Technically there is no such thing as a US International Driver's License. Its a scam and should not be confused with the International Driving Permit you can obtain from driver's associations like AAA. If you have a US State License you can obtain an IDP by simple application and fee, for example:
The IDP is a document translated into 10 langauges and is valid in 150 countries. TECHNICALLY you dont need one to drive in the UK and having an IDP does not negate one's need to get a UK driver's license once one has started to reside in the UK. Its basically just a translation of your US D/L to help you communicate with officials from other countries should you get stopped.
I would interpret the insurance company's reply to mean: she can drive in the UK as long as she has a valid US license (not an IDP or "international license") AND provided she gets her UK license within 12 months, they'll insure her. They'll never know if she surrenders the US license or not. Also, an IDP is not directly exchangeable for a UK license, she'll still have to test.
If she's had her visa for more than 12 months but has not been ORDINARILY RESIDENT in the UK until recently, I would suggest that her 12 month count-down would begin from the moment she became ordinarily resident in the UK (in otherwords, gave up her US domicile for one in the UK). For example, Martin entered the US on Feb 9 2004 on his CR-1 and obtained his green card, however he did not become ordinarily resident in the US until Oct 21 2004. Up until that date we were still residing in the UK. As of Oct 21 04 we no-longer were domiciled in the UK. The term ordinarily resident is what is most important here - the DVLA cannot demand that a visa national obtain a UK license in order to drive in the UK if the visa national has not been resident in the UK.
Hope that helps.