Are you connecting to it from the machine that PostgreSQL is running on? If so, then the first line:
is the culprit. (If you are NOT connecting locally, then you should be prompted for a password.) If you'd rather all users enter a password (local users, too), then change the line I quoted to:
That will enforce password policy on your local users as well.
Oh, and if you're running a relatively recent version of PostgreSQL, you have to restart PostgreSQL to make the changes effective