Final answer:
The false statement about the Insurance Frauds Prevention Act is that it C) requires mandatory insurance coverage. The Act primarily focuses on preventing fraud through penalties, reducing claims, and giving investigative powers, not on mandating coverage.
Step-by-step explanation:
The statement about the Insurance Frauds Prevention Act that is false is C) Requires mandatory insurance coverage. The objective of the Insurance Frauds Prevention Act generally includes providing penalties for insurance fraud (A), aiming to reduce fraudulent claims (B), and establishing investigative powers to monitor and investigate suspicious activities (D).
The act does not mandate insurance coverage; instead, it focuses on measures to prevent and deter insurance fraud to mitigate cases of moral hazard. Insurance companies may also incentivize behaviors that reduce risk, such as offering lower rates to businesses that install and maintain top-level security and fire sprinkler systems.