RLI CORP 10-K

Item 9A. Controls and Procedures ​ Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures ​ Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act). Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective as of December 31, 2022. ​ Management’s Report on Internal Control Over Financial Reporting ​ Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f). Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the framework in Internal Control — Integrated Framework (2013) , our management concluded that our internal control over financial reporting was effective as of December 31, 2022. ​ Our internal control over financial reporting as of December 31, 2022 has been audited by Deloitte & Touche LLP (PCAOB ID No. 34 ), an independent registered public accounting firm, as stated in their report on page 91 of this report. ​ There was no change in our internal control over financial reporting during our fourth fiscal quarter ended December 31, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. ​ Item 9B. Other Information – None. ​ Item 9C . Disclosure Regarding Foreign Jurisdictions that Prevent Inspections – None. ​ PART III ​ Items 10 to 14. ​ Items 10 through 14 (inclusive) of this Part III are not included herein because the Company will file a definitive Proxy Statement with the SEC that will include the information required by such Items, and such information is incorporated herein by reference. ​ PART IV ​ Item 15. Exhibits and Financial Statement Schedules ​ (a) (l-2) See Item 8 for Consolidated Financial Statements included in this report. ​ (3) Exhibits. See Exhibit Index on pages 104-105. ​ (b) Exhibits. See Exhibit Index on pages 104-105. ​ (c) Financial Statement Schedules. See Index to Financial Statement Schedules on page 94. ​ 93 Table of Contents INDEX TO FINANCIAL STATEMENT SCHEDULES ​ ​ ​ Reference (Page) Data Submitted Herewith: ​ ​ ​ Schedules: ​ ​ ​ I. Summary of Investments - Other than Investments in Related Parties at December 31, 2022. 95 ​ ​ II. Condensed Financial Information of Registrant, as of and for the three years ended December 31, 2022. 96-98 ​ ​ III. Supplementary Insurance Information, as of and for the three years ended December 31, 2022. 99-100 ​ ​ IV. Reinsurance for the three years ended December 31, 2022. 101 ​ ​ V. Valuation and Qualifying Accounts for the three years ended December 31, 2022. 102 ​ ​ VI. Supplementary Information Concerning Property-Casualty Insurance Operations for the three years ended December 31, 2022. 103 ​ Schedules other than those listed are omitted for the reason that they are not required, are not applicable or that equivalent information has been included in the financial statements, and notes thereto, or elsewhere herein. ​ 94 Table of Contents RLI CORP. AND SUBSIDIARIES SCHEDULE I—SUMMARY OF INVESTMENTS—OTHER THAN INVESTMENTS IN RELATED PARTIES December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Column A ​ Column B ​ Column C ​ Column D ​ ​ ​ ​ ​ ​ ​ ​ Amount at (in thousands) ​ ​ ​ ​ ​ ​ ​ which shown in Type of Investment Cost (1) Fair Value the balance sheet Fixed maturities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Bonds: ​ ​ ​ ​ ​ ​ ​ ​ ​ Available-for-sale: ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. government ​ $ 462,884 ​ $ 454,021 ​ $ 454,021 U.S. agency ​ ​ 75,074 ​ ​ 73,063 ​ ​ 73,063 Non-U.S. government & agency ​ ​ 6,798 ​ ​ 5,847 ​ ​ 5,847 Agency MBS ​ ​ 373,687 ​ ​ 331,806 ​ ​ 331,806 ABS/CMBS/MBS* ​ ​ 276,126 ​ ​ 240,736 ​ ​ 240,736 Corporate ​ ​ 1,122,097 ​ ​ 1,034,330 ​ ​ 1,034,330 Municipal ​ ​ 628,607 ​ ​ 527,147 ​ ​ 527,147 Total available-for-sale ​ $ 2,945,273 ​ $ 2,666,950 ​ $ 2,666,950 Total fixed maturities ​ $ 2,945,273 ​ $ 2,666,950 ​ $ 2,666,950 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Equity securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Common stock: ​ ​ ​ ​ ​ ​ ​ ​ ​ Ind Misc and all other ​ $ 109,530 ​ $ 179,643 ​ $ 179,643 ETFs (Ind/misc) ​ ​ 218,489 ​ ​ 318,739 ​ ​ 318,739 Total equity securities ​ $ 328,019 ​ $ 498,382 ​ $ 498,382 Cash and short-term investments ​ ​ 59,047 ​ ​ 59,047 ​ ​ 59,047 Other invested assets ​ ​ 43,980 ​ ​ 47,922 ​ ​ 47,922 Total investments and cash ​ $ 3,376,319 ​ $ 3,272,301 ​ $ 3,272,301 * Non-agency asset-backed, commercial mortgage-backed and mortgage-backed securities ​ Note: See notes 1E and 2 of Notes to Consolidated Financial Statements. See also the accompanying reports of independent registered public accounting firms starting on page 91 of this report. ​ (1) Original cost of equity securities and, as to fixed maturities, original cost reduced by repayments and adjusted for amortization of premiums or accrual of discounts. ​ 95 Table of Contents RLI CORP. AND SUBSIDIARIES SCHEDULE II—CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY) CONDENSED BALANCE SHEETS December 31, ​ ​ ​ ​ ​ ​ ​ ​ (in thousands, except share data) 2022 2021 ASSETS ​ ​ ​ ​ ​ ​ Cash ​ $ 1,051 ​ $ 1,433 Short-term investments, at cost which approximates fair value ​ ​ 2,229 ​ ​ — Accounts receivable, affiliates ​ ​ 1,572 ​ ​ 848 Investments in subsidiaries ​ ​ 1,084,055 ​ ​ 1,197,997 Investments in unconsolidated investee ​ ​ — ​ ​ 113,052 Fixed income: ​ ​ ​ ​ ​ ​ Available-for-sale, at fair value ​ ​ 237,282 ​ ​ 86,483 (amortized cost of $ 250,904 and allowance for credit losses of $ 0 in 2022) ​ ​ ​ ​ ​ ​ (amortized cost of $ 84,823 and allowance for credit losses of $ 0 in 2021) ​ ​ ​ ​ ​ ​ Property and equipment, at cost, net of accumulated depreciation of $ 1,340 in 2022 and $ 1,697 in 2021 ​ ​ 1,410 ​ ​ 1,711 Income taxes receivable - current ​ ​ — ​ ​ 211 Income taxes - deferred ​ ​ 3,204 ​ ​ — Other assets ​ ​ 3,840 ​ ​ 2,907 TOTAL ASSETS ​ $ 1,334,643 ​ $ 1,404,642 ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND SHAREHOLDERS’ EQUITY ​ ​ ​ ​ ​ ​ LIABILITIES ​ ​ ​ ​ ​ ​ Income taxes payable - current ​ $ 1,823 ​ $ — Income taxes - deferred ​ ​ — ​ ​ 21,067 Current portion of long-term debt ​ ​ 149,863 ​ ​ — Long-term debt ​ ​ — ​ ​ 149,676 Interest payable, long-term debt ​ ​ 2,153 ​ ​ 2,153 Other liabilities ​ ​ 3,463 ​ ​ 2,385 TOTAL LIABILITIES ​ $ 157,302 ​ $ 175,281 ​ ​ ​ ​ ​ ​ ​ SHAREHOLDERS' EQUITY ​ ​ ​ ​ ​ ​ Common stock ($ 0.01 par value) ​ ​ ​ ​ ​ ​ (Shares authorized - 200,000,000 ) ​ ​ ​ ​ ​ ​ ( 68,399,966 shares issued and 45,469,752 shares outstanding in 2022) ​ ​ ​ ​ ​ ​ ( 68,219,551 shares issued and 45,289,337 shares outstanding in 2021) ​ $ 684 ​ $ 682 Paid-in capital ​ ​ 352,391 ​ ​ 343,742 Accumulated other comprehensive earnings ​ ​ ( 229,076 ) ​ ​ 49,826 Retained earnings ​ ​ 1,446,341 ​ ​ 1,228,110 Deferred compensation ​ ​ 12,015 ​ ​ 9,642 Treasury stock, at cost ( 22,930,214 shares in 2022 and 2021) ​ ​ ( 405,014 ) ​ ​ ( 402,641 ) TOTAL SHAREHOLDERS’ EQUITY ​ $ 1,177,341 ​ $ 1,229,361 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY ​ $ 1,334,643 ​ $ 1,404,642 ​ See Notes to Consolidated Financial Statements. See also the accompanying reports of independent registered public accounting firms starting on page 91 of this report. ​ 96 Table of Contents RLI CORP. AND SUBSIDIARIES SCHEDULE II—CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY)—(continued) CONDENSED STATEMENTS OF EARNINGS AND COMPREHENSIVE EARNINGS Years ended December 31, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) 2022 2021 2020 Net investment income ​ $ 6,245 ​ $ 2,102 ​ $ 1,412 Net realized gains (losses) ​ ​ 570,888 ​ ​ ( 625 ) ​ ​ 501 Equity in earnings of unconsolidated investee ​ ​ 372 ​ ​ 22,786 ​ ​ 10,368 Selling, general and administrative expenses ​ ​ ( 12,900 ) ​ ​ ( 13,330 ) ​ ​ ( 10,265 ) Interest expense on debt ​ ​ ( 7,622 ) ​ ​ ( 7,616 ) ​ ​ ( 7,603 ) Earnings (loss) before income taxes ​ $ 556,983 ​ $ 3,317 ​ $ ( 5,587 ) Income tax expense (benefit) ​ ​ 108,699 ​ ​ ( 1,585 ) ​ ​ ( 2,885 ) Net earnings (loss) before equity in net earnings of subsidiaries ​ $ 448,284 ​ $ 4,902 ​ $ ( 2,702 ) Equity in net earnings of subsidiaries ​ ​ 135,127 ​ ​ 274,452 ​ ​ 159,793 Net earnings ​ $ 583,411 ​ $ 279,354 ​ $ 157,091 Other comprehensive earnings (loss), net of tax ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized gains (losses) on securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized holding gains (losses) arising during the period ​ $ ( 12,188 ) ​ $ ( 1,996 ) ​ $ 994 Less: reclassification adjustment for (gains) losses included in net earnings ​ ​ 115 ​ ​ 500 ​ ​ ( 390 ) Other comprehensive earnings (loss) - parent only ​ $ ( 12,073 ) ​ $ ( 1,496 ) ​ $ 604 Equity in other comprehensive earnings (loss) of subsidiaries/investees ​ ​ ( 266,829 ) ​ ​ ( 57,392 ) ​ ​ 55,615 Other comprehensive earnings (loss) ​ $ ( 278,902 ) ​ $ ( 58,888 ) ​ $ 56,219 Comprehensive earnings ​ $ 304,509 ​ $ 220,466 ​ $ 213,310 ​ See Notes to Consolidated Financial Statements. See also the accompanying reports of independent registered public accounting firms starting on page 91 of this report. ​ 97 Table of Contents RLI CORP. AND SUBSIDIARIES SCHEDULE II—CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY)—(continued) CONDENSED STATEMENTS OF CASH FLOWS Years ended December 31, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) 2022 2021 2020 Cash flows from operating activities ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings (loss) before equity in net earnings of subsidiaries ​ $ 448,284 ​ $ 4,902 ​ $ ( 2,702 ) Adjustments to reconcile net losses to net cash provided by (used in) operating activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Net realized (gains) losses ​ ​ ( 570,888 ) ​ ​ 625 ​ ​ ( 501 ) Depreciation ​ ​ 64 ​ ​ 68 ​ ​ 67 Other items, net ​ ​ 1,403 ​ ​ 3,966 ​ ​ 2,270 Change in: ​ ​ ​ ​ ​ ​ ​ ​ ​ Affiliate balances receivable/payable ​ ​ ( 724 ) ​ ​ ( 3,404 ) ​ ​ 1,246 Federal income taxes ​ ​ ( 19,484 ) ​ ​ 5,901 ​ ​ 1,399 Changes in investment in unconsolidated investee: ​ ​ ​ ​ ​ ​ ​ ​ ​ Undistributed earnings ​ ​ ( 372 ) ​ ​ ( 22,786 ) ​ ​ ( 10,368 ) Net cash used in operating activities ​ $ ( 141,717 ) ​ $ ( 10,728 ) ​ $ ( 8,589 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from investing activities ​ ​ ​ ​ ​ ​ ​ ​ ​ Purchase of: ​ ​ ​ ​ ​ ​ ​ ​ ​ Fixed income, available-for-sale ​ $ ( 1,356,177 ) ​ $ ( 33,373 ) ​ $ ( 24,950 ) Other ​ ​ ( 1,420 ) ​ ​ ( 2,904 ) ​ ​ ( 346 ) Sale of: ​ ​ ​ ​ ​ ​ ​ ​ ​ Fixed income, available-for-sale ​ ​ 1,373 ​ ​ 5,306 ​ ​ 3,767 Equity method investee ​ ​ 686,566 ​ ​ — ​ ​ — Other ​ ​ 221 ​ ​ 1,245 ​ ​ — Property and equipment ​ ​ 298 ​ ​ — ​ ​ — Call or maturity of: ​ ​ ​ ​ ​ ​ ​ ​ ​ Fixed income, available-for-sale ​ ​ 1,192,050 ​ ​ 2,878 ​ ​ 3,492 Net purchase of short-term investments ​ ​ ( 2,229 ) ​ ​ — ​ ​ — Cash dividends received-subsidiaries ​ ​ 13,000 ​ ​ 180,000 ​ ​ 110,000 Net cash provided by investing activities ​ $ 533,682 ​ $ 153,152 ​ $ 91,963 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from financing activities ​ ​ ​ ​ ​ ​ ​ ​ ​ Proceeds from stock option exercises ​ $ ( 465 ) ​ $ 1,838 ​ $ 8,648 Cash dividends paid ​ ​ ( 397,323 ) ​ ​ ( 147,422 ) ​ ​ ( 95,793 ) Other ​ ​ 5,441 ​ ​ 4,212 ​ ​ 3,802 Net cash used in financing activities ​ $ ( 392,347 ) ​ $ ( 141,372 ) ​ $ ( 83,343 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net increase (decrease) in cash ​ $ ( 382 ) ​ $ 1,052 ​ $ 31 Cash at beginning of year ​ ​ 1,433 ​ ​ 381 ​ ​ 350 Cash at end of year ​ $ 1,051 ​ $ 1,433 ​ $ 381 ​ Interest paid on outstanding debt amounted to $ 7.3 million for 2022, 2021 and 2020, respectively. See Notes to Consolidated Financial Statements. See also the accompanying reports of independent registered public accounting firms starting on page 91 of this report. ​ 98 Table of Contents RLI CORP. AND SUBSIDIARIES SCHEDULE III—SUPPLEMENTARY INSURANCE INFORMATION As of and for the years ended December 31, 2022, 2021 and 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Incurred losses ​ ​ Deferred policy ​ Unpaid losses ​ Unearned ​ Net ​ and settlement ​ ​ acquisition ​ and settlement ​ premiums, ​ premiums ​ expenses (in thousands) costs expenses, gross gross earned current year Year ended December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Casualty segment ​ $ 66,285 ​ $ 1,929,091 ​ $ 466,178 ​ $ 711,832 ​ $ 468,661 Property segment ​ ​ 36,767 ​ ​ 293,737 ​ ​ 237,369 ​ ​ 307,886 ​ ​ 145,672 Surety segment ​ ​ 24,807 ​ ​ 92,809 ​ ​ 81,538 ​ ​ 124,718 ​ ​ 22,622 RLI Insurance Group ​ $ 127,859 ​ $ 2,315,637 ​ $ 785,085 ​ $ 1,144,436 ​ $ 636,955 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Casualty segment ​ $ 55,760 ​ $ 1,760,469 ​ $ 438,248 ​ $ 633,639 ​ $ 420,259 Property segment ​ ​ 25,764 ​ ​ 196,369 ​ ​ 168,209 ​ ​ 231,837 ​ ​ 140,905 Surety segment ​ ​ 22,029 ​ ​ 86,717 ​ ​ 73,987 ​ ​ 115,427 ​ ​ 20,901 RLI Insurance Group ​ $ 103,553 ​ $ 2,043,555 ​ $ 680,444 ​ $ 980,903 ​ $ 582,065 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Casualty segment ​ $ 48,255 ​ $ 1,567,544 ​ $ 385,736 ​ $ 569,521 ​ $ 397,174 Property segment ​ ​ 19,655 ​ ​ 150,008 ​ ​ 131,274 ​ ​ 183,720 ​ ​ 124,375 Surety segment ​ ​ 20,515 ​ ​ 32,497 ​ ​ 69,376 ​ ​ 112,506 ​ ​ 22,388 RLI Insurance Group ​ $ 88,425 ​ $ 1,750,049 ​ $ 586,386 ​ $ 865,747 ​ $ 543,937 ​ NOTE 1: Investment income is not allocated to the segments, therefore, net investment income has not been provided. ​ See the accompanying reports of independent registered public accounting firms starting on page 91 of this report. ​ 99 Table of Contents RLI CORP. AND SUBSIDIARIES SCHEDULE III—SUPPLEMENTARY INSURANCE INFORMATION (continued) As of and for the years ended December 31, 2022, 2021 and 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Incurred ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ losses and ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ settlement ​ Policy ​ Other ​ Net ​ ​ expenses ​ acquisition ​ operating ​ premiums (in thousands) prior year costs expenses written Year ended December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Casualty segment ​ $ ( 87,225 ) ​ $ 204,397 ​ $ 52,210 ​ $ 744,607 Property segment ​ ​ ( 24,927 ) ​ ​ 95,203 ​ ​ 19,416 ​ ​ 364,644 Surety segment ​ ​ ( 10,427 ) ​ ​ 70,032 ​ ​ 10,586 ​ ​ 132,285 RLI Insurance Group ​ $ ( 122,579 ) ​ $ 369,632 ​ $ 82,212 ​ $ 1,241,536 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Casualty segment ​ $ ( 108,632 ) ​ $ 179,354 ​ $ 47,139 ​ $ 674,709 Property segment ​ ​ ( 10,981 ) ​ ​ 72,008 ​ ​ 18,605 ​ ​ 262,816 Surety segment ​ ​ ( 5,850 ) ​ ​ 66,106 ​ ​ 11,163 ​ ​ 120,008 RLI Insurance Group ​ $ ( 125,463 ) ​ $ 317,468 ​ $ 76,907 ​ $ 1,057,533 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Casualty segment ​ $ ( 75,075 ) ​ $ 162,058 ​ $ 40,937 ​ $ 583,244 Property segment ​ ​ ( 13,019 ) ​ ​ 59,926 ​ ​ 15,620 ​ ​ 196,603 Surety segment ​ ​ ( 12,959 ) ​ ​ 64,454 ​ ​ 10,271 ​ ​ 112,241 RLI Insurance Group ​ $ ( 101,053 ) ​ $ 286,438 ​ $ 66,828 ​ $ 892,088 ​ See the accompanying reports of independent registered public accounting firms starting on page 91 of this report. ​ 100 Table of Contents RLI CORP. AND SUBSIDIARIES SCHEDULE IV—REINSURANCE Years ended December 31, 2022, 2021 and 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage ​ ​ ​ ​ ​ ​ Ceded to ​ Assumed ​ ​ ​ ​ of amount ​ ​ Direct ​ other ​ from other ​ Net ​ assumed (in thousands) amount companies companies amount to net 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Casualty segment ​ $ 863,530 ​ $ 186,469 ​ $ 34,771 ​ $ 711,832 ​ 4.9 % Property segment ​ ​ 430,010 ​ ​ 122,415 ​ ​ 291 ​ ​ 307,886 ​ 0.1 % Surety segment ​ ​ 131,625 ​ ​ 7,525 ​ ​ 618 ​ ​ 124,718 ​ 0.5 % RLI Insurance Group premiums earned ​ $ 1,425,165 ​ $ 316,409 ​ $ 35,680 ​ $ 1,144,436 ​ 3.1 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Casualty segment ​ $ 788,741 ​ $ 185,433 ​ $ 30,331 ​ $ 633,639 ​ 4.8 % Property segment ​ ​ 310,630 ​ ​ 79,094 ​ ​ 301 ​ ​ 231,837 ​ 0.1 % Surety segment ​ ​ 122,975 ​ ​ 7,866 ​ ​ 318 ​ ​ 115,427 ​ 0.3 % RLI Insurance Group premiums earned ​ $ 1,222,346 ​ $ 272,393 ​ $ 30,950 ​ $ 980,903 ​ 3.2 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Casualty segment ​ $ 690,718 ​ $ 148,271 ​ $ 27,074 ​ $ 569,521 ​ 4.8 % Property segment ​ ​ 253,781 ​ ​ 70,398 ​ ​ 337 ​ ​ 183,720 ​ 0.2 % Surety segment ​ ​ 118,109 ​ ​ 5,843 ​ ​ 240 ​ ​ 112,506 ​ 0.2 % RLI Insurance Group premiums earned ​ $ 1,062,608 ​ $ 224,512 ​ $ 27,651 ​ $ 865,747 ​ 3.2 % ​ See the accompanying reports of independent registered public accounting firms starting on page 91 of this report. ​ 101 Table of Contents RLI CORP. AND SUBSIDIARIES SCHEDULE V—VALUATION AND QUALIFYING ACCOUNTS Years ended December 31, 2022, 2021 and 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance ​ Amounts ​ Amounts ​ Balance ​ ​ at beginning ​ charged ​ recovered ​ at end of (in thousands) of period to expense (written off) period 2022 Allowance for uncollectible reinsurance ​ $ 27,243 ​ $ 130 ​ $ ( 50 ) ​ $ 27,323 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2021 Allowance for uncollectible reinsurance ​ $ 24,539 ​ $ 2,863 ​ $ ( 159 ) ​ $ 27,243 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2020 Allowance for uncollectible reinsurance ​ $ 25,066 ​ $ ( 522 ) ​ $ ( 5 ) ​ $ 24,539 ​ See the accompanying reports of independent registered public accounting firms starting on page 91 of this report. ​ 102 Table of Contents RLI CORP. AND SUBSIDIARIES SCHEDULE VI—SUPPLEMENTARY INFORMATION CONCERNING PROPERTY-CASUALTY INSURANCE OPERATIONS Years ended December 31, 2022, 2021 and 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) ​ Deferred policy ​ Claims and ​ Unearned ​ Net ​ Net ​ ​ acquisition ​ claim adjustment ​ premiums, ​ premiums ​ investment Affiliation with Registrant (1) costs expense reserves gross earned income 2022 ​ $ 127,859 ​ $ 2,315,637 ​ $ 785,085 ​ $ 1,144,436 ​ $ 86,078 2021 ​ $ 103,553 ​ $ 2,043,555 ​ $ 680,444 ​ $ 980,903 ​ $ 68,862 2020 ​ $ 88,425 ​ $ 1,750,049 ​ $ 586,386 ​ $ 865,747 ​ $ 67,893 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Claims and claim adjustment ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ expenses incurred related to: ​ Amortization ​ Paid claims and ​ Net ​ ​ Current ​ Prior ​ of deferred ​ claim adjustment ​ premiums ​ year year acquisition costs expenses written 2022 ​ $ 636,955 ​ $ ( 122,579 ) ​ $ 369,632 ​ $ 374,297 ​ $ 1,241,536 2021 ​ $ 582,065 ​ $ ( 125,463 ) ​ $ 317,468 ​ $ 327,453 ​ $ 1,057,533 2020 ​ $ 543,937 ​ $ ( 101,053 ) ​ $ 286,438 ​ $ 325,054 ​ $ 892,088 (1) Consolidated property-casualty insurance operations. (2) See the accompanying reports of independent registered public accounting firms starting on page 91 of this report. ​ 103 Table of Contents EXHIBIT INDEX ​ ​ ​ Exhibit No. Description of Document Reference ​ ​ ​ ​ ​ 3.1 ​ Amended and Restated Certificate of Incorporation ​ Incorporated by reference to the Company’s Form 8-K filed May 8, 2020. ​ ​ ​ ​ ​ 3.2 ​ By-Laws ​ Incorporated by reference to the Company’s Form 8-K filed May 8, 2018. ​ ​ ​ ​ ​ 4.1 ​ Senior Indenture ​ Incorporated by reference to the Company’s Form 8-K filed October 2, 2013. ​ ​ ​ ​ ​ 4.2 ​ Supplemental Indenture ​ Incorporated by reference to the Company’s Form 8-K filed May 8, 2018. ​ ​ ​ ​ ​ 4.3 ​ Description of Securities ​ Attached as Exhibit 4.3. ​ ​ ​ ​ ​ 10.1 ​ RLI Corp. Nonqualified Agreement* ​ Incorporated by reference to the Company’s Form 10-K filed on February 21, 2020. ​ ​ ​ ​ ​ 10.2 ​ RLI Corp. Nonemployee Directors’ Deferred Compensation Plan, as amended* ​ Incorporated by reference to the Company’s Form 10-K filed on February 21, 2020. ​ ​ ​ ​ ​ 10.3 ​ RLI Corp. Executive Deferred Compensation Plan, as amended* ​ Incorporated by reference to the Company’s Form 10-K filed on February 18, 2022. ​ ​ ​ ​ ​ 10.4 ​ RLI Corp. 2010 Long-Term Incentive Plan* ​ Incorporated by reference to the Company’s Form 8-K filed on May 6, 2010. ​ ​ ​ ​ ​ 10.5 ​ RLI Corp. Annual Incentive Compensation Plan, as amended* ​ Incorporated by reference to the Company’s Form 10-Q filed July 24, 2020. ​ ​ ​ ​ ​ 10.6 ​ 2023 Market Value Potential (MVP), Executive Incentive Program Guideline* ​ Attached as Exhibit 10.6. ​ ​ ​ ​ ​ 10.7 ​ RLI Corp. 2015 Long-Term Incentive Plan, as amended* ​ Incorporated by reference to the Company’s Form 10-Q filed on July 24, 2020. ​ ​ ​ ​ ​ 10.8 ​ Management Incentive Program Guideline* ​ Attached as Exhibit 10.8. ​ ​ ​ ​ ​ 10.9 ​ RLI Underwriting Profit Program Guideline* ​ Attached as Exhibit 10.9. ​ ​ ​ ​ ​ 10.10 ​ Advances, Collateral Pledge, and Security Agreement (Federal Home Loan Bank of Chicago) ​ Incorporated by reference to the Company’s Form 8-K filed September 26, 2014. ​ ​ ​ ​ ​ 10.11 ​ Credit Agreement (Bank of Montreal, Chicago Branch.) ​ Incorporated by reference to the Company’s Form 8-K filed March 31, 2020. ​ ​ ​ ​ ​ 10.12 ​ RLI Corp. Director and Officer Indemnification Agreement ​ Incorporated by reference to the Company’s Form 10-Q filed October 24, 2018. ​ ​ ​ ​ ​ 10.13 ​ ​ Amended 2022 MVP Executive Incentive Program Guideline* ​ Attached as Exhibit 10.13. * Management contract or compensatory plan. ​ 104 Table of Contents EXHIBIT INDEX ​ ​ ​ ​ ​ ​ ​ Exhibit No. Description of Document Reference ​ ​ ​ ​ ​ 21.1 ​ Subsidiaries of the Registrant ​ Attached as Exhibit 21.1. ​ ​ ​ ​ ​ 23.1 ​ Consent of Deloitte & Touche LLP ​ Attached as Exhibit 23.1. ​ ​ ​ ​ ​ 31.1 ​ Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 ​ Attached as Exhibit 31.1. ​ ​ ​ ​ ​ 31.2 ​ Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 ​ Attached as Exhibit 31.2. ​ ​ ​ ​ ​ 32.1 ​ Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 ​ Attached as Exhibit 32.1. ​ ​ ​ ​ ​ 32.2 ​ Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 ​ Attached as Exhibit 32.2. ​ ​ ​ ​ ​ 101 ​ iXBRL-Related Documents ​ Attached as Exhibit 101. ​ ​ ​ ​ ​ 104 ​ Cover Page Interactive Data File ​ Embedded in Inline XBRL and contained in Exhibit 101. ​ ​ ​ 105 Table of Contents SIGNATURES ​ Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ​ RLI Corp. (Registrant) ​ ​ By: /s/ Todd W. Bryant ​ ​ Todd W. Bryant, Chief Financial Officer ​ ​ ​ ​ Date: February 24, 2023 ​ ​ Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. ​ ​ By: /s/ Craig W. Kliethermes ​ By: /s/ Todd W. Bryant ​ Craig W. Kliethermes, President & CEO ​ ​ Todd W. Bryant, Chief Financial Officer ​ (Principal Executive Officer) ​ ​ (Principal Financial and Accounting Officer) ​ ​ ​ ​ ​ Date: February 24, 2023 ​ Date: February 24, 2023 ​ ​ ​ ​ ​ By: /s/ Kaj Ahlmann ​ By: /s/ Craig W. Kliethermes ​ Kaj Ahlmann, Director ​ ​ Craig W. Kliethermes, Director ​ ​ ​ ​ ​ Date: February 24, 2023 ​ Date: February 24, 2023 ​ ​ ​ ​ ​ By: /s/ Michael E. Angelina ​ By: /s/ Paul B. Medini ​ Michael E. Angelina, Director ​ ​ Paul B. Medini, Director ​ ​ ​ ​ ​ Date: February 24, 2023 ​ Date: February 24, 2023 ​ ​ ​ ​ ​ By: /s/ John T. Baily ​ By: /s/ Jonathan E. Michael ​ John T. Baily, Director ​ ​ Jonathan E. Michael, Director ​ ​ ​ ​ ​ Date: February 24, 2023 ​ Date: February 24, 2023 ​ ​ ​ ​ ​ By: /s/ David B. Duclos ​ By: /s/ Robert P. Restrepo, Jr. ​ David B. Duclos, Director ​ ​ Robert P. Restrepo, Jr., Director ​ ​ ​ ​ ​ Date: February 24, 2023 ​ Date: February 24, 2023 ​ ​ ​ ​ ​ By: /s/ Susan S. Fleming ​ By: /s/ Debbie S. Roberts ​ Susan S. Fleming, Director ​ ​ Debbie S. Roberts, Director ​ ​ ​ ​ ​ Date: February 24, 2023 ​ Date: February 24, 2023 ​ ​ ​ ​ ​ By: /s/ Jordan W. Graham ​ By: /s/ Michael J. Stone ​ Jordan W. Graham, Director ​ ​ Michael J. Stone, Director ​ ​ ​ ​ ​ Date: February 24, 2023 ​ Date: February 24, 2023 ​ ​ ​ ​ ​ ​ ​ 106