In saucepan, combine coconut milk, sugar and vanilla bean, and bring mixture almost to a boil. Remove from stove and allow to steep.
Peel papaya, remove seeds, and cut into thin strips.
In a large skillet, heat olive oil; add chicken and cook until nearly done. Add onion and cook until translucent, about 5 minutes. Add papaya slices, salt and pepper, and cook another 5 minutes.
While chicken is cooking, remove vanilla bean from coconut milk and scrape seeds into liquid. Transfer chicken-papaya mixture to a platter. Add coconut milk to skillet and cook over medium-high heat until milk boils and sauce reduces slightly. Pour over chicken and serve over rice.