Derater: In NJ, this may be classified as a 'repair' and not require a permit or insp. NJ does not require AFCI protection, as it was amended in the UCC. Probably a local/area clarification. Where are you?? John
I'm in Cent Pa. A 'home inspector' is contending that changing out the panel requires installing AFCI's. I've never heard of such a thing.
The 2005 code requires AFCI protection of the branch circuit supplying all 120 volt 15 and 20 amp outlets INSTALLED in bedrooms of dwellings. A simple panel replacement usually does not involve any installation of new 120 volt outlets in bedrooms of dwellings, so therefore a careful read of the code section requiring afci protection will highlight the fact that "home inspectors" are generally as far off as my spelling seems to always be.
I assume it is universal but any permit pulled in Lee County Florida will go through plan review. It may just be a rubber stamp but it can also be kicked back if it does not include the things they require. That is where the decision would be made if a panel upgrade triggers AFCI installation. Of course if this gets done without a permit I am not sure who would be there to tell you AFCIs would be required. It is certainly not going to be a home inspector. They are not legally able to cite code unless they are licensed CODE inspectors. Florida does not even recognize "home inspector" as a regulated industry and their "inspectors" are just informal advisors with an occupational license. A home inspector can advise a client of anything they want, down to their favorite color for the toilet but it has no force of law.