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The following is an excerpt from a DEF 14A SEC Filing, filed by RLI CORP on 3/27/1998.
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RLI CORP - DEF 14A - 19980327 - PROPOSAL_1

PROPOSAL ONE:
ELECTION OF DIRECTORS

NOMINEES. At the Annual Meeting, three (3) directors are to be elected, each to hold office for a three-year term or until a successor is elected and qualified. Messrs. Gerald D. Stephens and Robert O. Viets are Class II directors who were elected by the shareholders in 1995 for three-year terms expiring in 1998. Mr. Haayen is currently a member of the Board as a Class I director. In order to comply with provisions of the Company's By-Laws requiring director classes to be as nearly equal in number as possible, Mr. Haayen intends to resign as a Class I director and is being nominated as a Class II director. As a Class I director, Mr.


Haayen's term would have expired in 2000. If elected as a Class II director, Mr. Haayen's term will expire in 2001.

VOTING OF PROXIES. Unless otherwise instructed, the shares represented by the enclosed Proxy will be voted for the election of the three nominees named above. The affirmative vote of a plurality of the shares present in person or represented by Proxy at the Annual Meeting and entitled to vote is required for the election of directors. Votes will be tabulated by an Inspector of Election appointed at the Annual Meeting. Shares may be voted for, or withheld from, each nominee. Shares that are withheld and broker non-votes have no effect on determinations of plurality except to the extent that they affect the total votes received by any particular nominee. There is no cumulative voting for the directors under the Company's Articles of Incorporation.

SUBSTITUTE NOMINEES. The Board of Directors has no reason to believe that any nominee will be unable to serve if elected. In the event that any nominee shall become unavailable for election, the shares represented by the enclosed Proxy will be voted for the election of a substitute nominee selected by the persons named in the enclosed Proxy unless the Board of Directors should determine to reduce the number of directors pursuant to the Company's By-Laws.

DIRECTOR AND NOMINEE INFORMATION. The following includes certain information with respect to the current directors and nominees to the Board of Directors furnished to the Company by such individuals:

                                  DIRECTOR            PRINCIPAL
NAME                    AGE       SINCE               OCCUPATION


Richard J. Haayen        73        1993      Chairman and CEO of Allstate
                                             Insurance Company in Northbrook,
(to be elected for a term                    Ill., until his retirement in 1989.
of three years expiring                      Currently Executive-In-Residence at
in 2001)                                     Southern Methodist University in Dallas,
                                             Texas.

PICTURE


Gerald D. Stephens       65        1965      Mr. Stephens founded the Company
                                             in 1965 and has been President
(to be elected for a term                    since 1972.
of three years expiring
in 2001)

PICTURE


Robert O. Viets (1)      54        1993      President and CEO since 1988 of
                                             Cilcorp Inc., a holding company


(to be elected for a term of three           in Peoria, Ill., whose principal
years expiring in 2001)                      business subsidiary is Central
                                             Illinois Light Company ("CILCO").
                                             Mr. Viets joined CILCO in 1973 and
                                             held various managerial and officer
                                             positions until his promotion to
                                             President and CEO.

PICTURE

Certain information concerning the remaining directors, whose terms expire either in 1999 or 2000, is set forth as follows based upon information furnished to the Company by such individuals:

Bernard J. Daenzer       82        1972      Owner of Daenzer Associates, Key
                                             Largo, Fla., an insurance
                                             consulting services firm since
                                             1980.  Formerly President and
(term expiring in 2000)                      Chairman of Wolhreich and Anderson
                                             Insurance Companies and the Howden
                                             Swan Insurance Agencies until his
                                             retirement in 1980.
PICTURE

William R. Keane         81        1966      Former Vice President,   Contacts,
                                             Inc. (contact lens laboratory)
(term expiring in 1999)                      in Chicago, Ill., until retirement
                                             in 1983.

PICTURE

Gerald I. Lenrow         70        1993      Consultant to General
(term expiring in 1999)                      Reinsurance Corporation since
                                             1996. Former partner in the
                                             international accounting firm of
                                             Coopers & Lybrand LLP until 1990,
                                             following which he served as its
                                             consultant until joining General
                                             Reinsurance Corporation.
PICTURE

Jonathan E. Michael      44        1997      Executive Vice President of the
                                             Company; President, Chief
(term expiring in 2000)                      Operating Officer of RLI
                                             Insurance Company and Mt. Hawley
                                             Insurance Company, the Company's
                                             wholly-owned subsidiaries. Mr.
                                             Michael commenced employment with
                                             the Company as Chief Accountant
PICTURE                                      in 1982.


Edwin S. Overman         75        1987      President Emeritus of the


(term expiring in 1999)                      Insurance Institute of America,
                                             a national educational organization
                                             in Malvern, Pa., since his
                                             retirement as President of the
                                             Institute in 1987.
PICTURE

Edward F. Sutkowski (2)  59        1975      President of the law firm of
                                             Sutkowski & Washkuhn Ltd. in
(term expiring in 2000)                      Peoria, Ill., since 1965.

PICTURE

(1) Mr. Viets is a director of Cilcorp Inc. in Peoria, Illinois, and Consumers Water Company in Portland, Maine, whose securities are registered pursuant to Section 12 or subject to the requirements of Section 15(d) of the Securities and Exchange Act of 1934.

(2) Mr. Sutkowski is associated with the law firm of Sutkowski & Washkuhn Ltd., which has provided legal services to the Company prior to and during 1997. It is expected that the Company's relationship with Sutkowski & Washkuhn Ltd. will continue in the future.

BOARD COMMITTEES

AUDIT COMMITTEE. The Company's Audit Committee, comprised of outside directors Messrs. Haayen, Keane, Lenrow and Viets, met two times in 1997 to consider an outside audit firm and to discuss the planning of the Company's annual outside audit and its results. The Audit Committee also monitored the Company's management of its exposures to risk of financial loss, assessed the auditors' performance, reviewed the adequacy of the Company's internal controls, and the extent and scope of audit coverage, monitored selected financial reports, and made audit and auditor engagement recommendations to the Board of Directors.

EXECUTIVE RESOURCES COMMITTEE. The Company's Executive Resources Committee, comprised of outside directors Messrs. Daenzer, Haayen, Lenrow and Overman, met one time in 1997 to review and recommend the compensation of the executive officers and other officers of the Company. The Committee also evaluated executive performance, executive back-up plans, examined the officer development program, and was responsible for searching, enlisting and maintaining a file of prospective new Board members and potential executive officers. The Committee administers the Company's Stock Option Plans through a committee comprised of outside directors Messrs. Daenzer, Haayen, Keane, Overman and Viets.


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