As I understand it, insurers follow the guidance issued by the FCDO which might differ from the traffic-lights system.
The FCDO site currently states,
"Summary
Still current at:
4 June 2021
Updated:
4 June 2021
Latest update:
Update to information under ‘Requirements for UK nationals resident in Spain’ (‘Entry requirements’ page). No changes have been made to the level of FCDO travel advice for any regions of Spain. We continue to advise against all but essential travel to Spain, including the Balearic Islands, ***but excluding the Canary Islands***
The FCDO advises against all but essential travel to Spain, including the Balearic Islands ***but excluding the Canary Islands,*** based on the current assessment of COVID-19 risks."
The Amber list, last updated yesterday, currently shows for Spain,
"Spain (including the Balearics and Canary Islands)"
So then, conflicting advice...