Final answer:
Statements on an insurance application believed to be true are called representations. The correct answer is option A).
Step-by-step explanation:
Statements made on an insurance application that are believed to be true to the best of the applicant's knowledge are called representations. Representations can be considered as a faithful belief that the details provided are accurate.
However, it's important to differentiate them from warranties as warranties are explicitly guaranteed to be true and can be a condition for the validity of an insurance policy. Unlike misrepresentations, which are false statements, representations are not intended to deceive.
The accuracy of representations can influence the underwriting process and the issuance of an insurance policy. Representations are statements of fact or belief made by the applicant to the insurance company, and they are considered as true and binding.