I am about to have power connected to a house but have noticed the jacket on the service entrance cable is starting to fray. I was looking at the possibility of installing a disconnect switch below the meter and running new wire from the disconnect switch to the main panel.

Can I install a non fused disconnect switch and keep the current configuration of having a main breaker panel that is grounded or do I need to install a 200 amp fused disconnect switch which is grounded and replace the existing panel with a sub panel four wire type?

Thank you for your time.