BILL ANALYSIS: Regulating the Funeral Industry


More often than not, state regulation – especially licensing laws – has little to do with protecting the public and everything to do with insulating currently entrenched businesses from competition.

Consider S.160, legislation that would require the licensure of all third-party funeral service providers. Is anyone harmed by unlicensed funeral services? Almost certainly not, but the funeral industry has an interest in cracking down on its competition in any legal way possible.

The new bill would define third-party providers as anyone who “advertises the practice of funeral services to the public but who contracts with or otherwise engages another licensee to provide, assist, or otherwise participate in the practice of funeral service that he has agreed to perform for a fee.” Like all occupational licensure laws, this new regulation will only serve to drive up prices for consumers and decrease opportunities for would be entrepreneurs. The funeral industry in particular – and this point was made forcefully by Governor Nikki Haley’s Regulatory Review Task Force – is grossly overregulated, to the advantage of existing firms and to the detriment of consumers.

Despite the Task Force’s recommendations, the Board of Funeral Services – the board charged with regulating the funeral industry – has stubbornly resisted any and all reforms. The board is backed up by the powerful chairman of the House Labor, Commerce, and Industry (LCI) Committee – the House committee charged with regulating South Carolina’s economy. The committee’s chairman just happens to be  . . . the director of a funeral home.

As of this writing, S.160 has passed the Senate and awaits debate in the LCI Committee.

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