Is solder mask a valid electrical insulator?
No, I would not rely on solder mask as an insulator. It is very thin and can be nicked easily.
I think the bigger issue is going to be how to properly heat sink the LED without a good thermal connection to the heat slug. High power LEDs usually want the heat slug soldered or thermally epoxied to a heatsink. This can be PCB copper, but since you stated that the pcb copper is connected to the GND net you can't connect to it.