As the Bank of Japan delves into unconventional policies, it should consider buying bank stocks from life insurers and other large bank stakeholders, the chairman of the Life Insurance Association of Japan said Friday.

"The Bank of Japan has already taken a step into forbidden territory by buying up banks' stockholdings" to stabilize stock prices, said Shinichi Yokoyama, also president of Sumitomo Life Insurance Co. "We sincerely hope the BOJ will also buy up bank stocks; they have even more potential to destabilize the economy."

Bank stocks have continued to dip further than other stocks on the first section of the Tokyo Stock Exchange, hurting life insurers whose stockholdings are heavily weighted in such stocks, Yokoyama said.

Banks have meanwhile invested heavily in life insurers' futures, providing capital in the form of so-called foundation funds.

Until the nation convinces individuals to invest more in the market, steps should be taken to prevent bank stock falls from debilitating corporate books, he said.

BOJ officials retort that buying an individual bank's stocks may be construed as insider trading. The central bank monitors bank operations through off-site inspections.

But life insurers are prepared to look for ways around insider-trading laws. Yokoyama suggested that the BOJ buy packages of bank stocks.

Life insurers have suffered squeezed profits for more than a decade, with low interest rates hurting earnings on their long-term investments, which continue to fall short of payouts promised to policyholders.

Life insurance executives continue to claim they are the victims of the government's efforts to save banks.