What more can I do ?
You can give us some more background info.
I duly filed in the named driver details and returned it
the driver completed the form in front of me (I made sure)
Which one is it? Who posted it? Did they get proof of postage?
Did you have the opportunity to submit the driver details online?
What address are the police writing to that is getting returned to them? Have they stated what they have on record? You said that the nominated driver replied to their own notice, however that seems to contradict what the Police are saying. Did they contact you again to say they had issues with the supplied postal address and ask you to resubmit details?
When you watched the driver complete the form, did they put their correct address in? What relationship are they to you? Were they insured on the vehicle?
Normally, the nominated driver would be the one facing a charge of failure to supply but in this case, if the police have checked the address and found it does not exist it would suggest they think there are shenanigans afoot. Would which beg the question, if the address doesn't exist, how did the nominated driver receive a notice to reply to?