Sumitomo Life Takes Unusual Step to Avoid Marking Bond Losses

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 insurer is taking advantage of guidelines for bond investors when prices move sharply. When there’s a 50%-or-more tumble in the market value of a bond from its acquisition price with no prospect of recovery, the drop in the debt’s value must be booked as a loss, according to Japanese accounting standards.