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Spanish-Style Chicken with Saffron Rice (Arroz con Pollo)

['1 (3 1/2- to 4-lb) chicken, cut into 8 serving pieces', '1 tablespoon olive oil', '1 large onion, chopped', '1 large red bell pepper, cut into 1/2-inch pieces', '4 garlic cloves, minced', '2 teaspoons paprika', '2 cups long-grain white rice', '1 1/4 cups dry white wine', '1 (14-oz) can diced tomatoes including juice', '1 3/4 cups chicken broth', '3/4 teaspoon crumbled saffron threads', '1 bay leaf (not California)', '1 cup frozen peas (not thawed)', '1/2 cup pimiento-stuffed green olives, coarsely chopped', 'Garnish: chopped fresh flat-leaf parsley']

Pat chicken dry and season with salt and pepper. Heat oil in a 12-inch heavy skillet (at least 2 inches deep) over moderately high heat until hot but not smoking, then brown chicken on all sides, about 12 minutes total. Transfer chicken with tongs to a plate.
Pour off all but 2 tablespoons fat from skillet and add onion, bell pepper, and salt to taste. Cook over moderate heat, stirring, until softened, about 7 minutes. Add garlic, paprika, and rice, then cook, stirring, 1 minute. Add wine and boil, uncovered, 2 minutes. Stir in tomatoes with juice, chicken broth, saffron, and bay leaf. Nestle chicken in rice, adding any juices from plate.
Cook, covered, over low heat until chicken is cooked through, rice is tender, and most of liquid is absorbed, about 15 minutes. Remove from heat and stir in peas, olives, and salt and pepper to taste. Cover skillet and let stand 10 minutes. Discard bay leaf.

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