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The pineal gland is a small gland right at the midst of the brain. One of its functions is to secrete a substance called "melatonin". Melatonin is a chemical that aids in achieving sleep and levels of which are correlated with one's ability to induce sleep.
A pineal cyst may hinder the pineal glands ability to produce such a substance and this might cause the insomnia.
Have the patient checked by a neurologist or a sleep therapist to rule out other causes.
Hope this helps. Regards...