Inflated insurance ...

I'm not clear on what type of insurance you're referring to.
It makes sense that a driver inexperienced on Maltese roads might pay a little bit more in his first year, as the risk is a little higher.
It also makes sense that a resident who does not have access to the Maltese national insurance scheme, and who is therefore likely to rely heavily on the private health system, may face a higher premium, again because the financial risk for the insurer is higher.
Both such considerations are simple actuarial calculations based on the cost to the insurer and the degree of risk they would need to carry - so they would be specific to each individual. 
Motor insurannce, for example, might be quite low if you have proof of a long accident-free period in another country. Health insuramce could be low if based on a full knowledge of your prior medical conditions and a clean bill of health.
I haven't experienced outright prejudice in insurance quoting - but I have witnessed a wide variation in the prices quoted by different insurers, so I'd take the standard precaution of getting three quotes for anything before you make a commitment.
Hope that helps.

Yeah, it was car insurance - it was very suspicious, since the quote for me included 5 years no claims, but my wife had zero years, and her quote was much less .... and when we raised this, they awkwardly agreed to give me the same price, like they knew they were bending the rules.

I believe the same thing happened in the UK a few years back, EU drivers were being charged more by Admiral, and there was a massive outcry, and after the bad PR, they changed, and were in line with the other UK insurers.

Personally, I think I should get a massive discount for bringing up the average standard of driving on the roads ;-)

Keep shopping around. I had my insurances with Fogg and then switched to Mapfre Middlesea who were quoting a discount of 40% on my premiums.
Malta isn't that sophisticated or competitive in the areas of insurance, so you need to put in the legwork to find the best offer for you.