C-H panel and you could AFCI any circuit you want - 3-wire circuits too.
But no, IMO you shouldn't be required to do so for a panel change, or any other repair work.
I'll also step out to say that third party 'Home Inpectors' for Real Estate sales are the biggest ruse short of Real Estate Agents themselves. There should be laws against these people, or laws to hold them to a much higher set of standards. They often do more harm than good by misinforming people about what is on thier little check-lists, and often miss, or have no idea about what is not on the check-list. After all, there are laws in just about every state concerning incompetant or unscupulous contractors. I think they often cause either false senses of security, or unnessesary law suits or repairs - all for a rubber stamp.
