The "Insanity" was being thrown originally, because Mind Flay changes to Insanity when you spend shadow orbs. When you spend the shadow orbs, you gain a buff "insanity" but you also cast insanity of mind flay (the icon and spell changes on the bar).
The mind_flay error occurred when I changed insanity to mind_flay in the simc file because I thought it would be the same as a ret pally where templar verdict changes to final verdict with the talent, but when I did that, my priest wouldnt even cast insanity so I changed it back.
The routine works correctly with insanity in the simc, but it spams the HB console with that error message for some reason. But as far as I can tell, there isnt a side effect to the effectiveness of the routine.
References for Insanity: the BUFF and the SPELL
I checked and the insanity spell and buff are available (or should be)
Yes you need to cast insanity explicitly, its the same in simcraft profiles
I will be home to check things out in about 3 hours, maybe you can pm me the Profile you are using so that i can test it on my SP