Which statement is true regarding the Iowa Insurance Fraud Act?

The Iowa Insurance Fraud Act is designed to combat insurance fraud, which can indeed help alleviate financial burdens on consumers by potentially reducing the costs associated with fraudulent claims. When fraudulent activities are minimized, insurers can operate more efficiently and pass on those savings to policyholders in the form of lower premiums. This act addresses both fraud in claims processing and pricing, as it promotes fair practices in the insurance market.

The rationale behind indicating that the act aims to lessen the burden of premiums is rooted not only in consumer protection but also in maintaining the integrity of the insurance system. By deterring fraudulent claims, overall costs in the insurance sector are likely to decrease, benefiting consumers with more affordable premiums.

The options suggesting that the act addresses only fraudulent claims or only protects insurance companies limit the broader scope of its impact. Additionally, indicating that the act has no influence on premiums contradicts its purpose to regulate fraud which directly affects financial outcomes for consumers.