Findings of Fact

1. Approximately 50 companies offer hot air balloon rides throughout California, carrying some 60,000 passengers per year and generating millions of dollars in tourist revenue.

2. In early 2002, liability insurance that met the requirements of GO 120-C became unavailable to California balloon operators because insurers withdrew from this market or limited their proffer of insurance in a manner not acceptable under California law.

3. On May 30, 2003, Petitioners filed an application for temporary relief from the requirements of GO 120-C and a petition seeking permanent changes in GO 120-C.

4. In acting on the application, the Commission in D.03-07-047 provided alternative relief in insurance requirements for hot air balloon operators.

5. The Commission is required under Pub. Util. Code §§ 5500-5512 to establish and enforce minimum insurance requirements for California commercial air operators, including hot air balloon operators.

6. Under GO 120-C, the Commission requires hot air balloon operators to comply with insurance requirements applicable to aircraft with a passenger seating capacity of from 1 to 20 persons.

7. Balloon operators are required to file proof of their insurance in the form of a copy of the policy certified by the insurer, an abstract of the policy, or, more commonly, by a Commission-approved certificate of insurance called the PE-794.

8. GO 120-C requires a minimum of $100,000 liability insurance per passenger seat on all aircraft flown by a balloon operator, and this amount is generally comparable to minimums imposed for other modes of transportation regulated by the Commission.

9. GO 120-C is the only general order that sets a $100,000 minimum for property damage and $300,000 minimum per occurrence for persons on the ground.

10. In September 2003, Houston Casualty began offering hot air balloon insurance that complied with all requirements of GO 120-C.

11. At time of hearing, the Commission had accepted Form PE-794 filings by Houston Casualty on behalf of three hot air balloon operators in California.