Unless the mounting pad is electrically isolated (as it seems to be on Luxeon stars) or connected directly to the LED cathode (+) terminal (not likely), insulating the LED is essential. If you'll be running the LED at anywhere near its rated current, you should use something that's a very good thermal conductor. Arctic Silver epoxy is the best I've found. Arctic Alumina epoxy is about half as thermally conductive, but adequate. I looked into Kapton tape, but it has only about 1/50 the thermal conductivity of Arctic Silver, so isn't good to use. Whatever you use, you should use the thinnest layer possible that still provides insulation, to minimize the thermal resistance.
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