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Implied authority in the context of insurance agents refers to the authority that is not explicitly granted but is necessary for the agent to perform their duties effectively. This authority is inferred from the actions and conduct of the agent, and it enables them to engage in activities that are customary for insurance agents in their role, even if those actions are not specifically outlined in their contract with the insurer.

For example, if an agent is often seen negotiating terms with clients or handling paperwork related to policy applications, it is understood that they have the implied authority to perform these actions as part of their standard responsibilities. This authority helps facilitate smooth operations within the insurance process, allowing agents to interact with clients and underwriters without having to seek specific permission for every single action they take.

The other options refer to different types of authority. Authority defined by state law pertains to regulatory aspects and constraints that govern agent activities, while authority explicitly granted by the insurer is detailed in the agent’s contract or agreement with the insurer. Lastly, authority that only applies to claims handling would be a specific subset rather than a broader interpretation of the agent's overall responsibilities. Thus, the correct answer captures the essence of how agents operate under expectations based on their role rather than formal permissions alone.