He also said RCTV's closure aimed to intimidate media critical of the government.
In a statement, Venezuela's foreign ministry said Insulza was "improperly meddling in a matter that is the strict competency" of Venezuelan authorities and denied its decision had any "appearance of censorship."
Insulza, the statement said, should "retract a series of comments that go against the truth."
The foreign ministry also accused Insulza of being influenced by Venezuelans and foreigns who wish to discredit Chavez's government and said his comments revealed an "unfortunate ignorance of reality" in Venezuela.
Opposition TV station to close
On Friday, Insulza called the decision to not renew RCTV's broadcast licence a "form of censorship against the freedom of expression".
The president of RCTV has said his station would be forced to close if the licence was not renewed.
Chavez has said that his decision is final. He has accused RCTV and other opposition-aligned private media of having backed a brief coup against him in 2002 and of carrying out other subversive activities.
During the short-lived coup, several private channels broadcast regular programs such as cartoons and movies instead of the leader's return to power during giant street protests.