This question treats the modifier in the five options.
What is being introduced by Italian merchants? Life Insurance and NOT England. This means that the modifier must be followed by life insurance . From here we can detect the true choice of answer among the five options.

Option A:- Incorrect
This option is incorrect having established above that the modifier must be followed by the object and this option is guilty of that.

Option B:- Incorrect
The option is also faulty, in that Life insurance which is the subject of the next clause does not start with the statement.

Option C:- Incorrect
This option is ambiguous and does not follow parallelism, it is important that the subject of the next clause is also not starting this option.

Option D:- correct
This is very tricky, we have to strike a balance between the similar nature between this option and option E. However, we can simply point it out!.
This option having started with the supposed Subject of the new clause Life insurance the use of Between/ and is noticeable, this option uses the conjunction in a proper way.

Option E:- Incorrect
this option is quite similar to option D above, flex muscle with option D to b e the favourite answer but NO! The use of the conjunction between / with does not follow parallelism and thus will not be considered.