Final answer:
The Insurance Crime Prevention Bureau assists in loss prevention by investigating insurance fraud, which is a method to prevent extreme cases of moral hazard and encourage safer behaviors among insurance policyholders.
Step-by-step explanation:
The Insurance Crime Prevention Bureau provides loss prevention primarily through A. By investigating insurance fraud. Insurance companies utilize this strategy to combat moral hazard and minimize the impact of fraudulent claims, which can significantly contribute to losses. This is a proactive approach to discourage and deal with extreme cases where individuals or businesses may attempt to benefit deceptively from insurance policies.
Furthermore, insurance companies may encourage behaviors that reduce risks, such as installing security and fire sprinkler systems, and may offer incentives in the form of lower insurance rates for properties that maintain a minimum level of security and have their systems inspected regularly. This helps to prevent insurance fraud by promoting safety and due diligence among policyholders.