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Pol ..."Requiring that no ammo be sold to anyone without the insurance would effectively render the millions of illegal weapons now on the streets useless"...
You are joking, right?
Like making illegal drugs illegal keeps the illegal drugs off the streets? Or requiring all drivers to have auto insurance keeps every vehicle insured? Unfortunately there are lots of illegal drugs just like there are lots of uninsured drivers.
Banning the ammo would just raise the price and make smuggling it in more profitable. The drug smugglers already in business would just expand the business model and hire more smugglers and make more money.
People who have illegal weapons do not care how legal or illegal their ammo is, just like users of illegal drugs don't care.
Illegal drug users still get their drugs like the illegal ammo consumers would still get their illegal ammo. The price would be higher, and the supply would be constrained, but they'd still get the ammo.
Having the ammo coded is an interesting idea that I have heard before and I think it may work. Bullets would be easy, shotgun pellets maybe not so much. It could probably be done.