HEAT oil in large nonstick skillet on medium heat. Add chicken; cook 5 to 7 min. on each side or until browned on both sides. Remove chicken from skillet; set aside. Drain fat from skillet.
BRING water and bouillon to boil in same skillet on medium-high heat, stirring occasionally. Stir in rice and peppers. Top with the chicken; cover. Reduce heat to medium-low; simmer 20 min. or until chicken is cooked through (180°F).
REMOVE chicken from skillet; cover to keep warm. Add VELVEETA to skillet; cook until melted, stirring occasionally. Return chicken to skillet; cover. Let stand 5 min. before serving.