Final answer:
The insanity defense is based on the concept that individuals with a mental illness cannot form the intent needed to commit a crime and should therefore not be punished.
Step-by-step explanation:
The underlying basis of the insanity defense is option B) People who have a mental illness cannot ever form the intent needed to commit a crime, so shouldn't be punished.
This defense is rooted in the idea that individuals with a mental illness lack the capacity to understand the consequences of their actions and therefore should not be held fully responsible for their crimes.
For example, if someone suffering from schizophrenia commits a crime during a psychotic episode, they may not have the required intent to be held legally responsible.