There are two ways to resolve this issue.
Open the Geometry in SpaceClaim, go to the Workbench tab and click the Share button. That will enable Shared Topology, later causing the mesh on the coil and the insulation to share nodes on the interface, which will ensure that the temperature can flow to the insulation.
In Mechanical, add a Bonded Contact between the adjacent faces of the coil and the insulation.
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