Yowch!!! Yes, definitely. Get it fixed!
Although it probably won't damage the CPU, it will probably cause the CPU to lower its clock speed to try and cool down, therefore making your computer slower!
I just ran a test on my SR MPB, and the CPU temp went up into the 90's(C) after a few minutes, however the fans didnt ramp up until the CPU temp reached 93 degrees C. If the fans aren't coming on until the CPU is that hot, then it seems obvious that the CPU is perfectly capable of dealing with those kind of temperatures, right?