Many people think selling the policy is the only licensed act. California draws the line much wider: from the first pitch to the after-sale phone call, it is all transacting.
Under Ins. Code §35, transact includes:
negotiations preliminary to execution of the contract
execution of the contract
transaction of matters after execution that arise out of the contract
Because of that last item, servicing an existing policy, such as phoning auto policyholders to work out changes, is transacting insurance. Section 1631 bars doing any of this without a license, and working for a licensed agency does not lend its license to unlicensed staff.
The license requirement matters because it keeps people who have not shown basic knowledge and fitness from handling the public's insurance. The penalty under §1633: transacting without a license is a misdemeanor, punishable by a fine of up to $50,000, up to one year in county jail, or both.