___________________________________________________________________

(cover page continued)

______________________________________________________________________________

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

For the fiscal year ended December 31, 2005

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

For the transition period from __________ to __________

Commission file number 001-02658

______________________

STEWART INFORMATION SERVICES CORPORATION

(Exact name of registrant as specified in its charter)

Delaware 74-1677330

(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)

1980 Post Oak Blvd., Houston, Texas 77056

(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (713) 625-8100

______________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class of stock Name of each exchange on which registered

Common Stock, $1 par value New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: NONE

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ; No 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes  No ;

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange

Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been

subject to such filing requirements for the past 90 days. Yes ; No 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be

contained, to the best of registrant

’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this

Form 10-K or any amendment to this Form 10-K. ;

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of

“accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. Large Accelerated Filer ; Accelerated Filer 

Non-Accelerated Filer 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes  No ;

The aggregate market value of the Common Stock (based upon the closing sales price of the Common Stock of Stewart Information Services

Corporation, as reported by the NYSE on June 30, 2005) held by non-affiliates of the Registrant was approximately $717,556,602.

As of March 2, 2006, the following shares of each of the registrant’s classes of stock were outstanding:

Common, $1 par value 17,146,697

Class B Common, $1 par value 1,050,012

Documents Incorporated by Reference

Portions of the definitive proxy statement (the Proxy Statement), relating to the annual meeting of the registrant

’s stockholders to be held

April 28, 2006, are incorporated by reference in Parts III and IV of this document.

_________________________________________________________________________________________________________________

FORM 10-K

ANNUAL REPORT

Year Ended December 31, 2005

TABLE OF CONTENTS

Item

No. Page

PART I

1. Business .................................................................................................................................................. 1

1A. Risk Factors ............................................................................................................................................ 4

1B. Unresolved Staff Comments.................................................................................................................... 7

2. Properties ................................................................................................................................................ 7

3. Legal Proceedings ................................................................................................................................... 7

4. Submission of Matters to a Vote of Security Holders ............................................................................. 7

PART II

5. Market for Registrant’s Common Equity and Related Stockholder Matters ........................................... 8

6. Selected Financial Data ........................................................................................................................... 9

7. Management’s Discussion and Analysis of Financial Condition and

Results of Operations ...........................................................................................................................

10

7A. Quantitative and Qualitative Disclosures About Market Risk ................................................................ 16

8. Financial Statements and Supplementary Data ....................................................................................... 16

9. Changes in and Disagreements With Accountants on Accounting

and Financial Disclosure ....................................................................................................................

16

9A. Controls and Procedures ......................................................................................................................... 16

9B. Other Information ................................................................................................................................... 17

PART III

10. Directors and Executive Officers of the Registrant ................................................................................ 18

11. Executive Compensation ........................................................................................................................ 18

12. Security Ownership of Certain Beneficial Owners and Management ..................................................... 18

13. Certain Relationships and Related Transactions ..................................................................................... 18

14. Principal Accounting Fees and Services ................................................................................................. 18

PART IV

15. Exhibits and Financial Statement Schedules ........................................................................................... 18

Signatures ............................................................................................................................................... 19

As used in this report, “we”, “us”, “our”, the “Company”, and “Stewart” mean Stewart Information Services Corporation

and our subsidiaries, unless the context indicates otherwise.

- 1 -

P A R T I

Item 1. Business

We are a Delaware corporation formed in 1970. We and our predecessors have been engaged in the title business since 1893.

Stewart is a technology-driven, strategically competitive, real estate information and transaction management

company providing title insurance and related information services. Stewart delivers via e-commerce the services required for

settlement by the real estate and mortgage industries – including title reports, flood certificates, credit reports, appraisals and

automated valuation models, document preparation, property information reports and background checks. Stewart also

provides post-closing lender services, mortgage default management solutions, automated county clerk land records, property

ownership mapping, geographic information systems and expertise in tax-deferred exchanges.

Our two main segments of business are title insurance-related services and real estate information (REI). The

segments significantly influence business to each other because of the nature of their operations and their common customers.

The segments provide services through a network of offices, including more than 8,500 policy-issuing offices and agencies in

the United States and several international markets. Our current levels of international operations are immaterial with respect

to our consolidated financial results.

The financial information related to these segments is discussed in Item 7 – Management’s Discussion and Analysis of

Financial Condition and Results of Operations.

Title

The title segment includes the functions of searching, examining, closing and insuring the condition of the title to real property.

Examination and closing. The purpose of a title examination is to ascertain the ownership of the property being

transferred, debts that are owed on it and the scope of the title policy coverage. This involves searching for and examining

documents such as deeds, mortgages, wills, divorce decrees, court judgments, liens, paving assessments and tax records.

At the closing or “settlement” of a sale transaction, the seller executes and delivers a deed to the new owner. The

buyer typically signs new mortgage documents. Closing funds are then disbursed to the seller, the prior mortgage company,

real estate brokers, the title company and others. The documents are then recorded in the public records. A title policy is

generally issued to both the lender and the new owner.

Title policies. Lenders in the United States generally require title insurance as a condition to making a loan on real

estate, including securitized lending. This is to assure lenders of the priority of their lien position. The purchasers of the

property want insurance to protect against claims that may arise against the ownership of the property. The face amount of the

policy is normally the purchase price or the amount of the related loan.

Title insurance is substantially different from other types of insurance. Fire, auto, health and life insurance protect

against future losses and events. In contrast, title insurance insures against losses from past events and seeks to eliminate most

risks through the examination and settlement process.

Investments. Our title insurance underwriters maintain investments in accordance with certain statutory requirements

for the funding of statutory premium reserves and state deposits. We have established policies and procedures to minimize our

exposure to changes in the fair values of our investments. These policies include retaining an investment advisory firm,

emphasizing credit quality, managing portfolio duration, maintaining or increasing investment income through high coupon

rates, and actively managing profile and security mix based upon market conditions. All of our investments are classified as

available-for-sale.

Losses. Losses on policies occur when a title defect is not discovered during the examination and settlement process.

Reasons for losses include forgeries, misrepresentations, unrecorded liens, the failure to pay off existing liens, mishandling of

settlement funds, issuance by title agencies of unauthorized coverages and other legal issues.

Some claimants seek damages in excess of policy limits. Those claims are based on various legal theories usually

alleging misrepresentation by an agency. Although we vigorously defend against spurious claims, we have from time to time

incurred losses in excess of policy limits.

- 2 -

Experience shows that most claims against policies and claim payments are made in the first six years after the policy

has been issued, although claims are also incurred and paid many years later. By their nature, claims are often complex, vary

greatly in dollar amounts and are affected by economic and market conditions and the legal environment existing at the time of

settlement of the claims. Estimating future title loss payments is difficult because of the complex nature of title claims, the length

of time over which claims are paid, the significantly varying dollar amounts of individual claims and other factors.

Provisions for policy losses are charged to income in the same year the related premium revenues are recognized. The

amounts provided are based on reported claims, historical loss experience, title industry averages, current legal environment and

types of policies written.

Our liability for estimated title losses comprises both known claims and claims expected to be reported in the future. The

amount of our loss reserve represents the aggregate future payments, net of recoveries, that we expect to incur on policy and escrow

losses and in costs to settle claims.

Amounts shown as our estimated liability for future loss payments are continually reviewed by us for reasonableness and

adjusted as appropriate. Independent actuaries also reviewed the adequacy of the liability amounts on an annual basis and found our

reserves adequate at each year end. In accordance with industry practice, the amounts have not been discounted to their present

values.

Factors affecting revenues. Title revenues are closely related to the level of activity in the real estate markets we serve

and the prices at which real estate sales are made. Real estate sales are directly affected by the availability and cost of money

to finance purchases. Other factors include consumer confidence and demand by buyers. These factors may override the

seasonal nature of the title business. Generally, our first quarter is the least active and the fourth quarter is the most active in

terms of title revenues .

Selected information for the national real estate industry follows (2005 figures are preliminary and subject to

revision):

2005

2004 2003

New home sales – in millions ...............................................................

1.28

1.20 1.09

Existing home sales – in millions..........................................................

7.07

6.78 6.18

Existing home sales – median sales price in $ thousands......................

207.6

184.0 168.5

Customers. The primary sources of title business are attorneys, builders, developers, lenders and real estate brokers.

No one customer was responsible for as much as ten percent of our title operating revenues in any of the last three years. Titles

insured include residential and commercial properties, undeveloped acreage, farms, ranches and water rights.

Service, location, financial strength, size and related factors affect customer acceptance. Increasing market share is

accomplished primarily by providing superior service. The parties to a closing are concerned with personal schedules and the

interest and other costs associated with any delays in the settlement. The rates charged to customers are regulated, to varying

degrees, in many states.

Financial strength and stability of the title underwriter are important factors in maintaining and increasing our agency

network. Among the nation’s leading title insurers, we earned one of the highest ratings awarded by the title industry’s leading

rating companies. Our principal underwriter, Stewart Title Guaranty Company (Guaranty) is currently rated A" by Demotech,

Inc., A+ by Fitch and A by Lace Financial.

Market share. Title insurance statistics are compiled quarterly by the title industry’s national association. Based on

unconsolidated statutory net premiums written through September 30, 2005, Guaranty is one of the leading title insurers in the

United States.

Our principal competitors include Fidelity National Financial, Inc., The First American Corporation and LandAmerica

Financial Group, Inc. Like most title insurers, we also compete with abstractors, attorneys who issue title opinions and

attorney-owned title insurance funds. A number of homebuilders, financial institutions, real estate brokers and others own or

control title insurance agencies, some of which issue policies underwritten by Guaranty. This controlled business also provides

competition for our offices. We also compete with issuers of alternatives to title insurance products, which typically provide

more limited coverage and less service for a smaller fee.

- 3 -

Title revenues by state. The approximate amounts and percentages of consolidated title operating revenues for the

last three years were:

___________________________________________________________________________________________________

Amounts ($ millions) Percentages

2005 2004 2003 2005 2004 2003

California ...........................................................

367

353 414

16

17 19

Texas..................................................................

292

269 264

13

13 12

Florida................................................................

245

175 159

11

8 7

New York...........................................................

159

154 147

7

7 7

All others............................................................

1,251

1,131 1,154

53

55 55

2,314

2,082 2,138

100

100 100

Regulations. Title insurance companies are subject to comprehensive state regulations covering premium rates,

agency licensing, policy forms, trade practices, reserve requirements, investments and the transfer of funds between an insurer

and its parent or its subsidiaries and any similar related party transactions. Kickbacks and similar practices are prohibited by

various state and federal laws.

Real Estate Information

The real estate information segment primarily provides electronic delivery of data, products and services related to real estate.

REI services related to the mortgage origination process include flood certificates, credit reports, traditional and automated

property valuations, electronic mortgage documents, property information reports and tax services. Stewart Mortgage

Information Company (SMI), one of the segment companies, provides post-closing outsourcing services for residential

mortgage lenders, including document review, investor delivery, FHA/VA insuring, document retrieval, preparation and

recordation of assignments, lien releases and security interests, collateral reviews and loan pool certifications. Stewart Default

Solutions, Inc. provides mortgage default management solutions to lenders. In addition, other companies within the real estate

information segment provide diverse products and services related to automated mapping projects and geodetic positioning;

real estate database conversion, construction, maintenance and access; automation for government recording and registration;

criminal, credit and motor vehicle background checks and pre-employment screening services; and I.R.C. Section 1031 tax-

deferred property exchanges.

The introduction of automation tools for title agencies is an important part of the future growth of the REI companies.

Automated search and examination tools developed by Ultima Corporation and REIData, Inc. are designed to increase the

processing speed of title examinations by connecting all aspects of the title examination process to the public records.

Accessible through

www.PropertyInfo.com

TM

, a title examiner can utilize Advanced Search Analysis and SearchManager

TM

to

automate work flows for search, examination and production of title reports, thus eliminating the steps and inefficiencies

associated with traditional courthouse searches. Also available through real estate portals owned and developed by Stewart’s

REI companies are aerial photographs and maps offered by GlobeXplorer

®

and AIRPHOTOUSA

®

.

Factors affecting revenues. As in the title segment, REI revenues, particularly those generated by mortgage

information services and tax-deferred exchanges, are closely related to the level of activity in the real estate market. Revenues

related to many services are generated on a project basis. Contracts for automating government recording and registration and

mapping projects are often awarded following competitive bidding processes or after responding to formal requests for

proposals.

Companies that compete with Stewart’s REI companies vary across a wide range of industries. In the mortgage-

related products and services area, competitors include the major title insurance underwriters mentioned under “Title – Market

share”, as well as entities known as vendor management companies. In some cases the competitor may be the customer itself.

For example, certain services offered by SMI can be, or historically have been, performed by internal departments of large

mortgage lenders.

Another important factor affecting revenues is the advancement of technology, which permits customers to order and

receive timely status reports and final products and services through dedicated interfaces with the customer’s production

systems or over the Internet. The use of websites, including www.stewart.com and www.PropertyInfo.com, allows customers

easy access to solutions designed for their specific industry.

- 4 -

Customers. Customers for our REI products and services include mortgage lenders and servicers, mortgage brokers,

government entities, commercial and residential real estate agents, land developers, builders, title insurance agencies, and

others interested in obtaining property information (including data, images and aerial maps) that assist with the purchase, sale

and closing of real estate transactions and mortgage loans. Other customers include accountants, attorneys, investors and

others seeking services for their respective clients in need of qualified intermediary (Section 1031) services and employers

seeking pre-employment information about prospective employees.

Many of the services and products offered by the REI segment are used by professionals and intermediaries who have

been retained to assist consumers with the sale, purchase, mortgage, transfer, recording and servicing of real estate related

transactions. To that end, timely and accurate services are critical to our customers since these factors directly affect the service

they provide to their customers. Financial strength, marketplace presence and reputation as a technology innovator are

important factors in attracting new business.

General

Technology. Our automation products and services are increasing productivity in the title office and speeding the real estate

closing process for lenders, real estate professionals and consumers. Before automation, an order typically required several

individuals to manually search the title, retrieve and review documents and create the title policy commitment. Today, on a

normal subdivision file, and in some locations where our systems are optimally deployed, one person can receive the order

electronically, view the prior file, examine the indexed documents, prepare the commitment and deliver the finished title

insurance product. We are deploying SureClose

®

, an electronic document handler that gives consumers access to their closing

file during the closing process, for more transparency of the transaction.

Trademarks. We have developed numerous automation products and processes that are crucial to both our

title and REI segments. These systems automate most facets of the real estate transaction. Among these trademarked

products and processes are AIM

®

, AIRPHOTOUSA

®

, E-Title

®

, GlobeXplorer

®

, Landata Title Office

®

, REIMall

®

, SureClose

®

,

TitleLogix

®

and Virtual Underwriter

®

. We consider these trademarks, which are perpetual in duration, to be important to our

business.

Employees. As of December 31, 2005, we and our subsidiaries employed approximately 9,865 people. We consider

our relationship with our employees to be good.

Available information. We file annual, quarterly and other reports and information with the Securities and Exchange

Commission (SEC) under the Securities Exchange Act of 1934 (the Exchange Act). You may read and copy any material that

we file with the SEC at the SEC’s Public Reference Room at 450 5

th

Street, N.W., Room 1200, Washington, DC 20549. You

may obtain additional information about the Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the

SEC maintains an Internet site (

www.sec.gov) that contains reports, proxies, information statements and other information

regarding issuers that file electronically with the SEC, including us.

We also make available, free of charge on or through our Internet site (

www.stewart.com) our Annual Reports on

Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Code of Ethics and other information statements

and, if applicable, amendments to those reports filed or furnished pursuant to Section 13(a) of the Exchange Act, as soon as

reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

Item 1A. Risk Factors

You should consider the following risk factors, as well as the other information presented in this report and our other filings

with the SEC, in evaluating our business and any investment in our business. These risks could materially and adversely affect

our business, financial condition and results of operations. In that event, the trading price of our Common Stock could decline

materially.

- 5 -

If adverse changes in the levels of real estate activity occur, our revenues will decline.

Our results of operations and financial condition are affected by changes in economic conditions, particularly mortgage

interest rates. Our revenues and earnings have fluctuated in the past and we expect them to fluctuate in the future.

The demand for our title insurance and real estate information services depends in large part on the volume of

residential and commercial real estate transactions. The volume of these transactions historically has been influenced by factors

such as mortgage interest rates and the state of the overall economy. Typically, when interest rates are increasing or when the

economy is experiencing a downturn, real estate activity declines. As a result, the title insurance industry tends to experience

decreased revenues and earnings. Increases in interest rates also may have an adverse impact on our bond portfolio and interest

on our bank debt.

We have benefited from a low mortgage interest rate environment and an increase in home prices in recent years. A

reversal of these trends could adversely affect our revenues and earnings absent increases in market share, which cannot be

assured.

Competition in the title insurance industry affects our revenues.

Competition in the title insurance industry is strong, particularly with respect to price, service and expertise. Larger

commercial customers and mortgage originators also look to the size and financial strength of the title insurer. Although we are

one of the leading title insurance underwriters based on market share, Fidelity National Financial, Inc., The First American

Corporation and LandAmerica Financial Group, Inc. are each substantially larger than we are. Their holding companies have

significantly greater capital than we do. Although we are not aware of any current initiatives to reduce regulatory barriers to

entering our industry, any such reduction could result in new competitors, including financial institutions, entering the title

insurance business. Competition among the major title insurance companies and any new entrants could lower our premium

and fee revenues. From time to time, new entrants enter the marketplace with alternative products to traditional title insurance

although many of these alternative products have been disallowed by title insurance regulators. These alternative products, if

permitted by regulators, could adversely affect our revenues and earnings.

Rapid technological changes in our industry require timely and cost-effective responses. Our earnings may be adversely

affected if we are unable to effectively use technology to increase productivity.

Technological advances occur rapidly in the title insurance industry as industry standards evolve and title insurers

frequently introduce new products and services. We believe that our future success depends on our ability to anticipate

technological changes and to offer products and services that meet evolving standards on a timely and cost-effective basis.

Successful implementation and customer acceptance of our technology-based services, such as SureClose, will be crucial to our

future profitability, as will increasing our productivity to recover our costs of developing our technology-based services. There

is a risk that products and services introduced by our competitors, or advances in technology, could reduce the usefulness of

our products and render them obsolete.

Our claims experience may require us to increase our provision for title losses or to record additional reserves, either of

which would adversely affect our earnings.

Estimating future loss payments is difficult, and our assumptions about future losses may prove inaccurate. Claims are

often complex and involve uncertainties as to the dollar amount and timing of individual payments. Claims are often paid many

years after a policy is issued. From time to time, we experience large losses from title policies that have been issued, which

require us to increase our title loss reserves. These events are unpredictable and adversely affect our earnings.

Our growth strategy will depend in part on our ability to acquire and integrate complementary businesses.

As part of our overall growth strategy, we selectively acquire businesses and technologies that will allow us to enter

new markets, provide services that we currently do not offer or advance our existing technology. Our ability to continue this

acquisition strategy will depend on our success in identifying and consummating acquisitions of businesses on favorable

economic terms. The success of this strategy will also depend on our ability to integrate the operations, products and personnel

of any acquired business, retain key personnel, introduce new products and services on a timely basis and increase the strength

of our existing management team. Although we actively seek acquisition candidates, we may be unsuccessful in these efforts.

If we are unable to acquire appropriate businesses on favorable economic terms, or at all, or are unable to introduce new

products and services successfully, our business, results of operations and financial condition could be adversely affected.

- 6 -

We rely on dividends from our insurance underwriting subsidiaries. Significant restrictions on dividends from our

subsidiaries could adversely affect our ability to make acquisitions.

We are a holding company and our principal assets are the securities of our insurance underwriting subsidiaries.

Because of this structure, we depend primarily on receiving sufficient dividends from our insurance subsidiaries to meet our

debt service obligations, to pay our operating expenses and to pay dividends. The insurance statutes and regulations of some

states require us to maintain a minimum amount of statutory capital and restrict the amount of dividends that our insurance

subsidiaries may pay to us. Guaranty is a wholly owned subsidiary of Stewart and the principal source of our cash flow. In

this regard, the ability of Guaranty to pay dividends to us is dependent on the acknowledgement of the Texas Insurance

Commissioner. At December 31, 2005, under Texas insurance law, Guaranty could pay dividends or make distributions of up

to $97.6 million in 2006 without approval of the Texas Insurance Commissioner. However, Guaranty voluntarily restricts

dividends to us so that it can grow its statutory surplus and maintain liquidity at competitive levels. A title insurer’s ability to

pay claims can significantly affect the decision of lenders and other customers when buying a policy from a particular insurer.

These restrictions could limit our ability to fund our acquisition program with cash and to fulfill other cash needs.

Our insurance subsidiaries must comply with extensive government regulations. These regulations could adversely affect

our ability to increase our revenues and operating results.

State authorities regulate our insurance subsidiaries in the various states in which they do business. These regulations

generally are intended for the protection of policyholders rather than shareholders. The nature and extent of these regulations

vary from jurisdiction to jurisdiction, but typically involve:

• approval or setting of insurance premium rates;

• standards of solvency and minimum amounts of statutory capital and surplus that must be maintained;

• limitations on types and amounts of investments;

• establishing reserves, including statutory premium reserves, for losses and loss adjustment expenses;

• regulation of dividend payments and other transactions among affiliates;

• prior approval of the acquisition and control of an insurance company or of any company controlling an

insurance company;

• licensing of insurers and agencies;

• regulation of reinsurance;

• restrictions on the size of risks that may be insured by a single company;

• regulation of underwriting and marketing practices;

• deposits of securities for the benefit of policyholders;

• approval of policy forms;

• methods of accounting; and

• filing of annual and other reports with respect to financial condition and other matters.

These regulations may impede or impose burdensome conditions on rate increases or other actions that we might want

to take to enhance our operating results. Changes in these regulations may also adversely affect us. In addition, state regulatory

examiners perform periodic examinations of insurance companies, which could result in increased compliance or litigation

expenses.

Litigation risks include claims by large classes of claimants.

We are periodically involved in litigation arising in the ordinary course of business. In addition, we are currently, and

have been in the past, subject to claims and litigation from large classes of claimants seeking substantial damages not arising in

the ordinary course of business. Material pending legal proceedings, if any, not in the ordinary course of business, are

disclosed in Item 3 - Legal Proceedings included elsewhere in this report. To date, the impact of the outcome of these

proceedings has not been material to our results of operations or financial position. However, an unfavorable outcome in any

litigation, claim or investigation against us could have an adverse effect on our results of operations or financial position.

Anti-takeover provisions in our certificate of incorporation and by-laws may make a takeover of us difficult. This may

reduce the opportunity for our stockholders to obtain a takeover premium for their shares of our Common Stock.

Our certificate of incorporation and by-laws, as well as Delaware corporation law and the insurance laws of various

states, all contain provisions that could have the effect of discouraging a prospective acquirer from making a tender offer for

our shares, or that may otherwise delay, defer or prevent a change in control of Stewart.

- 7 -

The holders of our Class B Common Stock have the right to elect four of our nine directors. Pursuant to our by-laws,

the vote of six directors is required to constitute an act by the Board of Directors. Accordingly, the affirmative vote of at least

one of the directors elected by the holders of the Class B Common Stock is required for any action to be taken by the Board of

Directors. The foregoing provision of our by-laws may not be amended or repealed without the affirmative vote of at least a

majority of the outstanding shares of each class of our capital stock, voting as separate classes.

The voting rights of the holders of our Class B Common Stock may have the effect of rendering more difficult or

discouraging unsolicited tender offers, merger proposals, proxy contests or other takeover proposals to acquire control of

Stewart.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

We lease approximately 253,000 square feet, under a non-cancelable lease expiring in 2016, in an office building in Houston,

Texas, which is used for our corporate offices and for offices of several of our subsidiaries. In addition, we lease offices at

approximately 750 additional locations that are used for branch offices, regional headquarters and technology centers. These

additional locations include significant leased facilities in Los Angeles, Dallas, San Diego, Seattle and Las Vegas.

Our leases expire from 2006 to 2016 and have an average term of four years, although our typical lease term ranges

from three to five years. We believe we will not have any difficulty obtaining renewals of leases as they expire or,

alternatively, leasing comparable properties. The aggregate annual rent expense under all leases was approximately

$64,698,000 in 2005.

We also own six office buildings located in Texas, Arizona and Colorado. These owned properties are not material to

our financial position. We consider all buildings and equipment that we own or lease to be well maintained, adequately insured

and generally sufficient for our purposes.

Item 3. Legal Proceedings

As first reported in the Company’s Annual Report on Form 10-K for the year ended December 31, 2003, Stewart Title

Insurance Company (STIC), an underwriter subsidiary of the Company, was a defendant in a New York state class action

lawsuit in the Supreme Court State of New York. The lawsuit alleged that STIC directly and through its agencies routinely

collected excess premiums in connection with refinance transactions. Similar actions were brought against seven other

unrelated underwriters. STIC denied culpability on a number of grounds. In February 2005, STIC reached a settlement with

the plaintiffs, which was approved by the court and which fully and finally resolved all purposed claims of the plaintiffs. At

December 31, 2004, the Company had a reserve of $5.3 million for this claim, which was sufficient to cover the payment of the

final settlement in the third quarter of 2005 and other expenses associated with this lawsuit.

We are a party to routine lawsuits incidental to our business, most of which involve disputed policy claims. In many

of these suits, the plaintiffs seek exemplary or treble damages in excess of policy limits based on the alleged malfeasance of an

issuing agent. We do not expect that any of these proceedings will have a material adverse effect on our consolidated financial

condition. Additionally, we have received various inquiries from governmental regulators concerning practices in the

insurance industry. Many of these practices do not concern title insurance and we do not anticipate that the outcome of these

inquiries will materially affect the consolidated financial condition of the Company. We, along with the other major title

insurance companies, are party to a number of class actions concerning the title insurance industry. We believe that we have

adequate reserves for these contingencies and that the likely resolution of these matters will not materially affect the

consolidated financial condition of the Company.

Item 4. Submission of Matters to a Vote of Security Holders

None.

- 8 -

P A R T II

Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters

Our Common Stock is listed on the New York Stock Exchange (the NYSE) under the symbol “STC”.

The following table

sets forth the high and low sales prices of our Common Stock for each fiscal period indicated, as reported by the NYSE.

High Low

2005:

First quarter .......................................................... $ 42.98 $ 34.70

Second quarter ...................................................... 42.64 34.71

Third quarter ......................................................... 51.99 41.40

Fourth quarter........................................................ 53.01 45.38

2004:

First quarter .......................................................... $ 47.60 $ 34.23

Second quarter ...................................................... 40.04 31.14

Third quarter ......................................................... 39.97 31.14

Fourth quarter........................................................ 45.20 38.38

We paid regular quarterly cash dividends on our Common Stock from 1972 through 1999. During 1999, our Board of

Directors approved a plan to repurchase up to 5% (680,000 shares) of our outstanding Common Stock. The Board also

determined that our regular quarterly dividend should be discontinued in favor of returning those and additional funds to

stockholders through the stock repurchase plan. Under this plan, we repurchased 116,900 shares of Common Stock during

2000 and none in 2001 through 2005. An additional 208,769 shares of treasury stock were acquired primarily in the second

quarter of 2002 as a result of the consolidation of a majority-owned subsidiary that was previously held as an equity investee.

An additional 160 shares of treasury stock were acquired during the fourth quarter of 2005 in connection with a net exercise of

stock options. All of these shares are held by us as treasury shares.

The Board of Directors declared an annual cash dividend of $0.75, $0.46 and $0.46 per share payable December 20,

2005 and 2004 and December 19, 2003, respectively, to Common stockholders of record on December 6, 2005 and 2004 and

December 5, 2003, respectively. Our certificate of incorporation provides that no cash dividends may be paid on the Class B

Common Stock.

We had a book value per share of $42.21 and $38.48 at December 31, 2005 and 2004, respectively. At December 31,

2005, this measure was based on approximately $766.3 million in stockholders’ equity and 18.2 million shares outstanding. At

December 31, 2004, this measure was based on approximately $697.3 million in stockholders’ equity and 18.1 million shares

outstanding.

As of March 2, 2006, the number of stockholders of record was 4,801, and the price of one share of our Common

Stock was $45.94.

- 9 -

Item 6. Selected Financial Data

(Ten year summary)

The following table sets forth, for the periods and at the dates indicated, our selected consolidated financial data. The

financial data were derived from our consolidated financial statements and should be read in conjunction with our audited

consolidated financial statements, including the Notes thereto, beginning on page F-1 of this Report. See also Item 7 –

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

2005

2004 2003 2002 2001 2000 1999 1998 1997 1996

(In millions of dollars)

Total revenues....................

2,430.6

2,176.3 2,239.0 1,777.9 1,271.6 935.5 1,071.3 968.8 708.9 656.0

Title segment:

Operating revenues..........

2,314.0

2,081.8 2,138.2 1,683.1 1,187.5 865.6 993.7 899.7 657.3 609.4

Investment income...........

29.1

22.5 19.8 20.7 19.9 19.1 18.2 18.5 15.9 14.5

Investment gains..............

5.0

3.1 2.3 3.0 .4 0 .3 .2 .4 .1

Total revenues .................

2,348.1

2,107.4 2,160.3 1,706.8 1,207.8 884.7 1,012.2 918.4 673.6 624.0

Pretax earnings (1)...........

154.4

143.1 200.7 153.8 82.5 10.7 48.3 78.2 31.6 23.9

REI segment:

Revenues .........................

82.5

68.9 78.7 71.1 63.8 50.8 59.0 50.4 35.3 32.0

Pretax earnings (losses)

(1)

10.6

3.6 12.3 9.0 5.5 (4.5) 3.1 3.2 (5.3) .5

Title loss provisions............

128.1

100.8 94.8 75.9 51.5 39.0 44.2 39.2 29.8 33.8

% title operating revenues

5.5

4.8 4.4 4.5 4.3 4.5 4.4 4.4 4.5 5.6

Pretax earnings

(1)

................

165.0

146.7 213.0 162.8 88.0 6.2 51.4 81.4 26.3 24.4

Net earnings........................

88.8

82.5 123.8 94.5 48.7 .6 28.4 47.0 15.3 14.4

Cash flow from operations .

173.5

170.4 190.1 162.6 108.2 31.9 57.9 86.5 36.0 38.3

Total assets.........................

1,361.2

1,193.4 1,031.9 844.0 677.9 563.4 535.7 498.5 417.7 383.4

Long-term debt...................

70.4

39.9 17.3 7.4 7.0 15.4 6.0 8.9 11.4 7.9

Stockholders’ equity...........

766.3

697.3 621.4 493.6 394.5 295.1 284.9 260.4 209.5 191.0

Per share data

(2)

Average shares – diluted

(in millions)......................

18.2

18.2 18.0 17.8 16.3 15.0 14.6 14.2 13.8 13.5

Net earnings – basic............

4.89

4.56 6.93 5.33 3.01 .04 1.96 3.37 1.12 1.08

Net earnings – diluted.........

4.86

4.53 6.88 5.30 2.98 .04 1.95 3.32 1.11 1.07

Cash dividends ...................

.75

.46 .46 - - - .16 .14 .13 .12

Stockholders’ equity...........

42.21

38.48 34.47 27.84 22.16 19.61 19.39 18.43 15.17 14.17

Market price:

High.................................

53.01

47.60 41.45 22.50 22.25 22.31 31.38 33.88 14.63 11.31

Low .................................

34.70

31.14 20.76 15.05 15.80 12.25 10.25 14.25 9.38 9.81

Year end ..........................

48.67

41.65 40.55 21.39 19.75 22.19 13.31 29.00 14.50 10.38

(1)

Pretax earnings before minority interests.

(2)

Restated for a two-for-one stock split in May 1999, effected as a stock dividend.

- 10 -

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s overview. We reported net earnings of $88.8 million for the year ended December 31, 2005 compared with

net earnings of $82.5 million for the same period in 2004. On a diluted per share basis, net earnings were $4.86 for the year

2005 compared with net earnings of $4.53 for the year 2004. Revenues for the year increased 11.7% to $2,430.6 million from

$2,176.3 million last year.

In comparing 2005 with 2004, pretax earnings (which is calculated before minority interests) were increased by a

higher level of commercial transactions and a higher mix of revenues from direct operations compared with lower-margin

agency business. Acquisitions increased revenues by $37.3 million and pretax earnings by $8.0 million in 2005. Earnings for

2005 were impacted by higher employee costs and other operating expenses primarily because the Company continues to incur

the costs of investment in technology advancements. The Company’s goal is to increase productivity, gain market share and

provide superior service to its customers. Profits in 2005 were also impacted by an addition to title loss reserves of $10.5

million in the fourth quarter of 2005 relating to a mortgage fraud and a defalcation. The fourth quarter of 2005 also includes

charges relating to corrections of the Company’s accounting for leases and employee vacations of $2.8 million and $2.1

million, respectively. The combined after tax-effect of these two items was $3.2 million, which is immaterial for the year to

net earnings, cash flow and stockholders’ equity.

Critical accounting estimates. Actual results can differ from the accounting estimates we report. However, we believe there is

no material risk of a change in our estimates that is likely to have a material impact on our reported financial condition or

results of operations for the three years ended December 31, 2005.

Title loss reserves

Our most critical accounting estimate is providing for title loss reserves. Our liability for estimated title losses at December 31,

2005 comprises both known claims ($79.2 million) and claims expected to be reported in the future ($267.5 million). The

amount of the reserve represents the aggregate future payments, net of recoveries, that we expect to incur on policy and escrow

losses and in costs to settle claims.

We base our estimates on reported claims, historical loss experience, title industry averages and the current legal and

economic environment. In making estimates, we use moving-average ratios of recent actual policy loss payment experience

(net of recoveries) to premium revenues.

Provisions for title losses, as a percentage of title operating revenues, were 5.5%, 4.8% and 4.4% for the years ended

December 31, 2005, 2004 and 2003, respectively. Actual loss payment experience, including the impact of large losses, is the

primary reason for increases or decreases in our loss provision. A change of 0.5% in this percentage, a reasonably likely

scenario based on historical loss experience, would have changed the provision for title losses and pretax earnings by

approximately $11.6 million for the year ended December 31, 2005.

Estimating future loss payments is difficult and our assumptions are subject to the risk of change. Claims, by their

very nature, are complex and involve uncertainties as to the dollar amount and timing of individual payments. Our experience

has been that most claims against policies and claim payments are made in the first six years after the policy has been issued,

although claims are incurred and paid many years later.

We have consistently followed the same basic method of estimating loss payments for more than ten years.

Independent consulting actuaries have reviewed our title loss reserves and found them to be adequate at each year end for more

than ten years.

Goodwill and other long-lived assets

Based on our annual June 30

th

evaluation of goodwill and events that may indicate impairment of title plants and other long-

lived assets, we estimate and expense any loss in value to our current operations. The process of determining impairment relies

on projections of future cash flows, operating results and market conditions. Uncertainties exist in these projections and bear

the risk of change related to factors such as interest rates and overall real estate markets. Actual market conditions and

operating results may vary materially from our projections. There were no impairment write-offs of goodwill during the years

ended December 31, 2005 and 2004. During 2003, $2.0 million of goodwill attributed to a subsidiary held for sale was written

off and is included in other operating expenses in the consolidated financial statements. We use independent appraisers to

assist us in determining the fair value of our reporting units and assessing whether an impairment of goodwill exists.

- 11 -

Agency revenues

We recognize revenues on title insurance policies written by independent title agencies (agencies) when the policies are

reported to us. In addition, where reasonable estimates can be made, we also accrue for policies issued but not reported until

after period end. We believe that reasonable estimates can be made when recent and consistent policy issuance information is

available. Our estimates are based on historical reporting patterns and other information about our agencies. We also consider

current trends in our direct operations and in the title industry. In this accrual, we are not estimating future transactions. We

are estimating policies that have already been issued but not yet received by us. We have consistently followed the same basic

method of estimating unreported policy revenues for more than ten years.

Our accruals for unreported policies from agencies were not material to our total assets or stockholders’ equity for any

of the three years ended December 31, 2005. The differences between the amounts our agencies have subsequently reported to

us as compared to our estimated accruals are substantially offset by any difference arising from the prior year’s accrual and

have been immaterial to stockholders’ equity during each of the three prior years. We believe our process provides the most

reliable estimation of the unreported policies and appropriately reflects the trends in agency policy activity.

Operations. Our business has two main segments: title insurance-related services and real estate information (REI). These

segments are closely related due to the nature of their operations and common customers.

Our primary business is title insurance and settlement-related services. We close transactions and issue title policies

on homes, commercial properties and other real property located in all 50 states, the District of Columbia and a number of

international markets through more than 8,500 policy-issuing offices and agencies. We also provide post-closing lender

services, mortgage default management services, automated county clerk land records, property ownership mapping,

geographic information systems, property information reports, flood certificates, document preparation, background checks and

expertise in tax-deferred exchanges. Our current levels of international operations are immaterial with respect to our

consolidated financial results.

Factors affecting revenues. The principal factors that contribute to increases in our operating revenues for our title and REI

segments include:

• declining mortgage interest rates, which usually increase home sales and refinancing transactions;

• rising home prices;

• increasing consumer confidence;

• increasing demand by buyers;

• increasing number of households;

• higher premium rates;

• increasing market share;

• opening of new offices and acquisitions; and

• increasing number of commercial transactions that typically yield higher premiums.

To the extent inflation causes increases in the prices of homes and other real estate, premium revenues are also

increased. Premiums are determined in part by the insured values of the transactions we handle. These factors may override

the seasonal nature of the title business. Generally, our first quarter is the least active and the fourth quarter is the most active

in terms of title revenues.

- 12 -

Industry data. A table of published mortgage interest rates and other selected residential data for the years ended December

31, 2005, 2004 and 2003 follows (amounts shown for 2005 are preliminary and subject to revision). The amounts below may

not relate directly to or provide accurate data for forecasting our operating revenues or order counts.

2005

2004 2003

Mortgage rates (30-year, fixed-rate) – %

Average for the year.................................................................................

5.87

5.84 5.82

First quarter..............................................................................................

5.76

5.61 5.84

Second quarter..........................................................................................

5.72

6.13 5.51

Third quarter.............................................................................................

5.76

5.90 6.01

Fourth quarter...........................................................................................

6.22

5.73 5.92

Mortgage originations – in $ billions............................................................

2,821

2,727 3,760

Refinancings share – %................................................................................

47.7

52.2 69.1

New home sales – in thousands.....................................................................

1,282

1,203 1,086

Existing home sales – in thousands...............................................................

7,072

6,784 6,183

Existing home sales – median sales price in $ thousands .............................

207.6

184.0 168.5

Most industry experts project mortgage interest rates to rise modestly in 2006. Due to the large number of

refinancings completed in 2003, 2004 and 2005 and rising interest rates, significantly fewer refinancing transactions are being

forecast for 2006.

Trends and order counts. In the third quarter of 2003 mortgage interest rates increased significantly by 50 basis points to

6.01%. Since that time, mortgage interest rates have fluctuated from 5.45% to a high of 6.33% in the fourth quarter of 2005.

Mortgage originations fell to lower levels beginning in the fourth quarter of 2003 primarily because refinancing transactions

fell dramatically. Mortgage originations continued to fall substantially during 2004, although there was a slight increase in

2005. Sales of new and existing homes continued an upward trend throughout 2004 and 2005.

As a result of the above trends, the Company’s order levels began to decline in the third quarter of 2003. They

remained below prior year levels through August 2004. For the rest of 2004, orders exceeded the number of orders received in

2003. Order levels for 2005 remained relatively comparable to 2004, although orders for the fourth quarter of 2005 were lower

than the comparable period in 2004. Some of the increases in 2005 and 2004 were due to acquisitions.

Our order counts follow (in thousands):

2005

2004 2003

First quarter...................................................................................

212

223 263

Second quarter...............................................................................

245

222 315

Third quarter..................................................................................

238

204 238

Fourth quarter................................................................................

187

191 171

882

840 987

Results of Operations

A comparison of the results of operations of the Company for 2005 with 2004 and 2004 with 2003 follows. Factors

contributing to fluctuations in results of operations are presented in their order of monetary significance. We have quantified,

when necessary, significant changes.

Title revenues. Our revenues from direct title operations increased 18.3% in 2005 and decreased 0.9% in 2004. Acquisitions

added revenues of $37.3 million and $53.2 million in 2005 and 2004, respectively. The number of direct closings we handled

increased 5.5% in 2005 and decreased 20.8% in 2004. The largest revenue increases in 2005 were in Texas, Florida, California

and Arizona. The largest decreases in 2004 were in Texas, Colorado and Illinois, partially offset by increases in New York,

Canada, California and Puerto Rico.

The average revenue per closing increased 12.3% in 2005 and 25.2% in 2004 primarily due to a lower ratio of

refinancings closed by our direct operations compared to the prior year. Title insurance premiums on refinancings are typically

less than on property sales. The increase in 2005 in average revenue per closing was also due to an increased proportion of

commercial transactions and rising home prices.

- 13 -

Revenues from agencies increased 5.9% in 2005 and decreased 3.9% in 2004. The increase in 2005 was primarily

due to a decrease in the ratio of refinancing transactions compared to property sales, partially offset by our acquisitions of some

agencies that were formerly independent. The decrease in 2004 was primarily due to an overall decrease in the volume of

transactions completed and a decrease in refinancing transactions offset somewhat by an increase in property sales. We are

unable to quantify the relative contributions from refinancings and property sales because, in most jurisdictions, our

independent agencies are not required to report this information. Our statements on sales and refinancings are based on

published industry data from sources such as Fannie Mae, the Mortgage Bankers Association, the National Association of

Realtors

®

and Freddie Mac. We also use information from our direct operations.

The largest increases in revenues from agencies in 2005 were primarily in Florida, New Jersey, Georgia and

Maryland, offset partially by decreases in California and Texas. The largest decreases in 2004 in revenues from agencies were

primarily in California, Utah, New York and Michigan, offset partially by increases in Virginia, Florida and Pennsylvania.

The Texas Department of Insurance reduced title insurance premium rates by 6.5% effective July 1, 2004. As a

consequence, our revenues and net earnings were reduced by approximately $17.6 million and $5.2 million, respectively, in

2005 and $8.8 million and $2.6 million, respectively, in 2004.

Title revenues by state. The approximate amounts and percentages of consolidated title operating revenues for the last three

years were as follows:

____________________________________________________________________________________________________

Amounts ($ millions) Percentages

2005 2004 2003 2005 2004 2003

California .........................................................

367

353 414

16

17 19

Texas ...............................................................

292

269 264

13

13 12

Florida .............................................................

245

175 159

11

8 7

New York.........................................................

159

154 147

7

7 7

All others .........................................................

1,251

1,131 1,154

53

55 55

2,314

2,082 2,138

100

100 100

REI revenues. Real estate information revenues were $82.5 million in 2005, $68.9 million in 2004 and $78.7 million in 2003.

The increase in 2005 resulted primarily from a greater number of Section 1031 property exchanges and increases in automated

mapping services, partially offset by reduced revenues relating to post-closing services and electronic mortgage documents.

The decrease in 2004 resulted primarily from a lesser amount of post-closing services and electronic mortgage documents

resulting from a reduction in the volume of real estate transactions, offset somewhat by an increase in Section 1031 tax-

deferred property exchange services.

Investments. Investment income increased 29.4% in 2005 because of an increase in average balances invested and higher

yields. Investment income increased 13.7% in 2004 because of increases in average balances invested, partially offset by

lower yields. Certain investment gains in 2005, 2004 and 2003 were realized as part of the ongoing management of the

investment portfolio for the purpose of improving performance.

Retention by agencies. The amounts retained by agencies, as a percentage of revenues generated by them, were 81.2%,

81.6% and 82.0% in the years 2005, 2004 and 2003, respectively. Amounts retained by title agencies are based on agreements

between agencies and our title underwriters. The percentage that amounts retained by agencies bears to agency revenues may

vary from year to year because of the geographical mix of agency operations and the volume of title revenues.

Selected cost ratios (by segment). The following table shows employee costs and other operating expenses as a percentage

of related title and REI operating revenues.

_____________________________________________________________________________________________________

Employee costs (%) Other operating (%)

2005 2004 2003 2005 2004 2003

Title .....................................................................................

27.5

25.9 24.7

15.1

14.7

13.4

REI.......................................................................................

60.5

65.5 56.9

22.4

23.2 27.2

These two categories of expenses are discussed below in terms of year-to-year monetary changes.

Employee costs. Employee costs for the combined business segments increased 17.5% in 2005 and 3.1% in 2004. The

number of persons we employed at December 31, 2005, 2004 and 2003 was approximately 9,900, 9,000 and 8,200,

respectively. The increases in staff in 2005 and 2004 were primarily due to 552 and 605 employees, and $18.3 million and

- 14 -

$26.9 million in employee costs, from acquisitions, respectively. The number of employees and employee costs also increased

in 2005 due to the increase in the volume of real estate transactions closed by us.

In our REI segment, employee costs increased 10.7% in 2005. These employee costs did not increase proportionately

with the 19.7% increase in segment revenues due to an increase in revenues from Section 1031 property exchanges, which are

less labor intensive than other REI services. In 2004 employee costs were comparable to 2003.

Other operating expenses. Other operating expenses for the combined business segments increased 14.9% in 2005 and 5.7%

in 2004. The increase in other operating expenses in 2005 was partially due to acquisitions, which contributed approximately

$9.4 million of the increase. Other 2005 increases included rent of $10.0 million, certain REI expenses, business promotion

and technology costs. Increases in 2004 were in acquisitions, which contributed $12.4 million of the increase, litigation costs

of $4.7 million, rent and technology costs. The increases were partially offset by decreases in certain REI expenses in response

to volume decreases, supplies expense and attorney fees.

Other operating expenses also include title plant and travel expenses. Most of our operating expenses follow, to

varying degrees, the changes in transaction volume and revenues.

Our employee costs and certain other operating expenses are sensitive to inflation. To the extent inflation causes

increases in the prices of homes and other real estate, premium revenues also increase. Premiums are determined in part by the

insured values of the transactions we handle.

Title losses. Provisions for title losses, as a percentage of title operating revenues, were 5.5%, 4.8% and 4.4% in 2005, 2004

and 2003, respectively. An increase in the number of larger losses resulted in an increase in our loss ratio in 2005. The

increase included a $10.5 million addition to title loss reserves in the fourth quarter of 2005 related to a mortgage fraud and a

defalcation. An increase in loss payment experience for prior policy years also resulted in an increase in our loss ratios in 2005

and 2004.

Income taxes. The provisions for federal, state and foreign income taxes represented effective tax rates of 37.9%, 37.4% and

37.6% in 2005, 2004 and 2003, respectively.

Contractual obligations. Our material contractual obligations at December 31, 2005 were:

Payments due ($ millions)

Less than

1 year

1-3

years

3-5

years

More than

5 years

Total

Notes payable..................................... 18.0 26.8 41.7 1.9 88.4

Operating leases................................. 48.6 73.4 39.4 53.7 215.1

Estimated title losses.......................... 65.9 97.1 45.0 138.7 346.7

132.5 197.3 126.1 194.3 650.2

Material contractual obligations consist primarily of notes payable, operating leases and estimated title losses.

Operating leases are primarily for office space and expire over the next 11 years. The timing above for the payment of

estimated title losses is not set by contract. Rather, it is projected based on historical payment patterns. The actual timing of

estimated title loss payments may vary materially from the above projection because claims, by their nature, are complex and

paid over long periods of time. Loss reserves represent a total estimate only, whereas the other contractual obligations are

determinable as to timing and amounts. Title losses paid were $82.2 million, $68.4 million and $58.0 million in 2005, 2004

and 2003, respectively.

Liquidity and Capital Resources

Cash provided by operations was $173.5 million, $170.4 million and $190.1 million in 2005, 2004 and 2003, respectively.

Cash flow from operations has been the primary source of financing for additions to property and equipment, expanding

operations, dividends to stockholders and other requirements. This source is supplemented by bank borrowings.

The most significant non-operating source of cash was from proceeds of investments matured and sold in the amount

of $580.9 million, $405.7 million and $264.3 million in 2005, 2004 and 2003, respectively. We used cash for the purchases of

investments in the amounts of $679.0 million, $470.8 million and $416.3 million in 2005, 2004 and 2003, respectively.

- 15 -

Acquisitions during 2005, 2004 and 2003 resulted in additions to goodwill of $30.1 million, $45.6 million and $13.7

million, respectively.

Restrictions on liquidity. A substantial majority of our consolidated cash and investments at December 31, 2005 was held by

Stewart Title Guaranty Company (Guaranty) and its subsidiaries. The use and investment of these funds, dividends to the

Company and cash transfers between Guaranty and its subsidiaries and the Company are subject to certain legal restrictions

(Notes 2 and 3).

Our liquidity at December 31, 2005, excluding Guaranty and its subsidiaries, was comprised of cash and investments

aggregating $35.6 million and short-term liabilities of $3.3 million. We know of no commitments or uncertainties that are

likely to materially affect our ability to fund cash needs (Note 17).

Loss reserves. Our loss reserves are fully funded, segregated and invested in high-quality securities and short-term

investments. This is required by the insurance regulators of the states in which our underwriters are domiciled. At December

31, 2005, these investments aggregated $427.0 million and our estimated title loss reserves were $346.7 million.

Effective September 1, 2005 and retroactive to the start of the year, the Texas Legislature reduced statutory reserve

requirements for our major title insurer. The change does not directly impact reported earnings or loss reserves under U.S.

generally accepted accounting principles. However, the change released approximately $25.2 million, or approximately $18.3

million after tax, of low-yielding statutory reserve investments making that portion available for other uses.

Historically, our operating cash flow has been sufficient to pay all title policy losses incurred. As reported in Note 4,

the market value of our debt securities maturing in less than one year was $33.8 million at December 31, 2005. Combined with

our annual cash flow from operations ($173.5 million in 2005), we do not expect future loss payments to create a liquidity

problem for us. Beyond providing funds for losses, we manage the maturities of our investment portfolio to provide safety of

capital, improve earnings and mitigate interest rate risks.

Capital resources. We consider our capital resources to be adequate. We expect external capital resources will be available, if

needed, because of our low debt-to-equity ratio. Long-term debt was $70.4 million and stockholders’ equity was $766.3

million at December 31, 2005. We are not aware of any trends, either favorable or unfavorable, that will materially affect notes

payable or stockholders’ equity. We do not expect any material changes in the cost of such resources. Significant acquisitions

in the future could materially affect the notes payable or stockholders’ equity balances.

Off-balance sheet arrangements. We do not have any material source of liquidity or financing that involves off-balance sheet

arrangements.

Forward-looking statements. All statements included in this report, other than statements of historical facts, addressing

activities, events or developments that we expect or anticipate will or may occur in the future, are forward-looking statements.

Such forward-looking statements are subject to risks and uncertainties including, among other things, adverse changes in the

levels of real estate activity, technology changes, unanticipated title losses, adverse changes in governmental regulations,

actions of competitors, general economic conditions and other risks and uncertainties discussed under Item 1A – Risk Factors

included elsewhere in this report.

- 16 -

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

The discussion below about our risk management strategies includes forward-looking statements that are subject to risks and

uncertainties. Management’s projections of hypothetical net losses in the fair value of our market rate-sensitive financial

instruments, should certain potential changes in market rates occur, are presented below. While we believe that the potential

market rate changes are possible, actual rate changes could differ.

Our only material market risk in investments in financial instruments is our debt securities portfolio. We invest

primarily in marketable municipal, corporate, foreign, U.S. Government and mortgage-backed debt securities. We do not

invest in financial instruments of a hedging or derivative nature.

We have established policies and procedures to minimize our exposure to changes in the fair values of our

investments. These policies include retaining an investment advisory firm, an emphasis upon credit quality, management of

portfolio duration, maintaining or increasing investment income through high coupon rates and actively managing profile and

security mix depending upon market conditions. We have classified all of our investments as available-for-sale.

Investments in debt securities at December 31, 2005 mature, according to their contractual terms, as follows (actual

maturities may differ because of call or prepayment rights):

Amortized Market

costs values

($ thousands)

In one year or less ........................................................................................................... 33,881 33,782

After one year through two years ................................................................................... 51,474 51,107

After two years through three years ............................................................................... 58,147 57,950

After three years through four years............................................................................... 70,591 71,136

After four years through five years................................................................................. 44,283 43,889

After five years................................................................................................................ 247,929 250,727

Mortgage-backed securities............................................................................................ 310 281

506,615 508,872

We believe our investment portfolio is diversified and do not expect any material loss to result from the failure to

perform by issuers of the debt securities we hold. Our investments are not collateralized. The mortgage-backed securities are

issued by U.S. Government-sponsored entities.

Based on our debt securities portfolio and interest rates at December 31, 2005, a 100 basis-point increase (decrease) in

interest rates would result in a decrease (increase) of approximately $20.5 million, or 4.0%, in the fair value of our portfolio.

Changes in interest rates may affect the fair value of the debt securities portfolio and may result in unrealized gains or losses.

Gains or losses would only be realized upon the sale of the investments. Any other-than-temporary declines in market values

of securities are charged to earnings.

Item 8. Financial Statements and Supplementary Data

The information required to be provided in this item is included in our Consolidated Financial Statements, including the Notes

thereto, attached hereto as pages F-1 to F-19, and such information is incorporated in this report by reference.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Our principal executive officers and principal financial officer, after evaluating the effectiveness of our disclosure controls and

procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of December 31, 2005, have concluded that, as of

such date, our disclosure controls and procedures are adequate and effective to ensure that material information relating to us

and our consolidated subsidiaries would be made known to them by others within those entities.

- 17 -

There has been no change in our internal control over financial reporting during the quarter ended December 31, 2005

that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. As a

result, no corrective actions were required or undertaken.

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems

determined to be effective can provide only reasonable assurance with respect to financial statement preparation and

presentation. Internal control over financial reporting is a process that involves human diligence and compliance and is subject

to lapses in judgment and breakdowns resulting from human failures. Internal controls over financial reporting also can be

circumvented by collusion or improper management override. Because of such limitations, there is a risk that material

misstatements may not be prevented or detected on a timely basis by internal controls over financial reporting. However, these

inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process

safeguards to reduce, though not eliminate, this risk.

The Board of Directors has adopted the Stewart Code of Business Conduct and Ethics and Guidelines on Corporate

Governance, as well as the Code of Ethics for Chief Executive Officers, Principal Financial Officer and Principal Accounting

Officer. Each of these documents can be found at our website,

www.stewart.com.

See page F-2 for the Sarbanes-Oxley Section 404 Management Report and page F-3 for the Report of Independent

Registered Public Accounting Firm on our effectiveness of internal control over financial reporting.

Item 9B. Other Information

None.

- 18 -

P A R T III

Item 10. Directors and Executive Officers of the Registrant

Information regarding our directors and executive officers will be included in our proxy statement for our 2006 Annual

Meeting of Stockholders (the Proxy Statement), to be filed within 120 days after December 31, 2005, and is incorporated in

this report by reference.

Item 11. Executive Compensation

Information regarding executive compensation will be included in the Proxy Statement and is incorporated in this report by

reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management

Information regarding security ownership of certain beneficial owners and management will be included in the Proxy

Statement and is incorporated in this report by reference.

Item 13. Certain Relationships and Related Transactions

Information regarding certain relationships and related transactions will be included in the Proxy Statement and is incorporated

in this report by reference.

Item 14. Principal Accounting Fees and Services

Information regarding fees paid to and services provided by our independent registered public accounting firm will be included

in the Proxy Statement and is incorporated in this report by reference.

P A R T IV

Item 15. Exhibits and Financial Statement Schedules

(a) Financial Statements and Financial Statement Schedules

The financial statements and financial statement schedules filed as part of this report are listed in the Index to Consolidated

Financial Statements and Financial Statement Schedules on Page F-1 of this document. All other schedules are omitted, as

the required information is inapplicable or the information is presented in the consolidated financial statements or related

notes.

(b) Exhibits

Those exhibits required to be filed by Item 601 of Regulation S-K are listed in the Index to Exhibits immediately

preceding the exhibits filed herewith and such listing is incorporated herein by reference.

- 19 -

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, we have duly caused this report to

be signed on our behalf by the undersigned, thereunto duly authorized.

STEWART INFORMATION SERVICES CORPORATION

(Registrant)

By: /s/ Malcolm S. Morris

Malcolm S. Morris, Co-Chief Executive Officer

and Chairman of the Board of Directors

By: /s/ Stewart Morris, Jr.

Stewart Morris, Jr., Co-Chief Executive Officer,

President and Director

By: /s/ Max Crisp

Max Crisp, Executive Vice President and Chief Financial

Officer, Secretary-Treasurer, Director and

Principal Financial Officer

Dated: March 13, 2006

Pursuant to the requirements of the Securities Exchange Act of 1934 this report has been signed by the following persons on

our behalf and in the capacities and on the dates indicated:

/s/ Robert L. Clarke Director March 13, 2006 Director

(Robert L. Clarke) (Laurie C. Moore)

/s/ Max Crisp Director March 13, 2006 /s/ Malcolm S. Morris Director March 13, 2006

(Max Crisp) (Malcolm S. Morris)

/s/ Nita Hanks Director March 13, 2006 /s/ Stewart Morris, Jr. Director March 13, 2006

(Nita Hanks) (Stewart Morris, Jr.)

Director Director

(Paul Hobby) (W. Arthur Porter)

/s/ E. Douglas Hodo Director March 13, 2006

(E. Douglas Hodo)

F-1

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

AND FINANCIAL STATEMENT SCHEDULES

Stewart Information Services Corporation and

Subsidiaries’ Consolidated Financial Statements:

Sarbanes-Oxley Section 404 Management Report F-2

Reports of Independent Registered Public Accounting Firm F-3

Consolidated Statements of Earnings, Retained Earnings and

Comprehensive Earnings for the Years ended December 31,

2005, 2004 and 2003

F-5

Consolidated Balance Sheets as of December 31, 2005 and 2004 F-6

Consolidated Statements of Cash Flows for the Years ended

December 31, 2005, 2004 and 2003

F-7

Notes to Consolidated Financial Statements F-8

Financial Statement Schedules:

Schedule I - Financial Information of the Registrant (Parent Company) S-1

Schedule II - Valuation and Qualifying Accounts S-5

F-2

Sarbanes-Oxley Section 404 Management Report

To the Board of Directors and Stockholders of

Stewart Information Services Corporation

The management of the Company is responsible for establishing and maintaining adequate internal control over financial

reporting as defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate

because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of

December 31, 2005. In making this assessment, the Company’s management used the criteria set forth by the Committee of

Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control – Integrated Framework.

Based on our assessment, management believes that, as of December 31, 2005, the Company’s internal control over financial

reporting is effective based on those criteria.

The Company’s independent registered public accounting firm has issued an audit report on our assessment of the

Company’s internal control over financial reporting.

By: /s/ Malcolm S. Morris

Malcolm S. Morris, Co-Chief Executive Officer

and Chairman of the Board of Directors

By: /s/ Stewart Morris, Jr.

Stewart Morris, Jr., Co-Chief Executive Officer,

President and Director

By: /s/ Max Crisp

Max Crisp, Executive Vice President and Chief Financial

Officer, Secretary-Treasurer, Director and

Principal Financial Officer

F-3

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of

Stewart Information Services Corporation

We have audited management’s assessment, included in the accompanying Sarbanes-Oxley Section 404 Management Report,

that Stewart Information Services Corporation maintained effective internal control over financial reporting as of December

31, 2005, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring

Organizations of the Treadway Commission (COSO). Stewart Information Services Corporation’s management is

responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of

internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an

opinion on the effectiveness of the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United

States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective

internal control over financial reporting was maintained in all material respects. Our audit included obtaining an

understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the

design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in

the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the

reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally

accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures

that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and

dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to

permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and

expenditures of the company are being made only in accordance with authorizations of management and directors of the

company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or

disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,

projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate

because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, management’s assessment that Stewart Information Services Corporation maintained effective internal control

over financial reporting as of December 31, 2005, is fairly stated, in all material respects, based on criteria established in

Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway

Commission (COSO). Also, in our opinion, Stewart Information Services Corporation maintained, in all material respects,

effective internal control over financial reporting as of December 31, 2005, based on criteria established in Internal Control –

Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States),

the consolidated financial statements as listed in the accompanying index of Stewart Information Services Corporation and

our report dated March 7, 2006 expressed an unqualified opinion on those consolidated financial statements.

/s/ KPMG LLP

Houston, Texas

March 7, 2006

F-4

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of

Stewart Information Services Corporation

We have audited the consolidated financial statements of Stewart Information Services Corporation and subsidiaries as listed in

the accompanying index. In connection with our audits of the consolidated financial statements, we also have audited the

financial statement schedules as listed in the accompanying index. These consolidated financial statements and financial

statement schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on these

consolidated financial statements and financial statement schedules based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements

are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures

in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by

management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable

basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated

financial position of Stewart Information Services Corporation and subsidiaries as of December 31, 2005 and 2004, and the

consolidated results of their operations and their cash flows for each of the years in the three-year period ended December 31,

2005 in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement

schedules when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material

respects, the information set forth therein.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States),

the effectiveness of Stewart Information Services Corporation’s internal control over financial reporting as of December 31,

2005, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring

Organizations of the Treadway Commission (COSO), and our report dated March 7, 2006 expressed an unqualified opinion

on management’s assessment of, and the effective operation of, internal control over financial reporting.

/s/ KPMG LLP

Houston, Texas

March 7, 2006

F-5

CONSOLIDATED STATEMENTS OF EARNINGS, RETAINED EARNINGS AND

COMPREHENSIVE EARNINGS

Years ended December 31

2005

2004 2003

($000 Omitted)

Revenues

Title insurance:

Direct operations ...........................................................................

1,041,977

880,697 888,454

Agency operations ........................................................................

1,272,062

1,201,075 1,249,800

Real estate information services ......................................................

82,495

68,907 78,666

Investment income ...........................................................................

29,127

22,514 19,800

Investment gains – net ....................................................................

4,966

3,099 2,310

2,430,627

2,176,292 2,239,030

Expenses

Amounts retained by agencies..........................................................

1,032,496

980,457 1,024,282

Employee costs ................................................................................

694,599

591,092 573,486

Other operating expenses..................................................................

373,161

324,897 307,509

Title losses and related claims .........................................................

128,102

100,841 94,827

Depreciation and amortization..........................................................

33,954

31,025 25,240

Interest .............................................................................................

3,351

1,248 721

2,265,663

2,029,560 2,026,065

Earnings before taxes and minority interests......................................

164,964

146,732 212,965

Income taxes ......................................................................................

56,768

50,696 75,748

Minority interests ...............................................................................

19,431

13,518 13,462

Net earnings .....................................................................................

88,765

82,518 123,755

Retained earnings at beginning of year ..............................................

543,295

469,107 353,226

Excess distribution to minority interest ..............................................

-

(478) -

Cash dividends on Common Stock ($.75 per share in 2005 and

$.46 per share in 2004 and 2003)....................................................

(12,828)

(7,852)

(7,874)

Retained earnings at end of year ........................................................

619,232

543,295 469,107

Average number of shares outstanding – assuming dilution

(000 omitted) ..................................................................................

18,246

18,199

17,980

Earnings per share – basic .................................................................

4.89

4.56 6.93

Earnings per share – diluted ...........................................................

4.86

4.53 6.88

Comprehensive earnings:

Net earnings .......................................................................................

88,765

82,518 123,755

Changes in other comprehensive earnings, net of taxes

of ($4,394), ($663) and $3,056........................................................

(8,160)

(1,231) 5,675

Comprehensive earnings..................................................................

80,605

81,287 129,430

See notes to consolidated financial statements.

F-6

CONSOLIDATED BALANCE SHEETS

December 31

2005

2004

($000 Omitted)

Assets

Cash and cash equivalents.....................................................................................

134,734

121,383

Short-term investments..........................................................................................

206,717

181,195

341,451

302,578

Investments in debt and equity securities, at market:

Statutory reserve funds .....................................................................................

449,475

401,814

Other .................................................................................................................

85,802

68,793

535,277

470,607

Receivables:

Notes..................................................................................................................

6,850

6,683

Premiums from agencies....................................................................................

49,397

42,618

Income taxes .....................................................................................................

-

3,022

Other .................................................................................................................

40,941

35,384

Less allowance for uncollectible amounts ........................................................

(8,526)

(7,430)

88,662

80,277

Property and equipment, at cost:

Land ..................................................................................................................

7,584

6,990

Buildings ...........................................................................................................

15,303

15,162

Furniture and equipment....................................................................................

245,290

220,626

Less accumulated depreciation and amortization ..............................................

(182,415)

(159,387)

85,762

83,391

Title plants, at cost ................................................................................................

58,930

52,679

Real estate, at lower of cost or net realizable value...............................................

2,688

1,743

Investments in investees, on an equity basis .........................................................

16,387

19,814

Goodwill................................................................................................................

155,624

124,636

Intangible assets, net of amortization ....................................................................

15,268

16,988

Other assets............................................................................................................

61,102

40,640

1,361,151

1,193,353

Liabilities

Notes payable, including $70,396 and $39,866 long-term portion .......................

88,413

49,930

Accounts payable and accrued liabilities ..............................................................

125,255

101,544

Estimated title losses .............................................................................................

346,704

300,749

Deferred income taxes...........................................................................................

15,784

29,335

Minority interests...................................................................................................

18,682

14,482

594,838

496,040

Contingent liabilities and commitments

Stockholders’ equity

Common – $1 par, authorized 30,000,000, issued and outstanding

17,430,304 and 17,396,209..................................................................................

17,430

17,396

Class B Common – $1 par, authorized 1,500,000, issued and outstanding

1,050,012 ...........................................................................................................

1,050

Additional paid-in capital .....................................................................................

126,887

125,689

Retained earnings .................................................................................................

619,232

543,295

Accumulated other comprehensive earnings:

Unrealized investment gains..............................................................................

Foreign currency translation adjustments..........................................................

2,551

3,077

9,749

4,039

Treasury stock – 325,829 and 325,669 Common shares, at cost ..........................

(3,914)

(3,905)

Total stockholders’ equity ..............................................................................

766,313

697,313

1,361,151

1,193,353

See notes to consolidated financial statements.

F-7

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years ended December 31

2005

2004 2003

($000 Omitted)

Cash provided by operating activities (Note) ..................................

173,508

170,410 190,063

Investing activities:

Proceeds from investments matured and sold ..................................

580,925

405,689 264,318

Purchases of investments .................................................................

(679,026)

(470,777) (416,258)

Purchases of property and equipment, title plants

and real estate – net ......................................................................

(33,931)

(32,410) (37,236)

Increases in notes receivable ...........................................................

(2,654)

(2,644) (1,329)

Collections on notes receivable .......................................................

2,779

2,432 1,352

Proceeds from sale of equity investees.............................................

10,002

350 -

Cash paid for equity investees and related intangibles – net ............

(2,950)

(4,141) (7,000)

Cash paid for acquisitions of subsidiaries – net (see below) ............

(18,149)

(37,368) (3,499)

Cash used by investing activities .......................................................

(143,004)

(138,869) (199,652)

Financing activities:

Cash dividends paid..........................................................................

(12,828)

(7,852) (7,874)

Distributions to minority interests ...................................................

(16,549)

(12,474) (11,433)

Proceeds from exercise of stock options...........................................

364

1,284 3,878

Proceeds from notes payable ............................................................

37,161

5,834 3,295

Payments on notes payable ..............................................................

(23,821)

(13,020) (7,108)

Cash used by financing activities.......................................................

(15,673)

(26,228) (19,242)

Effect of changes in foreign currency exchange rates ..........................

(1,480)

1,868 3,877

Increase (decrease) in cash and cash equivalents ............................

13,351

7,181 (24,954)

Cash and cash equivalents at beginning of period................................

121,383

114,202 139,156

Cash and cash equivalents at end of period......................................

134,734

121,383 114,202

Note: Reconciliation of net earnings to the above amounts

Net earnings ................................................................................................

88,765

82,518 123,755

Add (deduct):

Depreciation and amortization .................................................................

33,954

31,025 25,240

Provisions for title losses in excess of payments ......................................

45,940

32,433 36,849

Increase in receivables – net.....................................................................

(7,858)

(1,354) (9,848)

Increase in other assets – net.....................................................................

(16,035)

(8,977) (7,339)

Increase (decrease) in payables and accrued liabilities – net ...................

22,077

15,954 (3,317)

Minority interest expense .........................................................................

19,431

13,518 13,462

Net earnings from equity investees...........................................................

(6,992)

(6,776) (6,586)

Dividends received from equity investees ................................................

4,868

6,002 6,579

Provision for deferred income taxes .........................................................

(9,158)

7,391 9,375

Other – net ...............................................................................................

(1,484)

(1,324) 1,893

Cash provided by operating activities ...........................................................

173,508

170,410 190,063

Supplemental information:

Assets acquired:

Goodwill ...................................................................................................

30,108

45,552 13,655

Title plants.................................................................................................

4,405

7,048 1,830

Property and equipment.............................................................................

1,319

7,479 1,115

Intangible assets.........................................................................................

3,434

11,291 253

Other .........................................................................................................

6,202

2,301 4,032

Liabilities assumed ......................................................................................

(2,543)

(7,697) (4,933)

Debt issued ..................................................................................................

(24,776)

(28,606) (12,453)

Cash paid for acquisitions of subsidiaries – net ...........................................

18,149

37,368 3,499

Income taxes paid ........................................................................................

51,652

47,436 81,267

Interest paid .................................................................................................

2,665

971 618

See notes to consolidated financial statements.

F-8

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Three years ended December 31, 2005)

NOTE 1

General. Stewart Information Services Corporation, through its subsidiaries (collectively, the Company), is primarily

engaged in the title insurance-related services business. The Company also provides real estate information services. The

Company operates through a network of policy-issuing offices and agencies in the United States and several international

markets. Approximately 29 percent of consolidated title revenues for the year ended December 31, 2005 were generated in

California and Texas. The operations in the international markets in which the Company does business are immaterial to

consolidated results.

A. Management’s responsibility. The accompanying financial statements were prepared by management, which is

responsible for their integrity and objectivity. The financial statements have been prepared in conformity with U.S. generally

accepted accounting principles (GAAP), including management’s best judgments and estimates. Actual results could differ

from estimates.

B. New significant accounting pronouncements. The Company will adopt SFAS No. 123(R), “Share-Based Payment”,

effective January 1, 2006, which will require the fair value of stock options to be recognized in the consolidated financial

statements as compensation expense. The pro forma impact of stock option expensing, calculated as required by SFAS No.

123, is disclosed in Note 1S. The effect on the Company’s consolidated financial position or results of operations is expected

to be immaterial.

C. Reclassifications. Certain prior year amounts in the consolidated financial statements have been reclassified for

comparative purposes. Net earnings and stockholders’ equity, as previously reported, were not affected.

D. Consolidation. The consolidated financial statements include all (1) subsidiaries in which the Company owns more than

50% voting rights in electing directors and (2) variable interest entities when required by FIN 46 and FIN 46(R).

Unconsolidated investees, in which the Company owns 20% through 50% and where the Company exercises significant

influence, are accounted for by the equity method. All significant intercompany accounts and transactions are eliminated and

provisions are made for minority interests.

E. Statutory accounting. Stewart Title Guaranty Company (Guaranty) and other title insurance underwriters owned by the

Company prepare financial statements in accordance with statutory accounting practices prescribed or permitted by

regulatory authorities.

In conforming the statutory financial statements to GAAP, the statutory premium reserve and the reserve for

reported title losses are eliminated and, in substitution, amounts are established for estimated title losses (Note 1G). The net

effect, after providing for deferred income taxes, is included in consolidated retained earnings.

F. Revenue recognition. Operating revenues from direct title operations are considered earned at the time of the closing of

the related real estate transaction. The Company recognizes premium revenues on title insurance policies written by

independent agencies when the policies are reported to the Company. In addition, where reasonable estimates can be made,

the Company also accrues for policies issued but not reported until after period end. The Company believes that reasonable

estimates can be made when recent and consistent policy issuance information is available. Estimates are based on historical

reporting patterns and other information obtained about the operations of agencies, as well as current industry trends,

including trends in direct operations.

Revenues from real estate information services are considered earned at the time the service is performed or the

work product is delivered to the customer.

G. Title losses and related claims. Estimating future title loss payments is difficult because of the complex nature of title

claims, the length of time over which claims are paid, the significantly varying dollar amounts of individual claims and other

factors.

The Company’s liability for estimated title losses comprises both known claims and claims expected to be reported

in the future. The amount of the reserve represents the aggregate future payments, net of recoveries, that are expected to be

incurred on policy and escrow losses and in costs to settle claims. Large losses are individually evaluated. Provisions are

charged to income in the same year the related premium revenues are recognized. The Company bases the estimates on

reported claims, historical loss experience, title industry averages and the current legal and economic environment.

F-9

The Company’s estimated liability for future loss payments is regularly reviewed for reasonableness and adjusted as

appropriate. Independent consulting actuaries also review the adequacy of the liability on an annual basis. In accordance with

industry practice, the amounts have not been discounted to their present values.

H. Cash equivalents. Cash equivalents are highly liquid investments with insignificant interest rate risks and maturities of

three months or less at the time of acquisition.

I. Short-term investments. Short-term investments comprise time deposits with banks, federal government obligations,

money market accounts and other investments maturing in less than one year.

J. Investments. The investment portfolio is classified as available-for-sale. Realized gains and losses on sales of investments

are determined using the specific identification method. Net unrealized gains and losses on securities, net of applicable

deferred taxes, are included as a component of other comprehensive earnings within stockholders’ equity. Any other-than-

temporary declines in market values of securities are charged to earnings.

K. Property and equipment. Depreciation is computed principally using the straight-line method at the following rates:

buildings – 30 to 40 years and furniture and equipment – 3 to 10 years. Maintenance and repairs are expensed as incurred

while improvements are capitalized. Gains and losses are recognized at disposal.

L. Title plants. Title plants include compilations of a county’s official land records, prior examination files, copies of prior

title policies, maps and related materials that are geographically indexed to a specific property. The costs of acquiring

existing title plants and creating new ones, prior to the time such plants are placed in operation, are capitalized. Such costs are

not amortized because there is no indication of any loss of value. The costs of maintaining and operating title plants are

expensed as incurred. Gains and losses on sales of copies of title plants or interests in title plants are recognized at the time of

sale.

M. Goodwill. Goodwill is the excess of the purchase price over the fair value of net assets acquired. Goodwill is not

amortized but is reviewed no less than annually and, if determined to be impaired, is expensed to current operations.

N. Acquired intangibles. Intangible assets are comprised mainly of non-compete and underwriting agreements and are

amortized on a straight-line basis over their estimated lives, which are primarily 3 to 10 years.

O. Other long-lived assets. The Company reviews the carrying values of title plants and other long-lived assets if certain

events occur that may indicate impairment. An impairment of these long-lived assets is indicated when projected

undiscounted cash flows over the estimated lives of the assets are less than carrying values. If impairment is determined by

management, the recorded amounts are written down to fair values by calculating the discounted values of projected cash

flows.

P. Fair values. The fair values of financial instruments, including cash and cash equivalents, short-term investments, notes

receivable, notes payable and accounts payable, are determined by references to various market data and other valuation

techniques, as appropriate. The fair values of these financial instruments approximate their carrying values. Investments in

debt and equity securities are carried at their fair values (Note 4).

Q. Derivatives and hedging. The Company does not invest in hedging or derivative instruments.

R. Income taxes. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences

between the tax bases and the book carrying values of certain assets and liabilities. Valuation allowances are provided as may

be appropriate. Enacted tax rates are used in calculating amounts.

S. Stock option plans. The Company combined its two stock option plans into a single plan in April 2005. The Company

applies the intrinsic value method of APB No. 25, “Accounting for Stock Issued to Employees”, and related Interpretations in

accounting for the plans. Accordingly, no stock-based employee compensation cost is reflected in net earnings, as all options

granted had an exercise price equal to the market value of the Common Stock on the date of grant (Note 13).

Under SFAS No. 123, compensation cost is recognized for the fair value of the employees’ purchase rights, which is

estimated using the Black-Scholes Model. The Company assumed a dividend yield of 0% to 1.4%, an expected life of ten

years, an expected volatility of 34.5% to 37.2% and a risk-free interest rate of 4.0% to 6.0% for the three years ended

December 31, 2005.

F-10

Had compensation cost for the Company’s plans been determined consistent with SFAS No. 123, the Company’s net

earnings and earnings per share would have been reduced to the pro forma amounts indicated as follows:

2005

2004 2003

($000 Omitted)

Net earnings:

As reported ....................................................................................................

88,765

82,518 123,755

Stock-based employee compensation determined

under the fair value method, net of taxes.....................................................

(1,186)

(1,164)

(718)

Pro forma .......................................................................................................

87,579

81,354 123,037

Earnings per share:

Net earnings – basic ........................................................................................

4.89

4.56 6.93

Pro forma – basic.............................................................................................

4.83

4.50 6.89

Net earnings – diluted .....................................................................................

4.86

4.53 6.88

Pro forma – diluted ........................................................................................

4.80

4.47 6.84

NOTE 2

Restrictions on cash and investments. Statutory reserve funds of $449,475,000 and $401,814,000 and short-term

investments of $47,804,000 and $56,870,000 at December 31, 2005 and 2004, respectively, are maintained to comply with

legal requirements for statutory premium reserves and state deposits. These funds are not available for any other purpose.

A substantial majority of consolidated investments and cash at each year end was held by the Company’s title

insurer subsidiaries. Generally, the types of investments a title insurer can make are subject to legal restrictions.

Furthermore, the transfer of funds by a title insurer to its parent or subsidiary operations, as well as other related party

transactions, are restricted by law and generally require the approval of state insurance authorities.

NOTE 3

Dividend restrictions. Substantially all of the consolidated retained earnings at each year end were represented by Guaranty,

which owns directly or indirectly substantially all of the subsidiaries included in the consolidation.

Guaranty cannot pay a dividend in excess of certain limits without the approval of the Texas Insurance

Commissioner. The maximum dividend that can be paid without such approval in 2006 is $97,639,000. Guaranty declared

dividends of $31,000,000, $21,615,000 and $33,790,000 in 2005, 2004 and 2003, respectively.

Dividends from Guaranty are also voluntarily restricted primarily to maintain statutory surplus and liquidity at

competitive levels. The ability of a title insurer to pay claims can significantly affect the decision of lenders and other

customers when buying a policy from a particular insurer.

Surplus as regards policyholders for Guaranty was $488,193,000 and $417,906,000 at December 31, 2005 and 2004,

respectively. Statutory net income for Guaranty was $56,449,000, $26,609,000 and $35,645,000 in 2005, 2004 and 2003,

respectively.

F-11

NOTE 4

Investments. The amortized costs and market values of debt and equity securities at December 31 follow:

2005

2004

Amortized Market

costs values costs values

($000 Omitted)

Debt securities:

Municipal ...................................................................................

211,066 211,895

191,758 196,883

Corporate and utilities ...............................................................

159,715 161,002

146,068 151,344

U.S. Government .......................................................................

41,339 40,601

29,041 28,905

Foreign bonds.............................................................................

94,185 95,093

68,488 69,978

Mortgage-backed .......................................................................

310 281

318 295

Equity securities ............................................................................

24,736 26,405

19,936 23,202

531,351 535,277

455,609 470,607

Gross unrealized gains and losses at December 31 were:

2005

2004

Gains Losses Gains Losses

($000 Omitted)

Debt securities:

Municipal ...................................................................................

2,253 1,424

5,518 393

Corporate and utilities ...............................................................

3,119 1,832

5,682 406

U.S. Government .......................................................................

91 829

178 314

Foreign bonds.............................................................................

1,615 707

1,699 209

Mortgage-backed .......................................................................

1 30

1 24

Equity securities .............................................................................

2,164 495

3,457 191

9,243 5,317

16,535 1,537

Of the above total of unrealized losses of $5,317,000 and $1,537,000, the amounts in loss positions in excess of 12

months were $2,897,000 and $691,000 at December 31, 2005 and 2004, respectively, which were comprised primarily of

corporate bonds, municipal debt and U.S. Government bonds. The unrealized loss positions were caused by normal market

fluctuations and represented 294 and 125 investments at December 31, 2005 and 2004, respectively. Because the Company

has the intent and ability to either hold these investments until maturity or until there is a market price recovery, and no

significant credit risk is deemed to exist, the investments are not considered other-than-temporarily impaired.

Debt securities at December 31, 2005 mature, according to their contractual terms, as follows (actual maturities may

differ because of call or prepayment rights):

_________________________________________________________________________________________________

Amortized Market

costs values

($000 Omitted)

In one year or less ......................................................................................... 33,881 33,782

After one year through five years ................................................................. 224,495 224,082

After five years through ten years ................................................................ 210,637 211,352

After ten years .............................................................................................. 37,292 39,375

Mortgage-backed securities .......................................................................... 310 281

506,615 508,872

The Company believes its investment portfolio is diversified and expects no material loss to result from the failure

to perform by issuers of the debt securities it holds. Investments made by the Company are not collateralized. The mortgage-

backed securities are insured by U.S. Government agencies.

F-12

NOTE 5

Investment income. Income from investments and gross realized investment gains and losses for the three years follow:

2005 2004 2003

($000 Omitted)

Income:

Debt securities .................................................................................

20,185

18,555 17,802

Short-term investments, cash equivalents and other ........................

8,942

3,959 1,998

29,127

22,514 19,800

Realized gains and losses:

Gains.................................................................................................

7,464

3,582 5,239

Losses ..............................................................................................

(2,498)

(483) (2,929)

4,966

3,099 2,310

The sales of debt securities resulted in proceeds of $49,383,000 in 2005, $55,259,000 in 2004 and $131,707,000 in

2003.

Expenses assignable to investment income were insignificant. There were no significant investments at December

31, 2005 that did not produce income during the year.

NOTE 6

Income taxes. Deferred income taxes at December 31, 2005 and 2004 were as follows:

2005

2004

($000 Omitted)

Deferred tax assets:

Accruals not currently deductible ...............................................................

8,048

3,843

Litigation reserves not currently deductible ...............................................

576

2,052

Net operating loss carryforwards ................................................................

590

224

Allowance for uncollectible amounts .........................................................

1,892

1,365

Investments in partnerships ........................................................................

1,720

1,332

Foreign tax credit carryforwards..................................................................

-

2,917

Other ...........................................................................................................

2,110

2,001

14,936

13,734

Less valuation allowance ............................................................................

(104)

(492)

14,832

13,242

Deferred tax liabilities:

Tax over book title loss provisions..............................................................

(22,469)

(28,894)

Unrealized gains on investments ................................................................

(1,374)

(5,250)

Tax over book depreciation and amortization .............................................

(978)

(4,350)

Other ...........................................................................................................

(5,795)

(4,083)

(30,616)

(42,577)

Net deferred income taxes ...............................................................................

(15,784)

(29,335)

The valuation allowance relates to net operating loss and foreign tax credit carryforwards. Deferred tax (benefit)

expense was ($9,158,000), $7,391,000 and $9,375,000 in 2005, 2004 and 2003, respectively. Management believes it is

more likely than not that future earnings will be sufficient to permit the Company to realize its remaining deferred tax assets.

F-13

The following reconciles federal income taxes computed at the statutory rate with income taxes as reported.

2005

2004 2003

($000 Omitted)

Expected income taxes at 35% ...............................................................

50,937

46,625 69,826

State taxes – net .....................................................................................

3,094

2,708 4,073

Foreign taxes – net of tax credits............................................................

1,305

1,204 864

Tax effect of permanent differences:

Tax-exempt interest .............................................................................

(2,311)

(2,205) (2,052)

Meals and entertainment.....................................................................

2,108

2,098 1,680

Net earnings from equity investees.....................................................

(2,447)

(2,372) (2,305)

Minority interests ...............................................................................

2,505

1,485 2,003

Other – net .........................................................................................

1,577

1,153 1,659

Income taxes ..........................................................................................

56,768

50,696 75,748

Income taxes in minority interests ..........................................................

1,611

879 754

Income taxes after income taxes in minority interests ...........................

55,157

49,817 74,994

Effective income tax rates (%) ...............................................................

37.9

37.4

37.6

Income taxes in minority interests represents the tax effect of minority interests in corporations that are excluded

from the consolidated tax return. The Company’s effective tax rate before adjusting for income taxes in minority interests

was 39.0%, 38.1% and 38.0% in 2005, 2004 and 2003, respectively.

NOTE 7

Goodwill and acquired intangibles. A summary of goodwill follows:

Title REI Total

($000 Omitted)

Balances at December 31, 2002.......................................... 56,916 9,969 66,885

Acquisitions..................................................................... 13,655 - 13,655

Impairment ...................................................................... (1,955) - (1,955)

Other................................................................................ 551 (52) 499

Balances at December 31, 2003.......................................... 69,167 9,917 79,084

Acquisitions..................................................................... 45,552 - 45,552

Balances at December 31, 2004.......................................... 114,719 9,917 124,636

Acquisitions..................................................................... 25,188 4,920 30,108

Other................................................................................ 880 - 880

Balances at December 31, 2005........................................ 140,787 14,837 155,624

During 2003, goodwill attributed to a subsidiary held for sale was written off and is included in other operating

expenses in the consolidated financial statements.

Amortization expense for acquired intangibles was $4,122,000 and $2,103,000 in 2005 and 2004, respectively.

Accumulated amortization of intangibles was $6,450,000 at December 31, 2005. In each of the years 2006 through 2010, the

estimated amortization expense will be less than $3,900,000.

F-14

NOTE 8

Equity investees. Certain summarized aggregate financial information for equity investees follows:

2005

2004 2003

($000 Omitted)

For the year:

Revenues ............................................................................................

90,724

86,979 77,480

Net earnings .......................................................................................

19,097

17,391 13,443

At December 31:

Total assets ........................................................................................

27,571

22,661

Notes payable .....................................................................................

160

406

Stockholders’ equity ..........................................................................

22,158

18,411

Net premium revenues earned from policies issued by equity investees were $14,976,000, $12,254,000 and

$10,424,000 in 2005, 2004 and 2003, respectively. Earnings from equity investees were $6,992,000, $6,776,000 and

$6,586,000 in 2005, 2004 and 2003, respectively. These amounts are included in title insurance – direct operations in the

consolidated financial statements.

Goodwill related to equity investees was $8,681,000 and $15,834,000 at December 31, 2005 and 2004, respectively,

and these balances are included in investments in investees in the consolidated financial statements. Equity investments will

continue to be reviewed for impairment (Note 1M).

NOTE 9

Notes payable.

2005

2004

($000 Omitted)

Banks – primarily unsecured and at LIBOR

(1)

plus 0.75%, varying payments...............

86,294

47,501

Other than banks .............................................................................................................

2,119

2,429

88,413

49,930

(ı)

4.39% and 2.42% at December 31, 2005 and 2004, respectively.

In December 2005, the Company executed an agreement for a $30,000,000 loan bearing interest at a fixed interest

rate of 5.97% per annum with a bank. Approximately $14,632,000 of the proceeds represents the conversion of existing debt

with the bank from variable interest rate loans to the fixed interest rate. Other than the conversion of the interest rates, the

terms of the existing debt remain unchanged. The remaining $15,368,000 of the loan has a five-year term and will be used to

retire currently outstanding variable interest rate loans or to fund acquisitions. The loan requires that the Company maintain

certain liquidity ratios (excluding estimated title losses) throughout the term of the loan. The Company was in compliance

with the liquidity ratios at December 31, 2005.

Principal payments on the notes are due in the amounts of $18,017,000 in 2006, $13,563,000 in 2007, $13,194,000

in 2008, $16,722,000 in 2009, $25,032,000 in 2010 and $1,885,000 subsequent to 2010.

F-15

NOTE 10

Estimated title losses. Provisions accrued, payments made and liability balances for the three years follow:

2005 2004 2003

($000 Omitted)

Balances at January 1 ............................................................................

300,749

268,089 230,058

Provisions ..........................................................................................

128,102

100,841 94,827

Payments ............................................................................................

(82,162)

(68,408) (57,978)

Reserve balances acquired .................................................................

15

227 1,182

Balances at December 31 .......................................................................

346,704

300,749 268,089

Provisions include amounts related to the current year of approximately $127,999,000, $100,611,000 and

$94,578,000 for 2005, 2004 and 2003, respectively. Payments related to the current year, including escrow and other loss

payments, were approximately $26,619,000, $18,220,000 and $16,484,000 in 2005, 2004 and 2003, respectively.

NOTE 11

Common Stock and Class B Common Stock. Holders of Common and Class B Common Stock have the same rights

except no cash dividends may be paid on Class B Common Stock. The two classes of stock vote separately when electing

directors and on any amendment to the Company’s certificate of incorporation that affects the two classes unequally.

A provision of the by-laws requires an affirmative vote of at least two-thirds of the directors to elect officers or to

approve any proposal that may come before the directors. This provision cannot be changed without a majority vote of each

class of stock.

Holders of Class B Common Stock may, with no cumulative voting rights, elect four directors if 1,050,000 or more

shares of Class B Common Stock are outstanding; three directors if between 600,000 and 1,050,000 shares are outstanding;

and none if less than 600,000 shares of Class B Common Stock are outstanding. Holders of Common Stock, with cumulative

voting rights, elect the balance of the nine directors.

Class B Common Stock may, at any time, be converted by its stockholders into Common Stock on a share-for-share

basis, although the holders of Class B Common Stock have agreed among themselves not to convert their stock. The

agreement may be extended or terminated by them at any time. Such conversion is mandatory on any transfer to a person not

a lineal descendant (or spouse, trustee, etc. of such descendant) of William H. Stewart.

At December 31, 2005 and 2004, there were 145,820 shares of Common Stock held by a subsidiary of the Company.

These shares are considered retired but may be issued from time to time in lieu of new shares.

F-16

NOTE 12

Changes in stockholders’ equity.

Common

and Class B Additional

Common paid-in

Stock capital

Accumulated

other

comprehensive Treasury

earnings stock

($000 Omitted)

Balances at December 31, 2002................... 18,057 116,870 9,344 (3,905)

Stock bonuses and other .......................... 43 1,053 - -

Exercise of stock options......................... 252 3,626 - -

Tax benefit of stock options exercised .... - 1,267 - -

Unrealized investment gains.................... - - 3,158 -

Realized gain reclassification .................. - - (111) -

Foreign currency translation.................... - - 2,628 -

Balances at December 31, 2003................... 18,352 122,816 15,019 (3,905)

Stock bonuses and other .......................... 31 1,170 - -

Exercise of stock options......................... 63 1,221 - -

Tax benefit of stock options exercised .... - 482 - -

Unrealized investment losses................... - - (1,476) -

Realized gain reclassification .................. - - (861) -

Foreign currency translation.................... - - 1,106 -

Balances at December 31, 2004................... 18,446 125,689 13,788 (3,905)

Stock bonuses and other .......................... 21 817 - -

Exercise of stock options......................... 13 360 - -

Tax benefit of stock options exercised .... - 21 - -

Unrealized investment losses................... - - (6,230) -

Realized gain reclassification .................. - - (968) -

Foreign currency translation.................... - - (962) -

Common Stock repurchased.................... - - - (9)

Balances at December 31, 2005.................

.

18,480 126,887 5,628 (3,914)

NOTE 13

Stock options. A summary of the status of the Company’s stock option plans for the three years follows:

_________________________________________________________________________________________________

Exercise

Shares prices ($)

(1)

December 31, 2002 ......................................................................................................... 504,700 16.31

Granted ....................................................................................................................... 89,700 23.16

Exercised .................................................................................................................... (251,422) 15.42

December 31, 2003.......................................................................................................... 342,978 18.75

Granted ....................................................................................................................... 92,100 42.97

Exercised .................................................................................................................... (62,600) 20.50

December 31, 2004.......................................................................................................... 372,478 24.44

Granted......................................................................................................................... 90,600 41.35

Exercised ...................................................................................................................... (13,444) 27.76

December 31, 2005 ........................................................................................................

449,634 27.75

(1)

Weighted averages

F-17

Stock options are exercisable at date of grant. The weighted average fair values of options granted during the years

2005, 2004 and 2003 were $20.14, $19.44 and $12.31, respectively.

The following summarizes fixed stock options outstanding and exercisable at December 31, 2005:

_________________________________________________________________________________________________

Range of exercise prices ($)

9.75 to 21.87 to

20.22 47.10 Total

Shares ....................................................................................................... 214,934 234,700 449,634

Remaining contractual life – years

(1)

....................................................... 4.1 8.3 6.3

Exercise prices ($)

(1)

................................................................................. 17.33 37.29 27.75

(1)

Weighted averages

NOTE 14

Earnings per share. The Company’s basic earnings per share was calculated by dividing net earnings by the weighted

average number of shares of Common Stock and Class B Common Stock outstanding during the reporting period.

To calculate diluted earnings per share, the number of shares determined above was increased by assuming the

issuance of all dilutive shares during the same reporting period. The treasury stock method was used to calculate the

additional number of shares. The only potentially dilutive effect on earnings per share for the Company was related to its

stock option plans.

In calculating the effect of the options and determining diluted earnings per share, the average number of shares

used in calculating basic earnings per share was increased by 112,000 in 2005, 102,000 in 2004 and 118,000 in 2003. Stock

options to purchase 66,500 shares were excluded from the computation of diluted earnings per share in 2005 and 2004 as

these options were anti-dilutive. There were no anti-dilutive options in 2003.

NOTE 15

Reinsurance. As is the industry practice, on certain transactions the Company cedes risks to other title insurance

underwriters and reinsurers. However, the Company remains liable if the reinsurer should fail to meet its obligations. The

Company also assumes risks from other underwriters. Payments and recoveries on reinsured losses were insignificant during

the three years ended December 31, 2005. The total amount of premiums for assumed and ceded risks was less than one

percent of title revenues in each of the last three years.

NOTE 16

Leases. The Company recognizes minimum rental payments under noncancelable operating leases, which expire over the

next 11 years, on the straight-line basis over the terms of the leases, including provisions for any free rent periods or

escalating lease payments. Rent expense was $64,698,000 in 2005, $52,697,000 in 2004 and $46,511,000 in 2003. The

future minimum lease payments are summarized as follows (stated in thousands of dollars):

2006........................................................................................................................................................................ 48,639

2007........................................................................................................................................................................ 40,498

2008........................................................................................................................................................................ 32,878

2009........................................................................................................................................................................ 23,356

2010........................................................................................................................................................................ 16,006

2011 and after......................................................................................................................................................... 53,699

215,076

F-18

NOTE 17

Contingent liabilities and commitments. The Company is contingently liable for disbursements of escrow funds held by

agencies in those cases where specific insured closing guarantees have been issued.

The Company routinely holds funds in segregated escrow accounts pending the closing of real estate transactions.

This resulted in a contingent liability to the Company of approximately $1,454,379,000 at December 31, 2005. The

Company realizes economic benefits from certain commercial banks holding escrow deposits. The escrow funds are not

invested under, and do not collateralize, the arrangements with the banks. Under these arrangements, there were no

outstanding balances or liabilities at December 31, 2005 and 2004.

The Company is a qualified intermediary in tax-deferred property exchanges for customers pursuant to Section 1031

of the Internal Revenue Code. The Company holds the proceeds from these transactions until a qualifying exchange can

occur. This resulted in a contingent liability to the Company of approximately $1,062,130,000 at December 31, 2005.

As is industry practice, these escrow and Section 1031 accounts are not included in the consolidated balance sheets.

At December 31, 2005 the Company was contingently liable for guarantees of indebtedness owed primarily to banks

and others by certain third parties. The guarantees relate primarily to business expansion and expire no later than 2019. As

of December 31, 2005, the maximum potential future payments on the guarantees amounted to $8,132,000. Management

believes that the related underlying assets and available collateral, primarily corporate stock and title plants, would enable the

Company to recover the amounts paid under the guarantees. The Company believes no provision for losses is needed

because no loss is expected on these guarantees. The Company’s accrued liability related to the non-contingent value of

third-party guarantees was $362,000 at December 31, 2005.

In the ordinary course of business the Company guarantees the third-party indebtedness of its consolidated

subsidiaries. At December 31, 2005 the maximum potential future payments on the guarantees are not more than the notes

payable recorded in the consolidated balance sheets. The Company also guarantees the indebtedness related to lease

obligations of certain of its consolidated subsidiaries. The maximum future obligations arising from these lease-related

guarantees are not more than the future minimum lease payments included in Note 16. In addition, the Company has

unused letters of credit amounting to $3,298,000 related primarily to workers’ compensation policies.

In the normal conduct of its business, the Company is subject to lawsuits, regulatory investigations and other legal

proceedings that may involve substantial amounts. Such matters are not predictable with complete assurance. The Company

believes the probable resolution of such contingencies will not materially affect the consolidated financial condition of the

Company. Additionally, the Company has received various inquiries from governmental regulators concerning practices in

the insurance industry. Many of these practices do not concern title insurance, and the Company does not anticipate that the

outcome of these inquiries will materially affect the consolidated financial condition of the Company. The Company, along

with the other major title insurance companies, is party to a number of class actions concerning the title insurance industry.

The Company believes that it has adequate reserves for these contingencies and that the likely resolution of these matters will

not materially affect the consolidated financial condition of the Company.

NOTE 18

Variable interest entities. The Company, in the ordinary course of business, enters into joint ventures and partnerships

related to its title operations. These entities are immaterial to the Company’s consolidated financial position or results of

operations individually and in the aggregate. At December 31, 2005, the Company had no material exposure to loss

associated with variable interest entities to which it is a party.

NOTE 19

Segment information. The Company’s two reportable segments are title and real estate information (REI). Both segments

serve each other and the real estate and mortgage industries.

The title segment provides services needed in transferring the title in a real estate transaction. These services include

searching, examining and closing the title to real property and insuring the condition of the title.

F-19

The REI segment primarily provides services related to real estate transactions using electronic delivery. These

services include title reports, flood certificates, credit reports, property appraisals, document preparation, property

information reports and background checks. This segment also provides post-closing services to lenders. In addition, the REI

segment provides services related to Section 1031 tax-deferred property exchanges, mapping, and construction and

maintenance of title plants for county clerks, tax assessors and title agencies.

Under the Company’s internal reporting system, most general corporate expenses are incurred by and charged to the

title segment. Technology operating costs are also charged to the title segment, except for direct expenditures related to the

REI segment. All investment income is included in the title segment as it is generated primarily from the investments of the

title underwriters’ operations.

Title REI Total

($000 Omitted)

2005:

Revenues........................................................................

.

2,348,132 82,495 2,430,627

Intersegment revenues..................................................

.

1,030 3,426 4,456

Depreciation and amortization....................................

.

30,129 3,825 33,954

Earnings before taxes and minority interests.............

.

154,391 10,573 164,964

Identifiable assets..........................................................

.

1,302,949 58,202 1,361,151

2004:

Revenues........................................................................ 2,107,385 68,907 2,176,292

Intersegment revenues................................................... 1,449 3,460 4,909

Depreciation and amortization....................................... 27,061 3,964 31,025

Earnings before taxes and minority interests................. 143,154 3,578 146,732

Identifiable assets .......................................................... 1,151,563 41,790 1,193,353

2003:

Revenues......................................................................... 2,160,364 78,666 2,239,030

Intersegment revenues.................................................... 1,843 3,752 5,595

Depreciation and amortization........................................ 21,535 3,705 25,240

Earnings before taxes and minority interests.................. 200,689 12,276 212,965

NOTE 20

Quarterly financial information (unaudited).

Mar 31 June 30 Sept 30 Dec 31 Total

($000 Omitted, except per share)

Revenues:

2005.............................................................. 510,962 651,079 639,442 629,144 2,430,627

2004 ............................................................. 465,438 569,636 528,942 612,276 2,176,292

Net earnings:

2005.............................................................. 10,666 37,227 31,771 9,101

(1)

88,765

2004 ............................................................. 11,140 29,961 21,138 20,279

(2)

82,518

Earnings per share – diluted:

2005.............................................................. 0.59 2.04 1.74 0.50

(1)

4.86

2004 ............................................................. 0.61 1.65 1.16 1.11

(2)

4.53

Note: The quarterly per share data may not sum to annual totals due to rounding.

(1)

Includes an addition to large title loss reserves of $10.5 million, which reduced net earnings by $6.8 million. Also includes charges relating to corrections

of the Company’s accounting for leases and employee vacations of $2.8 million and $2.1 million, respectively. The combined after-tax effect of these two

items was $3.2 million, which is immaterial for the year to net earnings, cash flow and stockholders’ equity.

(2)

Includes charge relating to litigation of $4.4 million, which reduced net earnings by $2.9 million.

S-1

SCHEDULE I

STEWART INFORMATION SERVICES CORPORATION

(Parent Company)

EARNINGS AND RETAINED EARNINGS INFORMATION

Years ended December 31

2005 2004 2003

($000 Omitted)

Revenues

Investment income, including $18, $136 and $271 from affiliates $ 1,254 $ 477 $ 516

Other income .....................................................................................

3 11 36

1,257 488 552

Expenses

Employee costs ................................................................................. 1,396 3,120 846

Other operating expenses, including $93, $101 and $73 to

affiliates .........................................................................................

4,666

3,618

4,044

Depreciation and amortization ..........................................................

812 796 243

6,874 7,534 5,133

Loss before taxes and earnings from subsidiaries................................. (5,617) (7,046) (4,581)

Income tax benefit ............................................................................... 2,018 1,938 1,012

Earnings from subsidiaries ..................................................................

92,364 87,626 127,324

Net earnings .......................................................................................

88,765 82,518 123,755

Retained earnings at beginning of year ................................................ 543,295 469,107 353,226

Excess distribution to minority interest ............................................... - (478) -

Cash dividends on Common Stock ($.75, $.46 and $.46 per share

in 2005, 2004 and 2003) ..................................................................

(12,828)

(7,852)

(7,874)

Retained earnings at end of year .......................................................... $ 619,232

$ 543,295 $ 469,107

See accompanying note to financial statement information.

(Schedule continued on following page.)

S-2

SCHEDULE I

(continued)

STEWART INFORMATION SERVICES CORPORATION

(Parent Company)

BALANCE SHEET INFORMATION

December 31

2005 2004

($000 Omitted)

Assets

Cash and cash equivalents............................................................................................... $ 288 $ 1,186

Short-term investments ................................................................................................... 100

100

388 1,286

Investments in debt securities, at market......................................................................... 35,214 29,352

Receivables:

Notes, including $10,190 and $10,315 from affiliates.................................................. 11,222 10,649

Other, including $21,594 and $11,898 from affiliates ................................................. 22,409 12,091

Less allowance for uncollectible amounts ................................................................... (67)

(69)

33,564 22,671

Property and equipment, at cost:

Land ............................................................................................................................. 2,857 2,857

Buildings ...................................................................................................................... 455 455

Furniture and equipment............................................................................................... 3,071 3,078

Less accumulated depreciation ................................................................................... (975)

(699)

5,408 5,691

Title plants, at cost ......................................................................................................... 48 48

Investments in subsidiaries, on an equity basis .............................................................. 684,082 629,332

Goodwill ......................................................................................................................... 8,470 8,470

Other assets ..................................................................................................................... 14,350

12,653

$ 781,524

$ 709,503

Liabilities

Notes payable ................................................................................................................... $ 42 $ 121

Accounts payable and accrued liabilities ......................................................................... 15,169

12,069

15,211 12,190

Contingent liabilities and commitments

Stockholders’ equity

Common – $1 par, authorized 30,000,000, issued and outstanding 17,430,304

and 17,396,209 ............................................................................................................

17,430

17,396

Class B Common – $1 par, authorized 1,500,000, issued and outstanding 1,050,012 .... 1,050 1,050

Additional paid-in capital................................................................................................ 126,887 125,689

Retained earnings

(1)

...................................................................................................... 619,232 543,295

Accumulated other comprehensive earnings:

Unrealized investment gains ....................................................................................... 2,551 9,749

Foreign currency translation adjustments ................................................................... 3,077 4,039

Treasury stock – 325,829 and 325,669 Common shares, at cost...................................... (3,914)

(3,905)

Total stockholders’ equity ....................................................................................... 766,313 697,313

$781,524

$709,503

(1)

Includes undistributed earnings of subsidiaries of $639,632 in 2005 and $560,096 in 2004.

See accompanying note to financial statement information.

(Schedule continued on following page.)

S-3

SCHEDULE I

(continued)

STEWART INFORMATION SERVICES CORPORATION

(Parent Company)

CASH FLOW INFORMATION

Years ended December 31

2005 2004 2003

($000 Omitted)

Cash (used) provided by operating activities (Note) ................

$ (2,085) $ 7,017 $ (3,205)

Investing activities:

Proceeds from investments matured and sold ............................ 63,729 31,861 15,951

Purchases of investments ........................................................... (69,591) (39,194) (28,205)

Purchases of property and equipment – net................................ (19) (46) (1,882)

Increases in notes receivables .................................................... (835) (447) (100)

Collections on notes receivables ................................................ 261 6,462 7,032

Dividends received from subsidiary .......................................... 20,850 10,765 22,290

Cash paid for acquisitions of subsidiaries – net ......................... (665

) (11,733) (5,604)

Cash provided (used) by investing activities ............................

13,730

(2,332) 9,482

Financing activities:

Dividends paid ........................................................................... (12,828) (7,852) (7,874)

Proceeds from exercise of stock options .................................... 364 1,284 3,878

Payments on notes payable ........................................................ (79

) (76) (69)

Cash used by financing activities ...............................................

(12,543

) (6,644) (4,065)

(Decrease) increase in cash and cash equivalents .....................

(898) (1,959) 2,212

Cash and cash equivalents at beginning of period ........................ 1,186 3,145 933

Cash and cash equivalents at end of period ..............................

$ 288

$ 1,186 $ 3,145

Note: Reconciliation of net earnings to the above amounts

Net earnings................................................................................ $ 88,765 $ 82,518 $ 123,755

Add (deduct):

Depreciation and amortization ................................................ 812 796 243

(Decrease) increase in receivables – net ................................. (2,376) 1,331 (12,459)

Increase in payables and accrued liabilities – net ................... 3,100 5,553 5,345

Net earnings from subsidiaries ................................................ (92,364) (87,626) (127,324)

Deferred tax benefit................................................................. (45) (328) (183)

Other – net .............................................................................. 23

4,773 7,418

Cash (used) provided by operating activities ............................. $ (2,085

) $ 7,017 $ (3,205)

Supplemental information:

Income taxes paid .................................................................... – – –

Interest paid ............................................................................. 12 12 17

See accompanying note to financial statement information.

(Schedule continued on following page.)

S-4

SCHEDULE I

(continued)

STEWART INFORMATION SERVICES CORPORATION

(Parent Company)

NOTE TO FINANCIAL STATEMENT INFORMATION

We operate as a holding company, transacting substantially all of our business through our subsidiaries. Our consolidated

financial statements are included in Part II, Item 8 of Form 10-K. The Parent Company financial statements should be read

in conjunction with the aforementioned consolidated financial statements and notes thereto and financial statement schedules.

Certain amounts in the 2004 and 2003 Parent Company financial statements have been reclassified for comparative

purposes. Net earnings and stockholders’ equity, as previously reported, were not affected.

Dividends from Guaranty for 2005, 2004 and 2003 were $31,000,000, $21,615,000 and $33,790,000, respectively.

S-5

SCHEDULE II

STEWART INFORMATION SERVICES CORPORATION AND SUBSIDIARIES

VALUATION AND QUALIFYING ACCOUNTS

December 31, 2005

Col. A Col. B Col. C

Additions

Col. D

Deductions

Col. E

Balance Charged Charged to Balance

at to other at

beginning costs and accounts end

Description of period expenses (describe) (describe) of period

Stewart Information Services

Corporation and subsidiaries:

Year ended December 31, 2003:

Estimated title losses .......................... $230,057,674 $ 94,826,566 $ 1,182,000 (C) $ 57,977,311 (A) $268,088,929

Allowance for uncollectible

amounts ............................................ 5,307,562 2,522,000 – 1,569,738 (B) 6,259,824

Year ended December 31, 2004:

Estimated title losses .......................... 268,088,929 100,840,539 227,000 (C) 68,406,954 (A) 300,749,514

Allowance for uncollectible

amounts ............................................ 6,259,824 2,600,000 – 1,429,624 (B) 7,430,200

Year ended December 31, 2005:

Estimated title losses .......................... 300,749,514 128,102,493 15,000 (C) 82,163,018 (A) 346,703,989

Allowance for uncollectible

amounts ........................................... 7,430,200 2,673,000 – 1,577,629 (B) 8,525,571

Stewart Information Services

Corporation – Parent Company:

Year ended December 31, 2003:

Allowance for uncollectible

amounts ..........................................

$19,706

$53,415

–

$1,975

(B)

$71,146

Year ended December 31, 2004:

Allowance for uncollectible

amounts ..........................................

71,146

–

2,279

(B)

68,867

Year ended December 31, 2005:

Allowance for uncollectible

amounts ..........................................

68,867

–

1,436

(B)

67,431

(A) Represents primarily payments of policy and escrow losses and loss adjustment expenses.

(B) Represents uncollectible accounts written off.

(C) Represents estimated title loss balance acquired.

INDEX TO EXHIBITS

Exhibit

3.1 - Certificate of Incorporation of the Registrant, as amended March 19, 2001

(incorporated by reference in this report from Exhibit 3.1 of the Annual Report on

Form 10-K for the year ended December 31, 2000)

3.2 - By-Laws of the Registrant, as amended March 13, 2000 (incorporated by reference in

this report from Exhibit 3.2 of the Annual Report on Form 10-K for the year ended

December 31, 2000)

4.1 - Rights of Common and Class B Common Stockholders (incorporated by reference to

Exhibits 3.1 and 3.2 hereto)

10.1 *† - Summary of agreements as to payment of bonuses to certain executive officers

10.2 † - Deferred Compensation Agreements dated March 10, 1986, amended July 24, 1990

and October 30, 1992, between the Registrant and certain executive officers

(incorporated by reference in this report from Exhibit 10.2 of the Annual Report on

Form 10-K for the year ended December 31, 1997)

10.3 † - Stewart Information Services Corporation 1999 Stock Option Plan (incorporated by

reference in this report from Exhibit 10.3 of the Annual Report on Form 10-K for the

year ended December 31, 1999)

10.4 † - Stewart Information Services Corporation 2002 Stock Option Plan for Region

Managers (incorporated by reference in this report from Exhibit 10.4 of the Quarterly

Report on Form 10-Q for the quarter ended March 31, 2002)

10.5 † - Stewart Information Services Corporation 2005 Long-Term Incentive Plan

(incorporated by reference in this report from Exhibit 10.2 of the Quarterly Report on

Form 10-Q for the quarter ended June 30, 2005)

14.1 - Code of Ethics for Chief Executive Officers, Principal Financial Officer and Principal

Accounting Officer (incorporated by reference in this report from Exhibit 14.1 of the

Annual Report on Form 10-K for the year ended December 31, 2004)

21.1 * - Subsidiaries of the Registrant

23.1 * - Consent of Independent Registered Public Accounting Firm, including consent to

incorporation by reference of their reports into previously filed Securities Act

registration statements

31.1 * - Certification of Co-Chief Executive Officer pursuant to Section 302 of the Sarbanes-

Oxley Act of 2002

31.2 * - Certification of Co-Chief Executive Officer pursuant to Section 302 of the Sarbanes-

Oxley Act of 2002

31.3 * - Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley

Act of 2002

32.1 * - Certification of Co-Chief Executive Officer pursuant to Section 906 of the Sarbanes-

Oxley Act of 2002

32.2 * - Certification of Co-Chief Executive Officer pursuant to Section 906 of the Sarbanes-

Oxley Act of 2002

32.3 * - Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley

Act of 2002

_________

* Filed herewith

† Management contract or compensatory plan

Exhibit 10.1

STEWART INFORMATION SERVICES CORPORATION AND SUBSIDIARIES

Executive Officers’ Bonus Plans

The following summarizes the terms of the bonus arrangements approved by our Compensation Committee with respect to

our executive officers:

MALCOLM S. MORRIS, as Chairman of the Board and Co-Chief Executive Officer, shall receive in addition to his salary,

1% on the first $20,000,000 of the consolidated income before taxes of Stewart Title Guaranty Company as reported to its

stockholder, .75% of the pretax profits from $20,000,001 to $40,000,000, .50% of the pretax profits from $40,000,001 to

$60,000,000 and .25% of the pretax profits exceeding $60,000,000. For the calendar year 2005, Mr. Malcolm S. Morris shall

receive no less than $250,000 in bonus compensation.

STEWART MORRIS, JR., as President and Co-Chief Executive Officer, shall receive in addition to his salary, 1% on the

first $20,000,000 of the consolidated income before taxes of Stewart Title Guaranty Company as reported to its stockholder,

.75% of the pretax profits from $20,000,001 to $40,000,000, .50% of the pretax profits from $40,000,001 to $60,000,000 and

.25% of the pretax profits exceeding $60,000,000. For the calendar year 2005, Mr. Stewart Morris, Jr. shall receive no less

than $250,000 in bonus compensation.

MAX CRISP, as Executive Vice President and Chief Financial Officer, shall receive in addition to his salary, .50% of the

first $50,000,000 of the consolidated income before taxes of Stewart Title Guaranty Company as reported to its stockholder,

.40% of the pretax profits from $50,000,001 to $75,000,000, .30% of the pretax profits from $75,000,001 to $100,000,000

and .20% of the pretax profits exceeding $100,000,000. For the calendar year 2005, Mr. Max Crisp shall receive no less than

$145,000 in bonus compensation, and his compensation from base salary plus bonus may not exceed 75% of the total base

salary plus bonus earned by a Chief Executive Officer.

MATTHEW W. MORRIS, as Senior Vice President-Planning and Development, shall receive in addition to his salary,

.10% of the consolidated income before taxes of Stewart Title Guaranty Company as reported to its stockholder. For the

calendar year 2005, Mr. Matthew W. Morris shall receive no less than $75,000 in bonus compensation. In addition, Mr.

Matthew W. Morris may be eligible to receive up to $25,000 of discretionary bonuses based on the completion of certain

projects and the approval of Mr. Stewart Morris, Jr.

Exhibit 21.1

STEWART INFORMATION SERVICES CORPORATION AND SUBSIDIARIES

State of

Name of Subsidiary

Incorporation

Stewart Title of Mobile, Inc ................................................. Alabama

McKinley Title & Trust, Inc................................................. Alaska

Stewart Title of Alaska, Inc.................................................. Alaska

Arkansas Title Insurance Company...................................... Arkansas

Landata Inc. of Arkansas...................................................... Arkansas

McDonald Abstract and Title, Inc........................................ Arkansas

Rainey Land Title Services LLC ......................................... Arkansas

Roy Pugh Abstract Company, Inc........................................ Arkansas

Stewart – Bromstad, Inc....................................................... Arkansas

Stewart Title of Arkansas, Inc.............................................. Arkansas

T. O. Tucker Abstract Company .......................................... Arkansas

Ultima Corporation .............................................................. Arkansas

AIRPHOTOUSA, LLC ........................................................ Arizona

Citizens Title Agency of Arizona LLC ............................... Arizona

Citizens Title & Trust........................................................... Arizona

Southern Arizona Title & Insurance Agency ....................... Arizona

Stewart National Title, LLC ................................................ Arizona

Stewart Title & Trust of Phoenix, Inc .................................. Arizona

Stewart Title & Trust of Tucson........................................... Arizona

Affiliated Escrow, Inc .......................................................... California

API Properties Corporation.................................................. California

Asset Preservation, Inc......................................................... California

Bay Area Title ...................................................................... California

California Land Title of Marin............................................. California

California Regional Order Center ....................................... California

Celebrity Escrow Corporation.............................................. California

Consolidated Title Services.................................................. California

Cuesta Title Company.......................................................... California

GlobeXplorer, LLC.............................................................. California

GPMD, Inc........................................................................... California

Granite Bay Holding Corporation ....................................... California

Granite Properties, Inc.......................................................... California

Integrated Escrow, Inc.......................................................... California

Inter City .............................................................................. California

Landata Geo Services .......................................................... California

Landata, Inc. of California ................................................... California

Landata, Inc. of the West Coast Northern Division.............. California

North Bay Title Company ................................................... California

Quantum Leap Realty Technologies, Inc. dba Realty

Assist.................................................................................

California

Santa Cruz Title Company................................................... California

Stewart Insurance and Financial Services, LLC................... California

Stewart Office Solutions, Inc ............................................... California

Stewart Online Mortgage Documents .................................. California

(continued)

Exhibit 21.1

(continued)

STEWART INFORMATION SERVICES CORPORATION AND SUBSIDIARIES

State of

Name of Subsidiary

Incorporation

Stewart Title of California, Inc............................................. California

Stewart Valuations ............................................................... California

Terra Vista Escrow, LLC ..................................................... California

WTI Properties, Inc.............................................................. California

5280 Title Services, LLC ..................................................... Colorado

Advanced Title, LLC............................................................ Colorado

American Title LLC ............................................................ Colorado

Blue Stone Title, LLC.......................................................... Colorado

Cornell Title, LLC................................................................ Colorado

DTC Title, LLC.................................................................... Colorado

First Nationwide Title, LLC................................................. Colorado

FMC Title, LLC ................................................................... Colorado

Platte Valley Title................................................................. Colorado

Stewart Title of Aspen, Inc................................................... Colorado

Stewart Title Company of Colorado Springs ....................... Colorado

Stewart Title of Colorado, Inc.............................................. Colorado

Stewart Title of Denver, Inc................................................. Colorado

Stewart Title of Eagle County, Inc....................................... Colorado

Stewart Title of Glenwood Springs, Inc............................... Colorado

Stewart Title of Grand County ............................................ Colorado

Stewart Title of Larimer County, Inc................................... Colorado

Stewart Title of Leadville..................................................... Colorado

Stewart Loan Services, LLC ................................................ Colorado

Stewart Title of Pueblo......................................................... Colorado

Stewart Title of Steamboat Springs ..................................... Colorado

Stewart Title of Summit County .......................................... Colorado

Stewart Title of Steamboat Springs ..................................... Colorado

Stewart Water Information LLC .......................................... Colorado

Tamarac Title, LLC.............................................................. Colorado

Stewart Title of Delaware, LLC........................................... Delaware

Aaction Title Agency, Inc.................................................... Florida

AccountableTitle Services, LLC ......................................... Florida

Advance Homestead Title, Inc............................................. Florida

Advanced Title Holding Company, LLC............................. Florida

Allied Title Insurance, Inc.................................................... Florida

Bay Title Services, Inc ......................................................... Florida

B & L Title Services, LLC .................................................. Florida

Burnt Store Title Services ................................................... Florida

Century Title of Ormond Beach, LLC.................................. Florida

Complete Title of Cape Coral, LLC..................................... Florida

CPS Title, LLC .................................................................... Florida

Diversified Title LLC........................................................... Florida

Executive Title ..................................................................... Florida

Florida Affordable Title Services LLC ............................... Florida

(continued)

Exhibit 21.1

(continued)

STEWART INFORMATION SERVICES CORPORATION AND SUBSIDIARIES

State of

Name of Subsidiary

Incorporation

Florida Paradise Title........................................................... Florida

Global Title Security LLC ................................................... Florida

Key America Title Corporation............................................ Florida

La Compania Hispaña de Stewart Title, Inc......................... Florida

Lee Island Title, LLC........................................................... Florida

Manatee-Pinellas Title Company......................................... Florida

Midwest Title Guarantee Company of Florida, LLC ........... Florida

MLS Title, LLC.................................................................... Florida

MTH Title of Florida, LLC.................................................. Florida

New Century Title of Orlando.............................................. Florida

New Century Title of Sarasota, LLC.................................... Florida

New Century Title Services, LLC........................................ Florida

Pace Title Company, LLC.................................................... Florida

Pasadena Title Company, LLC............................................. Florida

Pine Island Title Insurance Agency, Inc............................... Florida

Premier Title Affiliates, LLLP............................................. Florida

Secure Close Title Company LLC ....................................... Florida

Southern Premier Title Company ........................................ Florida

South Lake Title Services, Inc ............................................. Florida

ST FLA Acquisition Co ....................................................... Florida

Stewart Approved Title, Inc................................................. Florida

Stewart Insurance Services, Inc............................................ Florida

Stewart Management Services ............................................. Florida

Stewart Premier Title Company, LLC ................................. Florida

Stewart Properties of Tampa, Inc......................................... Florida

Stewart River City Title, Inc ................................................ Florida

Stewart Title Company of Sarasota, Inc............................... Florida

Stewart Title of Clearwater, Inc ........................................... Florida

Stewart Title of Jacksonville, Inc......................................... Florida

Stewart Title of Martin County ............................................ Florida

Stewart Title of Northwest Florida....................................... Florida

Stewart Title of Orange County, Inc .................................... Florida

Stewart Title of Pinellas, Inc................................................ Florida

Stewart Title of Polk County, Inc......................................... Florida

Stewart Title of Tallahassee, Inc.......................................... Florida

Stewart Title of Tampa......................................................... Florida

Stewart Title of the Four Corners, Inc.................................. Florida

Stewart Title Today, LLC .................................................... Florida

SureClose of Florida, Inc...................................................... Florida

The Closing Pros, LLC......................................................... Florida

United Southern Title........................................................... Florida

Stewart Title of Boise, Inc.................................................... Idaho

Stewart Title of Canyon County........................................... Idaho

Stewart Title of Coeur d’Alene, Inc..................................... Idaho

Effingham Title Company ................................................... Illinois

Landata, Inc. of Illinois ........................................................ Illinois

(continued)

Exhibit 21.1

(continued)

STEWART INFORMATION SERVICES CORPORATION AND SUBSIDIARIES

State of

Name of Subsidiary

Incorporation

Leadership Zone................................................................... Illinois

Stewart Title Company of Illinois, Inc................................. Illinois

Land Title Group, LLC ....................................................... Indiana

Stewart Title of Elkhart County Inc ..................................... Indiana

Stewart Title Services of Central Indiana LLC. .................. Indiana

Stewart Title Services of Hancock County, LLC................. Indiana

Stewart Title Services of Indiana, Inc .................................. Indiana

Stewart Title Services of Northwest Indiana, LLC .............. Indiana

Michigan

Stewart Title Company of Mississippi ................................ Mississippi

Missouri

Title Search Services, LLC .................................................. Indiana

McPherson County Abstract & Title Company, Inc ............ Kansas

Stewart Title of Louisiana, Inc............................................. Louisiana

Preferred Title, LLC............................................................. Maine

Affordable Title Services, LLC............................................ Maryland

Cambridge Landata, Incorporated........................................ Maryland

Smart Choice Settlements of Maryland, Inc......................... Maryland

Stewart Global Title Services LLC ..................................... Maryland

Stewart Title Group, LLC .................................................... Maryland

Stewart Title of Maryland ................................................... Maryland

Choice Title, LLC ................................................................ Michigan

Stewart Title of Detroit, Inc .................................................

Title Giant ............................................................................

Advantage Title LLC............................................................ Minnesota

Stewart Title of Minnesota, Inc............................................ Minnesota

STM Holding, Inc. .............................................................. Minnesota

Bay Title of Mississippi, LLC ............................................. Mississippi

CBKC Title and Escrow, LLC............................................. Missouri

CBKC Title Holdings, LLC ................................................. Missouri

Clinton County Title and Abstract ....................................... Missouri

Gold Title Agency, LLC ...................................................... Missouri

Heart of America Title and Escrow, LLC ........................... Missouri

Lenders Title, LP.................................................................. Missouri

Lenders Title Management, LLC ......................................... Missouri

Lenders Title of Kansas City, LP ........................................

Lenders Title of Kansas City Management LLC ................. Missouri

Metropolitan Title and Escrow LLC .................................... Missouri

Metropolitan Title Holding Company, LLC ........................ Missouri

Northland Holdings, Inc....................................................... Missouri

Platte County Title and Abstract Company.......................... Missouri

Platte Valley Title Co...........................................................

(c

ontinued)

Exhibit 21.1

(continued)

STEWART INFORMATION SERVICES CORPORATION AND SUBSIDIARIES

State of

Name of Subsidiary

Incorporation

Stewart Title, Inc.................................................................. Missouri

Stewart Title of the Northland Holdings, LLC .................... Missouri

SureClose of Kansas City..................................................... Missouri

Stewart Title of Billings.......................................................

Montana

Stewart Title of Bozeman, LLC ........................................... Montana

Stewart Title of Great Falls, LLC.........................................

Stewart Title of Northern Nevada .......................................

Accredited Title, Inc.............................................................

New Jersey

Stewart-Princeton Abstract ..................................................

Stewart Title of Central Jersey, Inc......................................

Your Town Title Agency .....................................................

New Mexico

Santa Fe Abstract Limited ...................................................

Stewart Title Insurance Company ....................................... New York

New York

North Carolina

Stewart Title of Darby.......................................................... Montana

Montana

Stewart Title of Madison County dba Big Sky .................... Montana

Stewart Title of Montana, Inc............................................... Montana

Stewart Title of Carson City................................................. Nevada

Stewart Title of Douglas County.......................................... Nevada

Stewart Title of Fallon.......................................................... Nevada

Stewart Title of Nevada ....................................................... Nevada

Stewart Title of Northeastern Nevada, Inc. ......................... Nevada

Nevada

New Hampshire

Classic Title, LLC ................................................................ New Hampshire

Diversified Closing Services, Inc......................................... New Hampshire

East Coast Title, LLC........................................................... New Hampshire

First Principle Title Service, LLC........................................ New Hampshire

Granite Settlement Service, LLC ........................................ New Hampshire

Greater Portland Title LLC ................................................. New Hampshire

Integrity Title, LLC.............................................................. New Hampshire

Opus Title, LLC ................................................................... New Hampshire

Preferred Title, LLC............................................................. New Hampshire

Professional Title Agency, LLC........................................... New Hampshire

Stewart Title of Northern New England, Inc........................ New Hampshire

Fieldstone Title Agency ...................................................... New Jersey

Jersey Stewart Title ..............................................................

Parsippany-Stewart Title Agency, LLC ............................... New Jersey

New Jersey

TRBC Title Agency LLC .................................................... New Jersey

New Jersey

Central Title, LLC ...............................................................

New Mexico

Stewart Title Limited ........................................................... New Mexico

Stewart Title of Valencia ..................................................... New Mexico

Land Data Associates, Inc. .................................................. New York

Title Associates, Inc. ...........................................................

Stewart Title of North Carolina, Inc..................................... North Carolina

Stewart Title of Piedmont.....................................................

Stewart Title of the Carolinas, LLC ..................................... North Carolina

Union Commerce Title Company LLC................................ North Carolina

(continued)

Exhibit 21.1

Name of Subsidiary

(continued)

STEWART INFORMATION SERVICES CORPORATION AND SUBSIDIARIES

State of

Incorporation

Red River Title Services, Inc............................................ North Dakota

Ace Title Agency, LLC .................................................... Ohio

Agents and Builders Title Agency LLC ..........................

Ohio

Developers’ Title and Closing Services LLC .................. Ohio

Ohio

Public Title ....................................................................... Ohio

RCS Title Agency, LLC ...................................................

Real Estate Title Service, LLC ........................................ Ohio

Ohio

Stewart-JSDI Title Agency .............................................. Ohio

Ohio

Stewart Title Agency of East Central Ohio, Inc ............... Ohio

Stewart Title Agency of Licking County, LLC ................ Ohio

Stewart Title Agency of New Albany, LLC ....................

Ohio

Stewart Business Information........................................... Oklahoma

(continued)

Advanced Land Title of Lexington, LLC ........................ Ohio

Ohio

Agency Title, Ltd..............................................................

Hearthstone Title Agency LLC ........................................ Ohio

KH Title LLC .................................................................. Ohio

Logan Title Agency, LLC................................................. Ohio

Merit Title Agency ...........................................................

National Land Title Insurance Company.......................... Ohio

Presidential Title Agency.................................................. Ohio

Ohio

SSC Title Agency, LLC.................................................... Ohio

Stewart Advanced Land Title, Ltd ................................... Ohio

Stewart Fine Homes Title Agency LLC ........................... Ohio

Stewart Home Builder Title Insurance Agency LLC ....... Ohio

Stewart Home First Title Agency LLC.............................

Stewart Insurance Group, Ltd........................................... Ohio

Stewart New Home Title ..................................................

Stewart Residential Title Agency, LLC............................ Ohio

Stewart Service Center, LLC............................................ Ohio

Stewart Stoneridge Title Agency, LLC ............................ Ohio

Stewart Title Affiliates Agency, LLC .............................. Ohio

Stewart Title Agency of Columbus, Limited.................... Ohio

Ohio

Stewart Title Agency of Ohio, Inc.................................... Ohio

Stewart Tradition Title Agency, LLC............................... Ohio

STMI Title Agency, LLC .................................................

Title Resource, LLC ......................................................... Ohio

Vanguard Title Agency of Ohio, LLC.............................. Ohio

Stewart Abstract & Title of Carter County, Inc................ Oklahoma

Executive Escrow, LLC ................................................... Oklahoma

Stewart Abstract & Title Co. of Oklahoma....................... Oklahoma

Abstract and Title Company ............................................ Oregon

Stewart Title Insurance Company of Oregon ................... Oregon

Stewart Title of Oregon, Inc. ........................................... Oregon

STEWART INFORMATION SERVICES CORPORATION AND SUBSIDIARIES

Exhibit 21.1

(continued)

State of

Name of Subsidiary

Incorporation

Americlose, LLC .............................................................. Pennsylvania

Stewart Title - Rhode Island, Inc...................................... Rhode Island

Tennessee

Acceptance Title............................................................... Tennessee

Castleman Title & Escrow, Inc.........................................

Cumberland Title & Escrow, Inc...................................... Tennessee

Hickory Hollow LLC .......................................................

Tennessee

Legal Title and Escrow, Inc.............................................. Tennessee

Tennessee

Professional Title, LLC ....................................................

Realty Center Title LLC ..................................................

Tennessee

Stewart Title of West Tennessee, Inc ...............................

Sykes Title........................................................................

Tennessee

TN Home Builders ........................................................... Tennessee

United Title Services, Inc ................................................. Tennessee

Texas

Chadco.............................................................................. Texas

Texas

HMH Title LLC ...............................................................

Landata Group, Inc........................................................... Texas

Texas

River City ........................................................................ South Dakota

Abstract Title ...................................................................

Tennessee

Elite Title, LLC................................................................. Tennessee

First Data Systems, Inc..................................................... Tennessee

Tennessee

Home Closing Title LLC .................................................

Montgomery Title LLC ...................................................

National Land Title Services, Inc ..................................... Tennessee

Performance Title, Inc ...................................................... Tennessee

Tennessee

Sidwell Title Insurance Agency, LP.................................

Stewart Title of Tennessee, Inc......................................... Tennessee

Tennessee

Summit Land Title, LLC .................................................. Tennessee

Tennessee

Titan Land Title LLC .......................................................

Title Connection, LLC...................................................... Tennessee

Advance Title Company...................................................

DH Title Company, LLC.................................................. Texas

Dominion Title LLC......................................................... Texas

Dominion Title of Dallas.................................................. Texas

East-West, Inc................................................................... Texas

Electronic Closing Services, Inc.......................................

Fulghum, Inc.....................................................................

GC Acquisition, Inc.......................................................... Texas

GESS Investments LP....................................................... Texas

GESS Management LLC .................................................. Texas

Gracy Title Co., L.C......................................................... Texas

Texas

IH Title Company ............................................................ Texas

Landata Site Services........................................................ Texas

Landata Systems, Inc........................................................

Landata Technologies....................................................... Texas

Medina County Abstract Company, Inc ...........................

Millennium Title............................................................... Texas

(continued)

Exhibit 21.1

State of

(continued)

STEWART INFORMATION SERVICES CORPORATION AND SUBSIDIARIES

Name of Subsidiary

Incorporation

Millennium Title of North Texas .....................................

Texas

Powers Title, LLC ............................................................

Premier Title of Dallas...................................................... Texas

Texas

Professional Real Estate Tax Service North Texas ..........

Texas

Stewart Management Information, Inc ............................. Texas

Stewart Mortgage Information Company.........................

Stewart Title Company ....................................................

Texas

Stewart Transfer Services................................................. Texas

Stewart-UAM, Inc ............................................................ Texas

Texas

MTH Title Company......................................................... Texas

National Order Center....................................................... Texas

NETC Title Company, LLC..............................................

New Century – Dallas ...................................................... Texas

Ortem Investments, Inc..................................................... Texas

Texas

Premier Title, L.C............................................................. Texas

Primero, Inc ...................................................................... Texas

Priority Title - Dallas........................................................

Priority Title - Houston.....................................................

Professional Real Estate Tax Service, LLC......................

Texas

Prosperity Title Company ................................................ Texas

Realty Bid......................................................................... Texas

REIData, Inc..................................................................... Texas

S&S Title LLC.................................................................. Texas

Southland Information...................................................... Texas

STC-STT, LLC dba StarTex Title Company.................... Texas

Stewart Default Solutions, Inc.......................................... Texas

Stewart Financial Services................................................ Texas

Stewart Information International, Inc..............................

Stewart Investment Services Corporation......................... Texas

Texas

Stewart Priority Resources dba General American

Resources .......................................................................

Texas

Stewart REI Group, Inc. .................................................. Texas

Stewart Realty Solutions, Inc............................................ Texas

Stewart Solutions.............................................................. Texas

Stewart Title Austin, Inc................................................... Texas

Texas

Stewart Title Company of Rockport, Inc.......................... Texas

Stewart Title of Cameron County..................................... Texas

Stewart Title of Corpus Christi ........................................ Texas

Stewart Title Guaranty Company ..................................... Texas

Stewart Title of Eagle Pass............................................... Texas

Stewart Title of Lubbock, Inc........................................... Texas

Stewart Title of Midland, LLC ......................................... Texas

Stewart Title North Texas, Inc..........................................

Stewart Title of Texarkana .............................................. Texas

Stewart Title of Wichita Falls........................................... Texas

Strategic Title Company, LLC .........................................

Titles, Inc.......................................................................... Texas

WRH Title Company ....................................................... Texas

(continued)

Exhibit 21.1

(continued)

STEWART INFORMATION SERVICES CORPORATION AND SUBSIDIARIES

State of

Name of Subsidiary

Incorporation

Realty Services ................................................................. Utah

Land Title Insurance......................................................... Virginia

Lynnhaven Title Agency, LLC.........................................

Virginia

Stewart Title of Mountain View, LLC..............................

Virginia

Virginia Oaks, LLC .........................................................

Charter Title Insurance Company.....................................

Washington

Stewart Title of Bellingham..............................................

Washington

Stewart Title of Washington.............................................

Whitman County...............................................................

Wisconsin

(continued)

Bonneville Title................................................................ Utah

Cornerstone Title Services, Inc......................................... Utah

Superior Title.................................................................... Utah

Automated Title Solutions, LLC ...................................... Virginia

Cedar Run Title & Abstract.............................................. Virginia

Kanawha Land Title Services, LLC.................................. Virginia

Land Title Research, Inc................................................... Virginia

Virginia

Signature & Stewart Settlements, L.C.............................. Virginia

Smart Choice of Hampton Roads .................................... Virginia

Smart Choice Settlements, L.C......................................... Virginia

Stewart Title and Escrow, Inc...........................................

Stewart Title & Settlement Services, Inc.......................... Virginia

Virginia

Stewart Title of Shenandoah Valley, L.C.........................

Virginia

Washington

Real Property Information, Inc.........................................

Security Building.............................................................. Washington

Security Title .................................................................... Washington

Spokane ............................................................................ Washington

Washington

Stewart Title of Island County .........................................

Stewart Title of Snohomish County.................................. Washington

Stewart Title of Tacoma, Inc ............................................ Washington

Stewart Title of the Tri-Cities, LLC ................................ Washington

Washington

Stewart Title of Western Washington............................... Washington

Washington

Courtesy Title LLC .......................................................... Wisconsin

Franklin Title, LLC .......................................................... Wisconsin

Homeowners Closing Services......................................... Wisconsin

Stewart Title of Wisconsin .............................................. Wisconsin

Title One Land Title Services LLC .................................

Title One Menomonie LLC ............................................. Wisconsin

Title West (Title West Closing) ....................................... Wisconsin

Exhibit 21.1

(continued)

STEWART INFORMATION SERVICES CORPORATION AND SUBSIDIARIES

State of

Name of Subsidiary

Incorporation

Landata Inc. of Belize....................................................... Belize

Canada

SII-Hungary...................................................................... Hungary

Stewart International Sp. Z o.o......................................... Poland

Romania

Stewart Title Guaranty de Mexico, ABC..........................

Stewart Title Latin America, S.A. ...................................

INTERNATIONAL

Hato Rey Insurance Agency, Inc....................................... Puerto Rico

Lawyers Mortgage Network Inc.......................................

San Juan Abstract Company............................................. Puerto Rico

Stewart Costa Rica ABC, S.A. ........................................ Costa Rica

Stewart Dominica S.A. .................................................... Dominican Republic

Stewart International Gayrimenkul Sistemleri ve Yatirim

Anonim .......................................................................

Turkey

Stewart International Informacije d. o. o. ........................ Slovenia

Stewart International s.r.o. ............................................... Czech Republic

Stewart International s.r.o. ............................................... Slovakia

Stewart Korea, Ltd............................................................ Korea

Stewart Romania S.R.L. ..................................................

Stewart Title Baja ............................................................ Mexico

Stewart Title Eastern Caribbean, Ltd ............................... Anguilla

Stewart Title Insurance Company..................................... Canada

Mexico

Costa Rica

Stewart Title Limited Australian Branch.......................... Australia

Stewart Title of Guadalajara ............................................ Mexico

Stewart Title Riviera Maya S.A. ...................................... Mexico

Stewart Title United Kingdom.......................................... United Kingdom

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

/s/ KPMG LLP

The Board of Directors

Stewart Information Services Corporation

We consent to incorporation by reference in the registration statements (No. 33-59747, No. 33-62535, No. 333-03981, No.

333-24075, No. 333-65971, No. 333-77579, No. 333-88708 and No. 333-124954) on Form S-8 and the registration statement

(No. 333-58022) on Form S-3 of Stewart Information Services Corporation of our reports dated March 7, 2006, with respect

to the consolidated balance sheets of Stewart Information Services Corporation and subsidiaries as of December 31, 2005 and

2004, and the related consolidated statements of earnings, retained earnings and comprehensive earnings, and cash flows for

each of the years in the three-year period ended December 31, 2005, and all related financial statement schedules,

management’s assessment of effectiveness of internal control over financial reporting as of December 31, 2005 and the

effectiveness of internal control over financial reporting as of December 31, 2005, which reports appear in the December 31,

2005 Annual Report on Form 10-K of Stewart Information Services Corporation.

Houston, Texas

March 10, 2006

1. I have reviewed this annual report on Form 10-K of Stewart Information Services Corporation (registrant);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact

necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading

with respect to the period covered by this report;

/s/ Malcolm S. Morris

Exhibit 31.1

CERTIFICATION

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Malcolm S. Morris, certify that:

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in

all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods

presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and

procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as

defined in Exchange Act Rules 13a – 15(f) and 15d – 15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed

under our supervision, to ensure that material information relating to the registrant, including its consolidated

subsidiaries, is made known to us by others within those entities, particularly during the period in which this report

is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be

designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and

the preparation of financial statements for external purposes in accordance with generally accepted accounting

principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our

conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by

this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during

the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that

has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial

reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over

financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons

performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial

reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and

report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the

registrant’s internal control over financial reporting.

Dated: March 2, 2006

Title: Co-Chief Executive Officer and

Malcolm S. Morris

Chairman of the Board of Directors

CERTIFICATION

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be

designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and

the preparation of financial statements for external purposes in accordance with generally accepted accounting

principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our

conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by

this report based on such evaluation; and

Exhibit 31.2

I, Stewart Morris, Jr., certify that:

1. I have reviewed the annual report on Form 10-K of Stewart Information Services Corporation (registrant);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact

necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading

with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in

all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods

presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and

procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as

defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed

under our supervision, to ensure that material information relating to the registrant, including its consolidated

subsidiaries, is made known to us by others within those entities, particularly during the period in which this report

is being prepared;

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during

the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that

has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial

reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over

financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons

performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial

reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and

report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the

registrant’s internal control over financial reporting.

Dated: March 2, 2006

/s/ Stewart Morris, Jr.

Stewart Morris, Jr.

Title: Co-Chief Executive Officer,

President and Director

Exhibit 31.3

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Max Crisp, certify that:

1. I have reviewed the annual report on Form 10-K of Stewart Information Services Corporation (registrant);

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be

designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and

the preparation of financial statements for external purposes in accordance with generally accepted accounting

principles;

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over

financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons

performing the equivalent functions):

CERTIFICATION

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact

necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading

with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in

all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods

presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and

procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as

defined in Exchange Act Rules 13a -15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed

under our supervision, to ensure that material information relating to the registrant, including its consolidated

subsidiaries, is made known to us by others within those entities, particularly during the period in which this report

is being prepared;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our

conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by

this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during

the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that

has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial

reporting; and

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial

reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and

report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the

registrant’s internal control over financial reporting.

Dated: March 2, 2006

/s/ Max Crisp

Max Crisp

Title: Executive Vice President and Chief Financial Officer,

Secretary-Treasurer, Director and Principal Financial Officer

Exhibit 32.1

CERTIFICATION

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Stewart Information Services Corporation (the "Company") on Form 10-K for the

period ending December 31, 2005 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I,

Malcolm S. Morris, Co-Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant

to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of

operations of the Company.

Dated: March 2, 2006

/s/ Malcolm S. Morris

Name: Malcolm S. Morris

Title: Co-Chief Executive Officer and

Chairman of the Board of Directors

A signed original of this written statement required by Section 906 has been provided to Stewart Information Services

Corporation and will be retained by Stewart Information Services Corporation and furnished to the Securities and Exchange

Commission or its staff upon request.

Exhibit 32.2

CERTIFICATION

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Stewart Information Services Corporation (the "Company") on Form 10-K for the

period ending December 31, 2005 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I,

Stewart Morris, Jr., Co-Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant

to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of

operations of the Company.

Dated: March 2, 2006

/s/ Stewart Morris, Jr.

Name: Stewart Morris, Jr.

Title: Co-Chief Executive Officer,

President and Director

A signed original of this written statement required by Section 906 has been provided to Stewart Information Services

Corporation and will be retained by Stewart Information Services Corporation and furnished to the Securities and Exchange

Commission or its staff upon request.

Exhibit 32.3

CERTIFICATION

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Stewart Information Services Corporation (the "Company") on Form 10-K for the

period ending December 31, 2005 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I,

Max Crisp, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section

906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of

operations of the Company.

Dated: March 2, 2006

/s/ Max Crisp

Name: Max Crisp

Chief Financial Officer, Secretary-

Title: Executive Vice President and

Treasurer, Director and

Principal Financial Officer

A signed original of this written statement required by Section 906 has been provided to Stewart Information Services

Corporation and will be retained by Stewart Information Services Corporation and furnished to the Securities and Exchange

Commission or its staff upon request.