Pricingpressure on RLI Corp.'smedical malpractice business has led to declining premium volume and ultimatelya $7.2 million noncash goodwill impairment that the company booked for the secondquarter.

CFO ThomasBrown said during RLI's second-quarter earnings call that the company it acquiredin 2012 is still profitable, though at a lower premium level and higher combinedratio.

SinceRLI purchased RockbridgeUnderwriting Agency Ltd., the business has experienced rate declines that have accompaniedtop-line contraction, Brown said. The second quarter brought with it several adverseclaims and large losses along with a hike in combined ratio, he noted.

RLI has reduced its book in that practice to just north of $10million, but remains committed to the business and is confident that its performancewill improve, the CFO said.