NEW YORK (Reuters) ? The National Association of Insurance Commissioners, which regulates the US insurance industry, said on Wednesday it took a step toward giving foreign reinsurers more access to American markets.

An NAIC committee adopted a recommendation that would focus supervision more on risk and credit criteria instead of strictly whether an insurer was licensed in the United States, according to an NAIC statement.

Reinsurance is backup coverage, normally for property casualty insurers who face potentially catastrophic losses from hurricanes and earthquakes.

Lloyd?s of London and other reinsurers who do business in the United States, but mostly are not licensed here, have been pushing for action by the NAIC.

Currently they are forced to post 100 percent collateral for all the reinsurance contracts they write. Given their financial strength, they have said this is not necessary and hurts their ability to compete with licensed US insurers.

Many US insurers, led by the American Insurance Association (AIA) in Washington, D.C., have opposed a change in the rules, saying that if Lloyd?s and others want to compete, they should get licenses in this country.

The NAIC committee recommendation, which took place at its winter meeting this week, called for its Reinsurance Evaluation Office to do an assessment by September, 2007 that would measure insurers? financial strength, business operations and claims-paying history in assigning ratings to each reinsurer.

NAIC President Alessandro Iuppa said the current system is ?too simplistic, has arbitrary barriers that impugn valuable consumer protections and ignores differences within and outside the United States.?