Most of Midnight Commander's key-bindings are customizable. The feature you're talking about appears to be Mark, which is in the default keymap file, e.g., /etc/mc.keymap:
[panel]
Search = ctrl-s; alt-s
Mark = insert; ctrl-t
According to the manual page, if you provide your own keymap file (and make that the first one found), it will use that file instead of the system's keymap. By assigning Mark to a different key-sequence, you can make mc ignore Insert in the case which causes problems.
You can see the other places where Insert is used in mc keymap files by
dpkg -L mc |xargs grep -i -n insert 2>/dev/null
which shows, for example, that it is used in InsertOverwrite.
Binary file /usr/bin/mc matches
/etc/mc/mc.keymap.emacs:81:Mark = insert; ctrl-t
/etc/mc/mc.keymap.emacs:302:InsertFile = f15
/etc/mc/mc.keymap.emacs:304:InsertOverwrite = insert
/etc/mc/mc.keymap.emacs:322:InsertLiteral = ctrl-q
/etc/mc/mc.keymap.emacs:365:Up = k; y; insert; up; ctrl-p
/etc/mc/mc.keymap:80:Mark = insert; ctrl-t
/etc/mc/mc.keymap:220:Store = ctrl-insert
/etc/mc/mc.keymap:221:Paste = shift-insert
/etc/mc/mc.keymap:302:InsertFile = f15
/etc/mc/mc.keymap:304:InsertOverwrite = insert
/etc/mc/mc.keymap:322:InsertLiteral = ctrl-q
/etc/mc/mc.keymap:362:Up = k; y; insert; up; ctrl-p
/etc/mc/mc.keymap.default:80:Mark = insert; ctrl-t
/etc/mc/mc.keymap.default:220:Store = ctrl-insert
/etc/mc/mc.keymap.default:221:Paste = shift-insert
/etc/mc/mc.keymap.default:302:InsertFile = f15
/etc/mc/mc.keymap.default:304:InsertOverwrite = insert
/etc/mc/mc.keymap.default:322:InsertLiteral = ctrl-q
/etc/mc/mc.keymap.default:362:Up = k; y; insert; up; ctrl-p
/etc/mc/mcedit.menu:450:I Insert `Changelog' string
/etc/mc/mcedit.menu:467:i Insert a out of command to cursor.
Binary file /usr/bin/mcview matches
Binary file /usr/bin/mcdiff matches
Binary file /usr/bin/mcedit matches