Sumitomo Life Insurance 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-four life insurers, 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.

But if the insurer declares to an accountant that it will hold a bond until maturity unless it rebounds to its purchase price, it doesn¡¯t have to record losses on the debt, according to those guidelines.

Japanese life insurers have seen unrealized losses swell as longer bonds have been hit hard by a shift to interest-rate hikes by the central bank and concern that politicians may increase fiscal spending to please voters. The nation¡¯s 30-year government bonds, one of insurers¡¯ primary investment targets, have seen their yields break above 3% to the highest since the securities were introduced in 1999.

Unrealized losses on domestic bonds held by Japan¡¯s four biggest life insurers ballooned to over ?9.83 trillion ($67 billion) as of the end of June, according to data from the insurers. Sumitomo Life held unrealized losses of ?1.71 trillion on domestic bonds.

Sumitomo Life judged that holding bonds until maturity to earn interest and recover the principal makes more economic sense than selling them at a loss, said the person, who asked not to be identified discussing private matters.

The life insurer declined to comment on specific accounting steps, but said by email there aren¡¯t any problems with its financial soundness. The company added it has conducted stress tests to prepare for significant interest-rate hikes and is making all efforts to manage risks.