




                                    FORM 10-Q
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549




(Mark One)

[ x ]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934



For the quarterly period ended September 30, 1998



[   ]    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    1-12688



                    STEWART INFORMATION SERVICES CORPORATION
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)



          Delaware                                       74-1677330
-------------------------------             ------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)


                     1980 Post Oak Blvd., Houston  TX 77056
           ------------------------------------------------------------
           (Address of principal executive offices, including zip code)


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



 -------------------------------------------------------------------------------
(Former name,former address and former fiscal year,if changed since last report)



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,  and (2) has been subject to such
filing requirements for the past 90 days. Yes  X   No
                                              ---     ---


Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

                              Common             6,493,556
                      Class B Common               525,006

<PAGE>




                                    FORM 10-Q
                                QUARTERLY REPORT
                        Quarter Ended September 30, 1998





                                TABLE OF CONTENTS





Item No.                                                                  Page
--------                                                                  ----

                                     Part I


  1.             Financial Statements                                       1

  2.             Management's Discussion and Analysis of Financial
                 Condition and Results of Operations                        5





                                    Part II


  1.             Legal Proceedings                                         10

  5.             Other Information                                         11

  6.             Exhibits and Reports on Form 8-K                           9

                 Signature                                                 12

<PAGE>





                    STEWART INFORMATION SERVICES CORPORATION

                       CONSOLIDATED STATEMENTS OF EARNINGS
                     FOR THE QUARTERS AND NINE MONTHS ENDED
                           SEPTEMBER 30, 1998 and 1997



<TABLE>
<CAPTION>


                                                    THIRD QUARTER                NINE MONTHS
                                               ---------------------       ---------------------

                                                  1998       1997             1998       1997
                                               ---------- ----------       ---------- ----------

                                                    ($000 Omitted)             ($000 Omitted)
<S>                                              <C>         <C>              <C>        <C>  
Revenues
    Title premiums, fees and other revenues       233,385    168,924          632,912    466,522
    Real estate information services               12,265      9,616           36,112     24,221
    Investment income                               4,703      3,962           13,479     11,550
    Investment gains - net                             72        124              403        305
                                                ---------   --------         --------    -------
                                                  250,425    182,626          682,906    502,598

Expenses
    Amounts retained by agents                    114,465     84,504          304,156    235,679
    Employee costs                                 62,690     48,236          180,935    135,749
    Other operating expenses                       35,219     29,580           99,701     80,936
    Title losses and related claims                10,284      8,035           28,523     22,138
    Depreciation and amortization                   3,809      3,110           10,670      8,729
    Interest                                          306        400            1,089        966
    Minority interests                              1,233        561            3,662      1,471
                                                ---------   --------         --------    -------
                                                  228,006    174,426          628,736    485,668
                                                ---------   --------         --------    -------

Earnings before taxes                              22,419      8,200           54,170     16,930
Income taxes                                        8,371      2,713           20,239      5,851
                                                ---------   --------         --------    -------

Net earnings                                       14,048      5,487           33,931     11,079
                                                =========   ========         ========    =======



Average number of shares outstanding (000)          7,094      6,900            7,064      6,867

Earnings per share - basic                           2.00       0.80             4.87       1.63

Earnings per share - diluted                         1.98       0.80             4.80       1.61
                                                =========  =========         ========    =======

Comprehensive earnings:
Net earnings                                       14,048      5,487           33,931     11,079
Changes in unrealized investment gains,
   net of taxes                                     2,582      2,032            1,971      1,288
                                                ---------   --------         --------    -------
Comprehensive earnings                             16,630      7,519           35,902     12,367
                                                =========  =========         ========    =======


</TABLE>






                                                        -1-
<PAGE>

                    STEWART INFORMATION SERVICES CORPORATION

                           CONSOLIDATED BALANCE SHEETS
                    SEPTEMBER 30, 1998 AND DECEMBER 31, 1997


<TABLE>
<CAPTION>

                                                                      SEP 30        DEC 31
                                                                       1998          1997
                                                                    ----------    ----------
                                                                          ($000 Omitted)
     <S>                                                            <C>            <C>    

      Assets
          Cash and cash equivalents                                     43,066        30,391
          Short-term investments                                        49,022        35,761
          Investments - statutory reserve funds                        148,280       138,462
          Investments - other                                           76,891        71,044
          Receivables                                                   37,706        31,868
          Property and equipment                                        33,562        30,415
          Title plants                                                  23,631        21,778
          Goodwill                                                      19,069        18,427
          Deferred income taxes                                         14,735        15,632
          Other                                                         25,635        23,913
                                                                    ----------    ----------

                                                                       471,597       417,691
                                                                    ==========    ==========



      Liabilities
          Notes payable                                                 16,631        19,087
          Accounts payable and accrued liabilities                      34,829        27,917
          Estimated title losses                                       168,680       156,791
          Minority interests                                             5,350         4,392

      Contingent liabilities and commitments

      Stockholders' equity
          Common and Class B Common Stock and
            additional paid-in capital                                  61,886        59,828
          Retained earnings                                            177,714       145,140
          Other comprehensive earnings                                   6,507         4,536
                                                                    ----------   -----------
            Total stockholders' equity ($35.07 per share at
              September 30, 1998)                                      246,107       209,504
                                                                    ----------   -----------

                                                                       471,597       417,691
                                                                    ==========   ===========




</TABLE>


















                                                        -2-

<PAGE>

                    STEWART INFORMATION SERVICES CORPORATION

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997





<TABLE>
<CAPTION>


                                                                             1998         1997
                                                                           --------     --------
                                                                                ($000 Omitted)



   <S>                                                                     <C>         <C>    

    Cash provided by operating activities (Note)                             58,697       16,894


    Investing activities:
         Purchases of property and equipment and title plants - net         (13,914)      (9,612)
         Proceeds from investments matured and sold                          37,281       33,020
         Purchases of investments                                           (62,772)     (36,552)
         Increases in notes receivable                                       (1,644)      (1,756)
         Collections on notes receivable                                      1,303          594
         Cash paid for the acquisition of subsidiaries - net                 (1,476)      (2,608)
                                                                         ----------    ---------
    Cash used by investing activities                                       (41,222)     (16,914)


    Financing activities:
         Dividends paid                                                      (1,357)      (1,196)
         Distribution to minority interests                                  (2,763)      (1,361)
         Proceeds from issuance of stock                                      2,228           96
         Proceeds of notes payable                                            5,466        8,803
         Payments on notes payable                                           (8,374)      (2,714)
                                                                         ----------    ---------
    Cash (used) provided by financing activities                             (4,800)       3,628
                                                                         ----------    ---------

    Increase in cash and cash equivalents                                    12,675        3,608
                                                                         ==========   ==========

</TABLE>





     NOTE:  Reconciliation of net earnings to the above amounts -
<TABLE>
    <S>                                                                    <C>          <C>    
     Net earnings                                                            33,931       11,079
     Add (deduct):
         Depreciation and amortization                                       10,670        8,729
         Provision for title losses in excess of payments                    11,102        5,050
         Provision for uncollectible amounts - net                             (502)         403
         Increase in accounts receivable - net                               (4,033)      (4,477)
         Increase (decrease) in accounts payable and
                accrued liabilities - net                                     7,389       (2,715)
         Minority interest expense                                            3,662        1,471
         Equity in net earnings of investees                                   (701)        (922)
         Realized investment gains - net                                       (403)        (305)
         Other - net                                                         (2,418)      (1,419)
                                                                         ----------     ---------

     Cash provided by operating activities                                   58,697       16,894
                                                                         ==========     =========
</TABLE>





                                                        -3-

<PAGE>

                    STEWART INFORMATION SERVICES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








Note 1:   Interim Financial Statements

The  financial  information  contained in this report for the nine month periods
ended  September 30, 1998 and 1997,  and as at September 30, 1998, is unaudited.
In the opinion of management,  all adjustments necessary for a fair presentation
of this  information  for  all  unaudited  periods,  consisting  only of  normal
recurring  accruals,  have been made.  The results of operations for the interim
periods are not necessarily indicative of results for a full year.

Certain  amounts  in  the  1997  consolidated  financial  statements  have  been
reclassified for comparative  purposes.  Net earnings,  as previously  reported,
were not affected.



















































                                       -4-
<PAGE>

Item 2:    Management's Discussion and Analysis of Financial Condition and
           Results of Operations

GENERAL

The Company provides title insurance and related services through more than
4,000 issuing locations in the United States and several international  markets.
A leading  provider  of real estate  information  technology  and  connectivity,
Stewart  also meets the needs of the real estate and mortgage  industry  through
the  electronic  delivery  of services  needed for  settlement.  These  services
include  title  insurnace,   title  reports,   flood  determinations,   property
appraisals,   document  preparation,   credit  reports  and  other  real  estate
information.  In addition, Stewart provides expertise in tax-deferred exchanges,
surveys and field services.

In general,  the  principal  factors  which  contribute  to  increases  in title
revenues include declining  mortgage interest rates (which usually increase home
sales),  increases  in  refinancing  transactions,  rising home  prices,  higher
premium rates, increased market share,  additional revenues from new offices and
increased  revenue  from  non-residential,   commercial  transactions.  Although
relatively few in number,  large  commercial  transactions  usually yield higher
premiums.

A  comparison  of the  results of  operations  of the Company for the first nine
months of 1998 with the first nine months of 1997 follows:

REVENUES

Revenues from title premiums and fees increased $166.4 million,  or 35.7%,  from
the  comparable  period in 1997.  Mortgage  interest  rates declined by 67 basis
points from the first week in October 1997 to the last week in  September  1998,
falling to 6.64%. Refinancing transactions, in particular, were higher in 1998.

The  number  of  closings  handled  by the  Company  increased  48.9%.  Closings
increased in  California,  Texas,  Colorado and most other  states.  The average
revenue per closing decreased  slightly in 1998 due, in part, to a larger number
of refinancings with their lower premiums.  Increases in commercial transactions
and revenues from agents also contributed to higher revenues in 1998.

A 3% reduction in Texas title premiums became effective August 1, 1998. However,
the Company is experiencing new home equity business in Texas that did not exist
before 1998.

Real estate information revenues were $36.1 million in 1998 and $24.2 million in
1997.  The increase was primarily due to a significant  number of new businesses
started by the Company in 1997.

Investment income increased 16.7% in 1998 due to an increase in the average
balances invested and the increased yield on the balances.

EXPENSES

Amounts  retained  by  agents  increased  $68.5  million,  or  29.1%,  over  the
comparable  period in 1997. The percentage of retention by agents to the amounts
of revenues from agents was 80.3% and 80.7% for the nine months ended  September
30, 1998 and September 30, 1997, respectively.

Employee expenses  increased $45.2 million,  or 33.3%, in 1998 primarily because
of a higher average  number of employees  during 1998 compared to a year ago and
increased average rates of compensation, including bonuses and profit sharing.

The Company  continued to maintain higher staff levels in comparison with a year
ago. Increases were in areas of title operations from increased traction volume,
automating services rendered to customers and improving its own processes,  real
estate  information  services that are being developed and sold to customers and
the expansion of its national marketing efforts.

The Company  believes the  development  and sale of new products and services is
important to its future.  Through  automated  operating  processes,  the Company
expects to add customer revenues and reduce operating  expenses and title losses
in the future.

Other operating expenses increased by $18.8 million, or 23.2%, primarily because
of the increase in transaction volume. Expenses that increased include appraisal
fees, premium taxes,  expenses of new offices,  business  promotion  and search
fees.  Other  operating  expenses also include rent,  supplies,  travel,  policy
forms,  delivery  costs,  title  plant  expenses  and  telephone.  Most of these
expenses  follow,  to varying  degrees,  the changes in  transaction  volume and
revenues.




                                       -5-
<PAGE>

Provisions for title losses and related claims were up $6.4 million, or 28.8% in
1998. The industry and the Company  continue to have improved claim  experience.
As a percentage of title  premiums,  fees and other  revenues,  the provision in
1998 decreased to 4.5% versus 4.8% in 1997.

The provision for income taxes represented effective tax rates of 37% and 35% in
1998 and 1997, respectively.


A comparison  of the results of  operations  of the Company for the third 
quarter of 1998 with the third quarter of 1997 follows:


REVENUES

Revenues from title premiums and fees increased $64.5 million,  or 38.2%, from a
year ago.  Mortgage  interest rates were  approximately 60 basis points lower in
the third  quarter  of 1998 than the same  period a year  ago,  increasing  real
estate transactions.  Refinancing  transactions,  in particular,  were higher in
1998.

The  number  of  closings  handled  by the  Company  increased  46.2%.  Closings
increased  in Texas,  California,  Colorado and most other  states.  The average
revenue per closing decreased  slightly in 1998 due, in part, to a larger number
of refinancings with their lower premiums.  Increases in commercial transactions
and revenues from agents also contributed to higher revenues in 1998.

A 3% reduction in Texas title premiums became effective August 1, 1998. However,
the Company is experiencing new home equity business in Texas that did not exist
before 1998.

Real estate information  revenues were $12.3 million in 1998 and $9.6 million in
1997.  The increase was primarily due to a significant  number of new businesses
started by the company in 1997.

Investment  income  increased 18.7% in 1998 due to an increase in the average
balances  invested and the increased yield on the balances.


EXPENSES

Amounts  retained  by  agents  increased  $30.0  million,  or  35.5%,  over  the
comparable  period in 1997. The percentage of retention by agents to the amounts
of revenues by agents was 80.6% and 80.8% for the nine  months  ended  September
30, 1998 and September 30, 1997, respectively.

Employee expenses  increased $14.5 million,  or 30.0%, in 1998 primarily because
of a higher average  number of employees  during 1998 compared to a year ago and
increased average rates of compensation, including bonuses and profit sharing.

The Company  continued to maintain higher staff levels in comparison with a year
ago.  Increases were in areas of title  operations  from  increased  transaction
volume,  automating  services  rendered  to  customers  and  improving  its  own
processes, real estate information services that are being developed and sold to
customers and the expansion of its national marketing efforts.

The Company  believes the  development  and sale of new products and services is
important to its future.  Through  automated  operating  processes,  the Company
expects to add customer revenues and reduce operating  expenses and title losses
in the future.

Other operating expenses increased by $5.6 million, or 19.1%,  primarily because
of the increase in transaction  volume.  Expenses that increased include premium
taxes,  search fees,  telephone  and  supplies.  Other  operating  expenses also
include rent,  travel,  policy forms,  delivery costs,  title plant expenses and
business  promotion.  Most of these expenses  follow,  to varying  degrees,  the
changes in transaction volume and revenues.

Provisions for title losses and related claims were up $2.2 million, or 28.0% in
1998. The industry and the Company  continue to have improved claim  experience.
As a percentage of title premiums, fees and other revenues, the provision in the
third  quarter of 1998  decreased  to 4.4% versus  4.8% in the third  quarter of
1997.

The provision for income taxes represented effective tax rates of 37% and 33% in
1998 and 1997,  respectively.  The 1998 effective tax rate was higher  primarily
because  nontaxable  income  from  municipal  bonds  was  significantly  less in
relation to pretax profits and due to refunds received in 1997 for a federal net
operating  loss  carryforward  and a change in the  filing  method for a certain
state.




                                       -6-

<PAGE>

Year 2000 Issue

Information  technology is a crucial part of the Company's business. The Company
recognizes  the  technological  challenges  associated  with the Year 2000 Issue
("Y2K"). It has established a formal compliance plan to address these challenges
and a Y2K Team to carry  out this  plan.  The  plan  includes  several  distinct
phases: (1) assessment, (2) remediation, (3) testing and (4) implementation. The
progress  of the  work of the Y2K  Team is  monitored  by the  Company's  senior
management and the audit committee of the Company's board of directors.

Computer software is used in the title and real estate  information  segments of
the  Company's  business.  The uses of  software  in the title  segment  include
searching and  examining  titles,  closing  transactions,  accounting  for agent
policies and claims. In the real estate information segment, software is used in
providing  mortgage  services,  such as  flood  determinations,  appraisals  and
assignments.

Most of this  software was  developed by the Company in recent  years,  with Y2K
issues in mind.  The Company has  substantially  completed  its  assessment  and
remediation of all this software.  All remaining remediation and testing of this
software  is  scheduled   to  be  completed  by  the  first   quarter  of  1999.
Implementation is expected to be completed by the second quarter of 1999.

In  addition  to its work on its  internally-developed  computer  software,  the
Company has  conducted  an inventory of its systems  worldwide.  This  inventory
includes  software  and  hardware  acquired  from third  parties  for use by the
Company. The inventory also includes critical non-information technology systems
which  may  house  non-compliant,  imbedded  technology,  such as fax  machines,
photocopiers,  telephone  facilities  and other common  devices.  Assessment and
remediation of these systems is scheduled for completion by the first quarter of
1999. Mission critical systems have been given high priority.

Certain  subsidiaries  that have been  acquired by the Company and still operate
with  different  systems from the Company's  have been given high priority under
the  Company's  Y2K plan.  The  Company  expects to  complete  all phases of Y2K
compliance for these subsidiaries in the first quarter of 1999.

In addition to addressing the Company's own systems, as described above, the Y2K
Team must assess the state of  readiness of the systems of other  entities  with
which it does business.  These include  independent  title insurance  agents and
other business partners, such as county courthouses and lenders, whose condition
or  operational  capability is important to the Company.  Failure by these third
parties to adequately  resolve their Y2K problems could have a material  adverse
effect on the Company's operations.

The Company believes its success in being Y2K compliant will not be conclusively
known  until the year 2000 is  actually  reached.  Failure by one or more of the
Company's  own systems  could result in lost  revenues and  additional  expenses
required to carry out manual  processing of  transactions.  The magnitude of the
failure of external  forces on the business of the Company  cannot be predicted.
Failures by the  telecommunications  industry,  banking  institutions and others
could have far-reaching,  materially  adverse effects on the Company,  the title
insurance industry and the entire economy.

The Company expects to complete its Y2K program in a timely manner.  However,
the Company  believes that it is not possible to determine  with  certainty that
all Y2K problems  affecting the Company have been  identified or corrected.  The
number of devices  that  could be  affected  and the  interactions  among  these
devices are simply too  numerous.  In addition,  the Company  cannot  accurately
predict how many failures related to the Y2K problem will occur or the severity,
duration or financial  consequences  of such failures.  The Company has hired an
outside  Y2K  consultant  to assist  the  Company  in  meeting  its goals and in
developing  contingency  plans to define and  address  the  worst-case  scenario
likely to be faced by the  Company.  The plan is  expected to be in place in the
first quarter of 1999.

The Company has expended  approximately  $0.5 million  during 1997 and the first
three quarters of 1998 directly  related to assessing,  remediating  and testing
its  information  technology  systems.  These  amounts  have  been  funded  from
operations.

As stated  previously,  the Company only recently developed most of the software
it uses today. It has also purchased substantial amounts of hardware since 1996.
The  software  development  and  hardware  purchases  were done as a part of the
Company's goal to automate its operations  rather than solely for the purpose of
achieving Y2K compliance. These costs have been significant but are not included
in the amount shown in the preceding paragraph.






                                       -7-
<PAGE>

The  Company  currently  estimates  that the  total  cost of its Y2K  compliance
program will not exceed $3.5 million. Approximately half of the remaining amount
to be spent is for depreciable  hardware purchases for certain offices which may
need to be upgraded  sooner than planned due to Y2K issues.  Additional  amounts
relate  to  travel  and  labor  costs   associated  with  installing   compliant
internally-developed  software, allocated management time and consulting fees. A
significant  portion of the remaining  costs are expected to be incurred  during
the first and second quarters of 1999.

This  entire  section  ("Year  2000  Issue") is hereby  designated  a "Year 2000
Readiness  Disclosure",  as defined in the Year 2000  Information  and Readiness
Disclosure Act.

LIQUIDITY AND CAPITAL RESOURCES

Operating margins represent the primary source of financing for the Company, but
this may be  supplemented  by bank  borrowings.  The  capital  resources  of the
Company,   and  the  present   debt-to-equity   relationship,   are   considered
satisfactory.

FORWARD LOOKING STATEMENTS

All  statements,  other than  statements of historical  facts,  included in this
report which address activities, events or developments that the Company expects
or anticipates 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,  changes in mortgage interest rates,  employment
levels, actions of competitors, changes in real estate markets, general economic
conditions and  legislation,  primarily  legislation  related to insurance,  and
other  risks and  uncertainties  discussed  in the  Company's  filings  with the
Securities and Exchange Commission.















































                                       -8-

<PAGE>




                                     PART II







                                                                         Page
                                                                      ----------


  Item 1.  Legal Proceedings                                              10


  Item 5.  Other Information                                              11


  Item 6.  Exhibits and Reports on Form 8-K


      (a)  Index to exhibits


      (b)  There  were no reports on Form 8-K filed  during  the  quarter  ended
           September 30, 1998.












































                                       -9-
<PAGE>

ITEM 1. LEGAL PROCEEDINGS


           The  Registrant  is a party to  routine  lawsuits  incidental  to its
business,  most of which involve disputed policy claims. In many of these suits,
the plaintiff seeks exemplary or treble damages in excess of policy limits based
on the alleged malfeasance of an issuing agent of the Registrant. The Registrant
does not  expect  that any of these  proceedings  will have a  material  adverse
effect on its financial condition.


































































                                      -10-
<PAGE>

ITEM 5. OTHER INFORMATION


           Proxies for the Company's  annual meeting of  stockholders to be held
in 1999  may  confer  discretionary  power to vote on any  matter  that may come
before the meeting unless,  with respect to a particular  matter (i) the Company
receives notice, by certified mail, return receipt  requested,  addressed to the
Company's Secretary,  not later than the 15th day of February next preceding the
meeting  that the matter will be  presented  at the annual  meeting and (ii) the
Company fails to include in its proxy statement for the annual meeting advice on
the nature of the matter and how the Company  intends to exercise its discretion
to vote on the matter.
































































                                      -11-

<PAGE>



                                    SIGNATURE




Pursuant to the  requirements  of the  Securities  and Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.





                                        Stewart Information Services Corporation
                                        ----------------------------------------
                                                                    (Registrant)






November 12, 1998
----------------
    Date






                                            /S/         MAX  CRISP
                                 -----------------------------------------------
                                                                       Max Crisp
                          (Vice President-Finance, Secretary-Treasurer, Director
                                 and Principal Financial and Accounting Officer)
                                                            



































                                      -12-

<PAGE>



                                INDEX TO EXHIBITS







EXHIBIT
NUMBER                             DESCRIPTION
-------                            -----------

  3.2             -   By-Laws of the Registrant, as amended September 1, 1998 


  4               -   Rights of Common and Class B Common Stockholders


 27.0             -   Financial data schedule


 28.2             -   Details of investments, as reported in the
                      Quarterly Report to Shareholders




