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 *
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 (Month/Day/Year)
12/21/2004
(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 12/21/2004   M/K   275 A $ 8.24 15,190.311 (1) D  
Common Stock 12/21/2004   F/K   57 D $ 40.34 15,133.311 (1) D  
Common Stock               14,170.5378 (2) I By Empl. Stock Ownership Plan
Common Stock               436.1366 (3) I By Trust

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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 4,600   4,600 D  
Stock Option $ 9.15             05/02/1997 05/02/2006 Common Stock 1,600   1,600 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 $ 8.24 12/21/2004   M/K     275 05/11/1996 05/11/2005 Common Stock 275 $ 8.24 2,103 (4) D  

Reporting Owners

Reporting Owner Name / Address Relationships
 Director  10% Owner  Officer  Other
HENSEY CAMILLE J
9025 N. LINDBERGH DRIVE
PEORIA, IL 61615		       V.P./Corporate Secretary  

Signatures

 Camille J Hensey   12/23/2004
**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).
(2) Ownership reflects shares allocated to ESOP participant's account and dividend reinvestment.
(4) Options balance adjusted to reflect 2 additional options received pursuant to the 1995 and 1998 stock splits.
(3) Ownership reflects dividend reinvestment.
(1) Ownership reflects dividend reinvestment.

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