Hi debs
You'll doing well on the weight front well done..
As to your question, in theory excess weight can increase insulin residence so reduce weight should reduce residence... But sometimes even with weight lose T2's may require verious amounts and types of oral medication to maintain there blood glucose levels which nothing to feel ashamed about what so ever, if you need it then you need it... And I think I can safely say most don't like the idea of having to take tablets, but when needs must and all that..
As to the insulin side...
I can appreciate the dislike of going down the insulin route, brings in several other factors into the control equation such as avoiding hypo's etc.. But if you have to travel this route it isn't as bad as it sounds (mainly just a pain in the butt) the advantage you will have if they started you on this regime, is being a T2 it may only need to be an intrim control method, one that enables you to lower you BG to safer level and maintain control, while you are in the process of losing your weight to a level where oral medication can then be reintroduced or relied on to maintain control..
But the main thing is that you've done well on the weight lose, hopefully you've seen some improvement on your BG's, even a little is a good thing, don't forget little steps makes big strides