Schedule II -Condensed Financial Information of Registrant (Parent Company)

12 Months Ended

Dec. 31, 2023

Condensed Financial Information Of Parent Company Only Disclosure [Abstract]

Schedule II -Condensed Financial Information of Registrant (Parent Company)

RLI CORP. AND SUBSIDIARIES

SCHEDULE II—CONDENSED FINANCIAL INFORMATION OF REGISTRANT

(PARENT COMPANY)

CONDENSED BALANCE SHEETS

December 31,

(in thousands, except share data)	2023		2022
ASSETS
Cash	$	1,048	$	1,051
Short-term investments, at cost which approximates fair value		76,926		2,229
Accounts receivable, affiliates		2,393		1,572
Investments in subsidiaries		1,312,323		1,084,055
Fixed income:
Available-for-sale, at fair value		67,029		237,282
(amortized cost of $78,431 and allowance for credit losses of $0 in 2023)
(amortized cost of $250,904 and allowance for credit losses of $0 in 2022)
Property and equipment, at cost, net of accumulated depreciation of $1,375 in 2023 and $1,340 in 2022		1,375		1,410
Income taxes - deferred		3,101		3,204
Other assets		6,170		3,840
TOTAL ASSETS	$	1,470,365	$	1,334,643
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES
Income taxes payable - current	$	778	$	1,823
Debt		50,000		149,863
Interest payable on debt		157		2,153
Other liabilities		5,916		3,463
TOTAL LIABILITIES	$	56,851	$	157,302
SHAREHOLDERS' EQUITY
Common stock ($0.01 par value)
(Shares authorized - 200,000,000)
(68,570,261 shares issued and 45,640,047 shares outstanding in 2023)
(68,399,966 shares issued and 45,469,752 shares outstanding in 2022)	$	686	$	684
Paid-in capital		362,345		352,391
Accumulated other comprehensive earnings		(166,303)		(229,076)
Retained earnings		1,609,785		1,446,341
Deferred compensation		13,539		12,015
Treasury stock, at cost (22,930,214 shares in 2023 and 2022)		(406,538)		(405,014)
TOTAL SHAREHOLDERS’ EQUITY	$	1,413,514	$	1,177,341
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,470,365	$	1,334,643

See Notes to Consolidated Financial Statements. See also the accompanying reports of independent registered public accounting firms starting on page 90 of this report.

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)	2023		2022		2021
Net investment income	$	10,351	$	6,245	$	2,102
Net realized gains (losses)		14,134		570,888		(625)
Equity in earnings of unconsolidated investee		—		372		22,786
Selling, general and administrative expenses		(15,917)		(12,900)		(13,330)
Interest expense on debt		(6,543)		(7,622)		(7,616)
Earnings before income taxes	$	2,025	$	556,983	$	3,317
Income tax expense (benefit)		(1,802)		108,699		(1,585)
Net earnings before equity in net earnings of subsidiaries	$	3,827	$	448,284	$	4,902
Equity in net earnings of subsidiaries		300,784		135,127		274,452
Net earnings	$	304,611	$	583,411	$	279,354
Other comprehensive earnings (loss), net of tax
Unrealized gains (losses) on securities:
Unrealized holding gains (losses) arising during the period	$	1,754	$	(12,188)	$	(1,996)
Less: reclassification adjustment for (gains) losses included in net earnings		—		115		500
Other comprehensive earnings (loss) - parent only	$	1,754	$	(12,073)	$	(1,496)
Equity in other comprehensive earnings (loss) of subsidiaries/investees		61,019		(266,829)		(57,392)
Other comprehensive earnings (loss)	$	62,773	$	(278,902)	$	(58,888)
Comprehensive earnings	$	367,384	$	304,509	$	220,466

See Notes to Consolidated Financial Statements. See also the accompanying reports of independent registered public accounting firms starting on page 90 of this report.

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)	2023		2022		2021
Cash flows from operating activities
Earnings before equity in net earnings of subsidiaries	$	3,827	$	448,284	$	4,902
Adjustments to reconcile net losses to net cash provided by (used in) operating activities:
Net realized (gains) losses		(14,134)		(570,888)		625
Depreciation		35		64		68
Other items, net		1,350		1,403		3,966
Change in:
Affiliate balances receivable/payable		(821)		(724)		(3,404)
Federal income taxes		(1,409)		(19,484)		5,901
Changes in investment in unconsolidated investee:
Undistributed earnings		—		(372)		(22,786)
Net cash used in operating activities	$	(11,152)	$	(141,717)	$	(10,728)
Cash flows from investing activities
Purchase of:
Fixed income, available-for-sale	$	(89,501)	$	(1,356,177)	$	(33,373)
Other		(1,832)		(1,420)		(2,904)
Sale of:
Fixed income, available-for-sale		—		1,373		5,306
Equity method investee		14,134		686,566		—
Other		54		221		1,245
Property and equipment		—		298		—
Call or maturity of:
Fixed income, available-for-sale		263,939		1,192,050		2,878
Net purchase of short-term investments		(74,696)		(2,229)		—
Cash dividends received-subsidiaries		145,000		13,000		180,000
Net cash provided by investing activities	$	257,098	$	533,682	$	153,152
Cash flows from financing activities
Proceeds from stock option exercises	$	1,245	$	(465)	$	1,838
Proceeds from issuance of debt		50,000		—		—
Repayment of debt		(150,000)		—		—
Cash dividends paid		(152,508)		(397,323)		(147,422)
Other		5,314		5,441		4,212
Net cash used in financing activities	$	(245,949)	$	(392,347)	$	(141,372)
Net increase (decrease) in cash	$	(3)	$	(382)	$	1,052
Cash at beginning of year		1,051		1,433		381
Cash at end of year	$	1,048	$	1,051	$	1,433

Interest paid on outstanding debt amounted to $8 million, $7 million and $7 million for 2023, 2022 and 2021, respectively. See Notes to Consolidated Financial Statements. See also the accompanying reports of independent registered public accounting firms starting on page 90 of this report.