Heat olive oil in a Dutch oven over medium-high heat. Season chicken with salt and pepper and add to the hot pot to brown, 6 to 7 minutes per side. Transfer chicken to a bowl and cover with an aluminum foil tent.

Reduce heat to medium; add onion to the pot and sauté until translucent, about 5 minutes. Add garlic and cook for 1 minute. Stir in sofrito and cook for 2 to 3 minutes. Add potatoes, chicken broth, tomato sauce, sazón, cumin, and bay leaf; bring to a boil.

Return chicken to the pot. Cover and cook for 1 hour. Remove chicken.

Mix water and cornstarch together in a small bowl; stir into simmering mixture until nicely thickened. Place chicken back into the pot and cook together for about 10 minutes more.