You could almost hear the sigh of relief coming off the page. Not that the inquisition was painless–the magazine said "truckloads of documents were dispatched to the regulator" to secure the clean bill of health.

That's a fine "g'day" to you, mate!

There was no mention of complaints by risk managers. No suspicious activity reported. No leaks by whistleblowers. Just the shadow of Mr. Spitzer hanging over not only the U.S. insurance industry but now distant Australia as well!

However, as I read on, I realized why the local authorities might have reacted so harshly. The article reported that prior to last year's passage of Australia's Financial Services Reform Act, "brokers were specifically forbidden from receiving contingent commissions."

So that's it! Aussie regulators were concerned they had opened a Pandora's box with the new law, creating incentives for brokers to steer accounts to carriers paying the best volume-based bonus, regardless of the best interest of clients.

So, on second thought, the Aussies did exactly what they had to do. With the use of contingency commissions increasing "substantially," according to the magazine, regulators had to put their brokers on notice that the types of abuse uncovered in the United States would not be tolerated.

Hopefully, it also prompted Australian brokers to reexamine their own compliance procedures and make sure the highest ethical standards were being maintained.

Anyone tempting fate should beware, as Australia's executive director of financial services regulation, Jennifer O'Donnell, warned that the "management of conflicts of interest and disclosure of remuneration by insurance brokers will continue to be the subject of regulatory scrutiny," the magazine reported.

The Australian Securities and Investments Commission sternly added that "in subsequent reviews, ASIC will expect to see robust conflict management arrangements…ASIC expects to see disclosure that is timely, specific, prominent and meaningful."

In response, the article glumly noted that "certainly as a document to reassure consumers it did little to foster trust in brokers, but did much to portray the regulator as the vigilant protector of consumers' interests."

It's unfortunate if the Australian brokerage community took offense at the probes. After all, no one had accused them of doing anything wrong.

Yet, Aussie regulators did what they had to do. Ignoring the red flags raised by the Spitzer probe would have been irresponsible. Had insurance regulators here in the United States been similarly proactive, no one Down Under may have ever heard of Eliot Spitzer.

"Had insurance regulators here in the United States been more proactive, no one Down Under may have ever heard of Eliot Spitzer."