Brown and Co must provide a receipt to John when accepting from him a payment of which type?

• A. Signed payroll deduction mandate for a PRSA John is effecting at work.
• B. Signed direct debit mandate for a personal pension plan John is effecting.
• C. Cheque made payable to Brown and Co in respect of the renewal premium payable on a term assurance policy.
• D. Completed application form for a Buy-out Bond in relation to the transfer of an existing pension fund with Brown and Co.

Answer: (C)

When a firm actually takes in money from a client in connection with a policy, it should issue a receipt to acknowledge that payment. The only scenario here where Brown and Co would be the recipient of funds at the time of payment is a cheque made payable to Brown and Co for the renewal premium due on a term assurance policy. In payroll deduction arrangements, the payment comes from the client’s salary via the employer, not directly to Brown and Co, so a receipt from the firm isn’t issued for that collect-at-source arrangement. A direct debit is similarly processed through the payer’s bank or insurer, not as a payment received by Brown and Co. And a Buy-out Bond application relates to a transfer or product setup that does not involve an immediate payment to the firm. So the cheque payment is the one that requires a receipt.