Oxysterol-binding protein that mediates feedback control of cholesterol synthesis by controlling both endoplasmic reticulum to Golgi transport of scap and degradation of hmgcr. Acts as a negative regulator of cholesterol biosynthesis by mediating the retention of the SCAP-SREBP complex in the endoplasmic reticulum, thereby blocking the processing of sterol regulatory element-binding proteins (SREBPs). Binds oxysterol, including 22-hydroxycholesterol, 24-hydroxycholesterol, 25-hydroxycholesterol and 27-hydroxycholesterol, regulating interaction with scap and retention of the SCAP-SREBP complex in the endoplasmic reticulum. In presence of oxysterol, interacts with scap, retaining the SCAP-SREBP complex in the endoplasmic reticulum, thereby preventing scap from escorting SREBPs to the Golgi. Sterol deprivation reduce oxysterol-binding, disrupting the interaction between insig2 and scap, thereby promoting Golgi transport of the SCAP-SREBP complex, followed by processing and nuclear translocation of SREBPs. Also regulates cholesterol synthesis by regulating degradation of hmgcr. Interacts with scap; interaction is direct and only takes place in the presence of sterols; it prevents interaction between scap and the coat protein complex II (COPII). Associates with the SCAP-SREBP complex; association is mediated via its interaction with scap and only takes place in the presence of sterols. Binds oxysterols in a pocket within their transmembrane domains and interacts with scap via transmembrane domains 3 and 4. The KxHxx motif mediates association with the coatomer complex. Belongs to the INSIG family.