Sorry, I'm just catching up with this thread and would mention that breeders in France do not offer insurance with the puppies and in any event the insurance would be worthless for ED or HD as they are specific exclusions together with any health issue which has a genetic link.
In the bit of Australia I live in (the ACT) a legislative approach is being taken to controlling breeding. In order to advertise a puppy you need a breeders' license number, which has to be displayed in the ad. To get a breeders' license number you have to apply and your premises are inspected. The following are taken into account when determining whether or not to issue a license: (this is from the Domestic Animals (Breeding) Amendment Bill 2015: (3) In making a decision under this section, the registrar must consider the following: (a) the number and kind of animals kept by the applicant at the premises to which the application relates; (b) the size and nature of the premises to which the application relates; (c) the suitability of facilities on the premises for keeping and breeding dogs or cats; (d) the potential impact on the occupiers of neighbouring premises; (e) whether the applicant is a member of a recognised breeding organisation; (f) any conviction or finding of guilt of the applicant within the last 10 years against a law of a State or Territory for an offence relating to the welfare, keeping or control of an animal. Before all that you also need a license to keep an entire animal. To get that license you need to also show that the animal is to be kept for breeding or showing and that you're a member of a recognised breed club. Incidentally, that makes it impossible for me to keep an entire dog (which I don't want to so that's lucky). All that is fairly new legislation, so we'll see how it goes (e.g. do puppy ads all start to comply with the requirement to show a valid breeder license number....). I do agree though, as per JulieT's suggestions, that real power also lies in making breeding too costly for dodgy breeders and making well bred pups hugely more attractive to buyers. All that still requires quite a bit of regulatory and compliance infrastructure, but to have a dent in the problem I think it's the way.
And further to that the ACT Animal Welfare Act 1992 has recently been amended to allow the government to establish codes of practice about the breeding and selling of dogs and cats with heritable defects, so we will see where that goes.
It seems that the only controls here in France, as far as Labradors are concerned, are that the parents must have hip and elbow x-rays together with the eye exam result and the results have to go to the SCC (the equivalent of the KC). If there are no x-rays etc. any puppies from a mating can not be registered as pedigree and of course their future offspring can not be registered either. The price differential between LOF (registered pups) and Non-LOF is quite significant (around 400 euros for a Labrador puppy) and therefore people are willing to buy a pup where there are no tests on the parents.
As an aside the thorough Germanic approach does not surprise me! When I lived in Germany at the end of the 70's the Germans had a rule for everything; the number of liters and type of rubbish individual householders were allowed to put out each week in Council approved containers irritated the average Brit! The Germans even set aside a day where furniture would be collected free of charge because it could be recycled. No self respecting German would ever dream of crossing the road when the traffic lights were red but a Brit would happily flaunt the law and take his chances. Germany seemed to have a law for almost everything and at the time I thought that this was unnecessary, but now 40 years later I realize that the Germans were right and one of the reasons why they recovered so quickly after the war to become one of the most prosperous nations in Europe?