Late Thursday, RLI Corp. announced that its board of directors has declared an extraordinary cash dividend of $3.00 per share of common stock, which is expected to total approximately $65 million, and a regular quarterly cash dividend of $0.34 per share, unchanged from the prior quarter.

In addition, the board announced a two-for-one stock split.

Both dividends are payable on Dec. 20, 2013, to shareholders of record as of Nov. 29, 2013.

The two-for-one stock split is for shareholders of record as of Dec. 30, 2013, and will be payable on January 15, 2014.

Both the regular and special dividends will be paid on the pre-split shares.

“Our view is that the right way to run a company is to return that excess capital to our shareholders as opposed to stockpiling it and reducing our returns,” Michael Stone, president and chief operating officer, told Carrier Management in a phone interview on Friday, explaining the special dividend.

Carrier Management will publish a feature profiling Stone in February 2014.

“We’ve done that four years in a row now—basically because our businesses performed better than we expected, and we haven’t found as many opportunities as we would like…to put that capital to work,” he said, noting, however, that the company continues to look for opportunities to deploy the capital.

Explaining the stock split, Stone said with a “nice run-up” in the stock price over the last decade—”and certainly over the last year”—has lifted the price to near $100 per share. Splitting the stock reduces the share price to a level that’s more economical for the individual investor, and the employees, who all participate in an employee stock plan.

“It has a good a psychological effect on the employees, and at the end of the day, the employees are the ones that are creating the value,” Stone said.

In a statement about the dividend and stock split, RLI Corp. Chairman & CEO Jonathan E. Michael, said: “RLI has a long history of book value growth and stock price appreciation. In the past, stock splits have been a way to acknowledge that success, and today’s announcement carries forward that tradition.”

Michael said that going forward, he is optimistic that RLI can fulfill its first priority for capital, “which is putting it to work to grow our business profitably.”

“Today’s special dividend announcement by the RLI Board of Directors acknowledges our strong financial performance,” he said. “In addition to generating significant capital through solid underwriting and investment results, RLI has consistently been able to use capital to grow our business. This growth is a result of new products we have launched, niche acquisitions and the hard work of our talented underwriters, who continue to find opportunities in a challenging economic environment.”

Michael discussed some ingredients in RLI’s recipe for success during a video interview at the PCI conference last month.

Since the beginning of 2009, RLI has returned more than $600 million to shareholders, including last week’s announced dividends, in the form of dividends and share repurchases.

Last year, RLI paid an extraordinary cash dividend of $5.00, or roughly $105 million.

RLI, a specialty insurance company, offers a diversified portfolio of property and casualty coverages and surety bonds serving niche or underserved markets.