I reprimand her sometimes--I go into the room and demand she close her book and fall asleep.
Then sometimes I don't. I just let her read until she falls asleep--whatever time that may be.
See I remember being a little kid who would read under her covers using a flashlight--scared my grandma would wake up, catch me reading late at night, and force me to close my book. She loved me deeply and felt that my sleep and my studies (of which success relied on me not being tired at school) were more important than whatever book I was reading.
I bet there were plenty of times she knew I was reading under the covers and didn't say anything. Probably for the same reason I don't say anything to Lia--because she knew how much joy and happiness it brought me.
Here's a picture of my 9 year old reading a biography on Condoleezza Rice with her Encyclopedia of Marvel Comics open on her pillow.