Is it permissible to supplicate for the administration to forget or overlook the forbidden insurance policy, or is that considered extremism, and one must adhere to the concession, knowing that the insurance is compulsory?

There is no harm in compulsory insurance to obtain housing. As for the supplication mentioned, there is no harm in it, for Allah is capable of all things, and the occurrence of what is supplicated for is not impossible. However, it is more appropriate to supplicate with comprehensive supplications that include the mentioned situation and others, such as asking Allah for well-being in religion and in this world, following the Sunnah (definition).