My home was struck by ligtning and caught fire via the satcable going into the home; the vapour barrier became ablaze and started the home on fire;the fire company arrived and put the fire out. the structure that contained the wall insulation of now charred 2x4's was painted and vapour barriered by insurance. Is this legal as in my eyes I see this as crazy?
You would need to have an independent inspector (someone who does not do fire renovation) come out and look at it. If the wood is solid, then the insurance company did indeed go above and beyond by painting it with the "paint" product to seal in the smoke smell and the potential carcinogens. Really, if there was no true structural damage, wood didn't need to be replaced.
Disclaimer: I'm just some guy on the internet. Consult a qualified professional or your lawyer. I am neither.
It's really difficult for an outsider on the internet to answer this - we have no idea about the extent of the damage. The legality of it can only be properly answered by a lawyer working in your jurisdiction, which I am not.
From an insurance companies point of view, obviously they are not in the business of writing huge checks for no reason so they will try to minimize how much they pay out. That being said, if they fixed this incorrectly and the wall then failed causing even more damage, they would be on the hook to pay for the repair again, as well as the incidentals (hotel, etc.). Considering this, their likely route is to spend as little as possible to fix it in a manner that minimizes long-term costs to them. Lucky for you, this likely means they will do it safely.
If you have any doubts you should seek the opinion of an structural engineer and/or building inspector. If they come back and say its unsafe or illegal, at least you will have proper documentation to fight the insurance company with.