A question we get asked quite often is 'can I lay insulation directly on top of a downlight'? Downlights are often installed in ceilings directly below loft space and consequently there is usually attic insulation directly above them. The temptation is there to simply lay the insulation over the units however this should never really be attempted. The heat generated by downlights (including fire rated) can be tremendous and with glass fronts on them they tend to vent their heat backwards. This can obviously create quite a dangerous situation when exposed to flammable insulation material. We've had people say 'but they're LED versions which are ultra cool' but the truth is that LED bulbs give off plenty of heat it is just all dissipated out of the back (it is why the backs of LED bulbs tend to be weird shapes to allow the heat to flow away) Some LED bulbs give off more heat from behind the unit than actual halogens! CFLs radiate some heat too.
We have found the best thing to do is to either cut a portion out of the insulation to allow the downlight to sit in or to use straps between ceiling joists to support the insulation above the downlights so it is not resting upon them.