You can check with your local building department for what they deem acceptable in your location (-27F and it's heading into spring....ewww
) in regards to acceptable insulation and clearances they require. A double layer of 5/8" drywall might be one solution.A few insulation's are fireproof like "Rock wool".
There are flue insulation liners available, but again asking your local building department would be prudent.

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