It does indeed have to be upgraded - If it's something that has to be re-inspected, as that electrical work does, it would then need to pass current day code to be inspected and tagged.
So
1) yes, a repair that requires a reinspection does have to comply with current code
2) I am no electrician, but 200A seems excessive - I'd get another electrician in, for a second quote and 2nd opinion.
Some folks would just have a guy replace the 60A with another 60A and call it done, and not get it inspected...Depends on the person.
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