American Equity Investment Life Holding Co. experienced a 38 percent increase in its operating income during the first quarter as annuity sales soared and the company introduced a new fixed-index annuity product.

Operating income for the quarter was $23.3 million, or 42 cents per share, compared with $16.9 million, or 29 cents per share, in the first quarter of 2008.

Annuity sales rose 27 percent to $652.8 million, with a new fixed-index annuity product representing more than 50 percent of the company’s new annuity sales.

The West Des Moines-based company also said that demand for fixed-index and fixed-rate annuities have risen as the global financial crisis and low interest rates make these investments more appealing. Pending applications for new products rose nearly threefold in the quarter and the trend appears to be continuing in the second quarter, the company said in a release. American Equity also is exploring ways to increase sales capacity, including a program that would restructure sales agent commission payments.

“We expect 2009 to be a year of remarkable growth in our industry,” Chairman David Noble said in a release. “Our history of careful attention to asset quality and capital adequacy provides us with an ideal foundation for this opportunity. We will be relentless in our efforts to maintain financial strength and capital adequacy as needed to support our growth.”

Net income for the first quarter was $26.5 million, or 48 cents per share, compared with an adjusted net income of $48.1 million, or 83 cents per share, a year ago, which the company attributes to the adoption of new accounting standards in the first quarter of 2008. The company was affected by invested assets in certain preferred securities, but said it is well-positioned to hold on to the securities until valuations recover.

American Equity also announced that it has been notified of a potential civil action by the Enforcement Division of the Securities and Exchange Commission (SEC) related to the company’s disclosures in its 2004, 2005 and 2006 proxy statements concerning the effects of transactions involving American Equity Investment Service Co. The company disagrees with the conclusions drawn by the SEC staff and is working to resolve the matter before it faces civil action.