The Insane Challenge is designed to be the most difficult single-player level.
This challenge is a 1v5 and takes place on the Double Earth map. The starting locations are fixed, so unlike some of the other levels, you cannot re-start the game to find an ideal location.
Players are given an abandon card every 7 turns assuming they capture a territory each turn. The abandon card is configured to significantly higher settings than would usually be found in multi-player (500% versus 200%). The AI opponents do not use the abandon card.
The level is indeed quite difficult - new players should not be discouraged if they have trouble completing it.
Gold stars are awarded to players who complete the level in 28 or fewer turns (35 in the standalone client). As this is the most difficult WarLight level, it's also by far the most difficult gold star to earn.
 Previous name
The Insane Challenge used to be called Challenge 2. Prior to the name change, the WarLight creator received almost daily e-mails of people complaining that they found the level too difficult. The name was changed to help convey that the level is supposed to be extremely difficult. The name change was successful in that regard, as it immediately reduced the e-mail traffic to a manageable level.