APA cancelled, illegal sublet, insurance invalid – what now?

I got a notification from DWP that they have stopped direct payment of rent because my tenant has informed them that I am no longer her landlord.

I queried it because I was in contact with the tenant, who was (and still is) insistent she has not left and that someone has compromised her DWP journal logon. She said she could not get into the account and so cancelled it and started another claim.

I contacted DWP again who said no, she's confirmed that day that she left and uploaded a new tenancy agreement for her new landlord which started the month before, so they have cancelled payments to me as from that date, a month ago.

I asked a friend to look to see if she was still there as she claimed she was and her supposedly ex boyfriend was seen there, not her. Since this boyfriend broke into the place couple of months ago I reported this to the police, because he has no right to be there.

The police have visited to find someone there who says he has rented the house as of last week from this boyfriend and the landlady is aware of it (not sure if this was the tenant acting as landlady or pretending to be me - I'm awaiting further info). The police have informed this occupant that the house has been illegally sublet and he has asked for my details so he can contact me re arranging a proper tenancy.

The police don't know yet who has signed the tenancy agreement or who exactly is receiving the rent so I'm not sure yet if it's a civil or criminal matter.

The tenant hasn't surrendered the tenancy to me so I'm unsure if I can just issue a new rental agreement (assuming the tenant is even acceptable to me) and the old tenancy will end by operation of law. Is her notification to DWP implied surrender? Can I contract with the new occupier if they turn out to be acceptable?

My most recent problem is I have notified my insurer and apparently my landlord's policy will probably be cancelled because they do not allow sublets. I've said well neither do I and it's expressly forbidden in my tenancy agreement so how can a provider of a landlord's policy just cancel cover when something like this happens through no fault of my own? Can they do that and if so what do I do next, since the building will be uninsured?

Lastly, the tenancy started in January this year and I've had no EIRC done yet - I've been trying to arrange it with the tenant but was fairly relaxed since I have until April next year. However, now a new tenant is in there, which is not allowed after July this year without a valid EIRC. I didn't put the tenant in though so will my tenant be liable for any fines or prosecution related to that? I'm guessing if I do take the new occupier on as a tenant I'll have to have the EIRC done first, before arranging all the usual docs for the tenancy to be legal. Meanwhile I'm uninsured.

Help? Trying not to panic (or rather to stop panicking!) but it's hard.