“IC” stands for Insulation Contact. IC rating is essentially a measure used to determine if a recessed downlight is suitable to come into contact with your building insulation or not.
Essentially, an IC-rated downlight can be abutted and directly covered with insulation. This makes the installation process far easier as the insulation can be laid unbroken over the whole ceiling area.
On the other hand, a downlight without IC rating cannot come into direct contact, or be covered by insulation. If a downlight without IC rating is to be used, insulation must be cleared around and above the downlight to allow heat to dissipate.
If the space where the downlight is to be placed does not contain any insulation, then a downlight without IC rating is perfectly fine.