Is latuda (lurasidone) ever used for severe insomnia?

Not usually. Latuda (lurasidone) is a second generation antipsychotic medicine -- used for psychotic symptoms like hallucinations and delusions. Also Latuda (lurasidone) has indications for bipolar depression. It's not as sedating as some other medications in its class. So unless the severe insomnia is related to bipolar disorder or other psychosis (which it could be) Latuda (lurasidone) would not be most doctors' medication choice.
Off label. If it is used for severe insomnia, it is as an off label use.