No, alcohol does NOT help your body produce insulin. Not for Type 1’s OR 2’s. What it does is impair your liver’s ability to produce glucose, because the liver preferentially processes alcohol before gluconeogenesis.
In the normal state, when you’re not eating, and have digested all your previous meal, the liver is constantly producing small amounts of glucose – enough to keep your BGs level, as long as there is enough insulin on board. When alcohol prevents that, all of a sudden, the insulin you have in your bloodstream has no extra glucose to work on, so it just continues to lower what was a normal BG and you go low.
The worst part of that is that you may smell like booze, and people may think you are just drunk when you are actually low. The symptoms can be the same, and diabetics have died in the drunk tank when police didn’t know or think to have them checked for low BG.
So the answer is to ALWAYS have something to eat when you drink. Even drinks with CALORIES may not have much in the way of carbs, because the calories may be coming from alcohol, which has 7g per oz. (?) The Japanese have the lovely custom of always serving snacks with drinks – we should do the same!