Indeed it is, inside a sensor (that's why so much trouble replacing one on iphone), gladly raw data never leaves it (same goes for Android as well, except really really old versions, like 4-)
Find the section titled "Secure Enclave." When the SE needs to store data on the filesystem, it's encrypted with a key that never leaves the SE. Effectively, assuming the encryption is implemented correctly, data 'owned' by the SE is never available to any other part of the system.
You're looking for the bit on the "Secure Enclave".