RLI CORP - 2006-12-31

FORM 5 Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP 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 HENSEY CAMILLE J 2. Issuer Name and Ticker or Trading Symbol RLI CORP [ RLI] 5. Relationship of Reporting Person(s) to Issuer (Check all applicable) _____ Director _____ 10% Owner X __ Officer (give title below) _____ Other (specify below) V.P./Corporate Secretary (Last) (First) (Middle) 9025 N. LINDBERGH DRIVE 3. Date of Earliest Transaction (MM/DD/YY) 12/31/2006 (Street) PEORIA, IL61615 4. If Amendment, Date Original Filed (MM/DD/YY) 6. Individual or Joint/Group Filing (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 (MM/DD/YY) 2A. Deemed Execution Date, if any (MM/DD/YY) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4) Code V Amount (A) or (D) Price Common Stock 05/25/2006 G V 20 D $ 48.31 17,963.311 ( 1 ) D Common Stock 12/13/2006 G V 3 D $ 54.65 17,960.311 ( 1 ) D Common Stock 15,137.1871 ( 2 ) I By Empl. Stock Ownership Plan Common Stock 448.3225 ( 3 ) I By Trust

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 (MM/DD/YY) 3A. Deemed Execution Date, if any (MM/DD/YY) 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 (MM/DD/YY) 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 Following Reported Transaction(s) (Instr. 4) 10. Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 4) 11. Nature of Indirect Beneficial Ownership (Instr. 4) Code V (A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares Option $ 15.9063 05/06/2000 05/06/2009 Common Stock 4,600 4,600 D Stock Option $ 13 05/01/1998 05/01/2007 Common Stock 2,083 2,083 D Stock Option $ 15.7813 05/04/2001 05/04/2010 Common Stock 5,000 5,000 D Stock Option $ 20.05 05/03/2002 05/03/2011 Common Stock 5,000 5,000 D Stock Option $ 21.1 05/07/1999 05/07/2008 Common Stock 1,250 1,250 D Stock Option $ 29.335 05/02/2003 05/02/2012 Common Stock 5,000 5,000 D Stock Option $ 29.55 05/01/2004 05/01/2013 Common Stock 4,000 4,000 D Stock Option $ 35.08 05/06/2005 05/06/2014 Common Stock 4,000 4,000 D Stock Option $ 44.54 05/05/2006 05/05/2015 Common Stock 3,500 3,500 D Stock Option $ 50.15 05/04/2007 05/04/2016 Common Stock 2,000 2,000 D

Reporting Owners Reporting Owner Name / Address Relationships Director 10% Owner Officer Other HENSEY CAMILLE J 9025 N. LINDBERGH DRIVE PEORIA, IL61615 V.P./Corporate Secretary Signatures Camille J Hensey 01/30/2007 Signature of Reporting Person Date

Explanation of Responses:

( 2 )Ownership reflects shares allocated to ESOP participant's account and dividend reinvestment. ( 3 )Ownership reflects dividend reinvestment. ( 1 )Ownership reflects dividend reinvestment.

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.

* 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).

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