Ownership Submission
FORM 4
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 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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(Print or Type Responses)
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. Date of Earliest Transaction (Month/Day/Year)
02/03/2006
(Street)

PEORIA, IL 61615		 4. If Amendment, Date Original Filed(Month/Day/Year)
 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 (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 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 02/03/2006   J(1)   23,177 A $ 53.63 1,112,548.0141 (2) D  
Common Stock 02/03/2006   J(3)   507 A $ 53.63 1,113,055.0141 (2) D  
Common Stock 02/03/2006   F   2,000 D $ 53.45 1,111,055.0141 (2) D  
Common Stock 02/03/2006   F   1,000 D $ 53.56 1,110,055.0141 (2) D  
Common Stock 02/03/2006   F   1,700 D $ 53.57 1,108,355.0141 (2) D  
Common Stock 02/03/2006   F   100 D $ 53.58 1,108,255.0141 (2) D  
Common Stock 02/03/2006   F   1,000 D $ 53.63 1,107,255.0141 (2) D  
Common Stock 02/03/2006   F   500 D $ 53.64 1,106,755.0141 (2) D  
Common Stock 02/03/2006   F   1,200 D $ 53.65 1,105,555.0141 (2) D  
Common Stock 02/03/2006   F   471 D $ 53.67 1,105,084.0141 (2) D  
Common Stock 02/03/2006   F   300 D $ 53.68 1,104,784.0141 (2) D  
Common Stock 02/03/2006   F   289 D $ 53.97 1,104,495.0141 (2) D  
Common Stock 02/03/2006   J(3)   507 D $ 53.63 0.701 I By Empl.Stock Ownership Plan
Common Stock 02/03/2006   S   0.701 D $ 53.63 0 I By Empl.Stock Ownership Plan
Common Stock               18,349.652 I By Executive Deferred Comp
Common Stock 02/02/2006   J(4) V 1,432.0548 A $ 53.9726 117,462.8863 (5) I By Key Emp. Benefit Plan
Common Stock 02/03/2006   J(1)   23,177 D $ 53.63 94,285.8863 (5) I By Key Emp. Benefit Plan
Common Stock               27,677.257 (6) I By Trust for Grandchildren
Common Stock               3,692 I By Trust for Sister
Common Stock               68,935 I By Wife

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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 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 55,114   55,114 D  
Stock Option $ 9.15             05/02/1997 05/02/2006 Common Stock 43,396   43,396 (7) D  
Stock Option $ 13             05/01/1998 05/01/2007 Common Stock 75,256   75,256 (7) 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   02/06/2006
**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).
(1) Shares distributed to Mr. Stephens pursuant to the Gerald D. Stephens RLI Corp. Key Employee Excess Plan Benefit rules.
(5) Ownership reflects dividend reinvestment.
(4) The securities herein were allocated to my acct. pursuant to the Gerald D. Stephens RLI Corp. Key Employee Excess Benefit Plan.
(6) Ownership reflects dividend reinvestment.
(7) Options balance adjusted to reflect 2 additional options received pursuant to the 1995 and 1998 stock splits.
(2) Ownership reflects dividend reinvestment.
(3) Shares distributed to Mr. Stephens pursuant to RLI Corp. Employee Stock Ownership Plan rules.

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