Sumitomo Life Takes Unusual Step to Avoid Marking JGB Losses (2)

Sumitomo Life Insurance Co. is taking an unusual step to avoid writing down losses on its debt assets, promising to never sell them while they are in the red, according to a person familiar with the matter.

The Osaka-based firm, one of Japan’s top-4 life insurers with ¥36.7 trillion ($248 billion) in total assets, is taking advantage of guidelines for bond investors when prices move sharply.

Usually when a bond tumbles 50% or more from its purchase price, the insurer needs to write off the losses, according to Japanese accounting standards. But if it promises to hold the note ...