Long known to have thermodynamic properties at odds with its insulating electrical transport, SmB6 has been the subject of great debate as it is unclear whether its unusual properties are related to the bulk or novel metallic surface states. We have observed a bulk moment-screening effect in nominally pure and Gd-doped SmB6 via heat capacity, magnetization, and resistivity measurements, and show this new Kondo-impurity like effect provides an unexpected but intuitive explanation for metal-like phenomena stemming from the strongly interacting host system. This affords a coherent understanding for decades of mysteries in strongly-correlated insulators, reveals the expanded utility of techniques previously only utilized for metals, and presents the novel effect of even highly-dilute impurities in strongly correlated insulators.