The correct answer is C) Each nonmetallic oil transfer hose, larger than a 3" inside diameter must be inspected, and tested annually. This is correct because the regulations require that all nonmetallic oil transfer hoses larger than 3 inches in diameter must be inspected and pressure tested annually to ensure their integrity and safety. Option A is incorrect because any visible damage to the hose reinforcement would require the hose to be taken out of service. Option B is incorrect because the regulations require the pressure gauges to be accurate within 2%, not 5%. Option D is incorrect because not all the statements are true.